Financial Crime World

Europol Defines Economic Crime: A Growing Threat to European Economies

Economic crime, also known as financial crime, is a growing concern for European authorities. Europol, the European Union’s law enforcement agency, sheds light on the definition and serious implications of economic crime in Europe.

Definition and Types of Economic Crime

Economic crime encompasses various fraudulent activities related to money, securities, or other assets. These crimes are often committed using sophisticated methods, including:

  • Forgery
  • Cybercrime
  • Money laundering

The harm caused by economic crime extends far beyond monetary losses, affecting the trust and stability of financial institutions, businesses, and economies.

Europol’s Role in Combating Economic Crime

Europol’s European Financial and Economic Crime Centre (EFECC) is dedicated to tackling economic crime through international cooperation and intelligence exchange. EFECC focuses on specific economic crime areas:

  1. MTIC (Missing Trader Intra-Community) fraud
  2. Excise fraud
  3. Money laundering

MTIC (Missing Trader Intra-Community) Fraud

MTIC fraud, also known as carousel fraud, involves companies in Europe importing goods without paying the correct VAT, then selling those goods to other companies with falsified VAT invoices. The VAT is then claimed back from EU member states, resulting in significant financial losses. Europol estimates that MTIC fraud cost EU member states around €12 billion in 2015 alone.

Excise Fraud

Excise fraud refers to the falsification, evasion, or avoidance of taxes related to excisable goods, such as alcohol and tobacco. These crimes often involve cross-border activities to exploit different tax systems in various EU countries.

Money Laundering

Money laundering, which is the process of making illegally-gained proceeds appear legitimate, poses a significant threat to European economies. According to Europol, between 2% and 5% of Europe’s GDP is laundered each year.

Europol’s Strategies to Combat Economic Crime

As economic crime continues to evolve and become more complex, Europol and its partners remain dedicated to combating these threats through strengthened cooperation and innovative approaches. In the coming weeks, Europol will be releasing more information on its latest strategies to tackle economic crime and protect European economies. Stay tuned for updates.