17 Sep 2015
Europol has released a new report entitled: “Why is cash still king? – A strategic report on the use of cash by criminal groups as a facilitator for money laundering”.
The report notes that in the EU, “the use of cash is the main reason triggering suspicious transaction reports within the financial system, accounting for more than 30% of all reports” and that “reports on detections of suspicious physical cash movements represent around one third of all contributions to Europol in the area of money laundering”.
Significantly, although the use of cash for payments has apparently “experienced a moderate decline in the EU”, the demand for “high denomination notes not commonly used for payments, such as the EUR 500 note, has been sustained”. Indeed, the EUR 500 note alone is said to account for “over 30% of the value of all banknotes in circulation”. Unsurprisingly, the Europol report notes that this “raises questions about the purpose for which they are being used and whether this could be linked to criminal activity”.
In the press-release that accompanied the publication of the report, Rob Wainwright, the Director of Europol, is quoted as saying:
“The use of cash by criminals remains one of the most significant barriers to successful investigations and prosecution. It is a threat that has not received sufficient international attention or legislative solutions. A fragmented enforcement approach at national and international level, and the differing regulatory frameworks across the EU Member States, are widely exploited by criminals, who adapt their methods and routes to take advantage of these loopholes. Stepping up efforts to increase international cooperation and information exchange, and establishing a more harmonised approach among EU Member States concerning cash movements within the EU, are crucial if we are to tackle these criminal activities.”
Records received by Europol are said to show that EUR 1.5 billion in cash is detected and/or seized by EU Member State authorities each year. The physical smuggling of cash clearly remains a significant problem.
As well as analysing the problem, the Europol report also details a “set of recommendations aimed at providing practical solutions which could assist in preventing the use of cash for criminal purposes as well as enabling investigators to achieve higher rates of successful convictions”.
A copy of the report can be found here – it is essential reading for all AML professionals.
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