Organised Crime in the European Union

Despite its relative safety in comparison to other global regions, the European Union is struggling to get a grip on its organised crime problem. The proceeds of all organised crime groups in the EU make up at the very least 110 billion Euro, which corresponds to one per cent of EU GDP. Aside from the income that is lost to member states, organised crime groups bring along the drug trade, human trafficking, and many more activities that are a menace to the general public. This article presents fundamental facts surrounding organised crime in the EU, based on a study supported by the European Commission, which focuses on a selection of seven member states.

The study, which has been conducted at the Università degli Studi di Trento in Italy, primarily looks at data of seven EU members, namely Finland, France, Ireland, Italy, the Netherlands, Spain, and the United Kingdom. The scope of the study is limited to these member states since data collection in the different relevant fields varies strongly between countries in quality as well as quantity. Nevertheless, even with a limited scope, the study allows cautious conclusions of the underlying organised crime structures within the European Union, as well as in its neighbour countries.

Although certain hotspots can be identified, organised crime is a problem that affects all member states. What is striking is that organised crime groups originate from both within the EU as well as from outside of it. Among the most strongly represented countries of origin of organised crime groups are China, Russia and Georgia, Italy, the United Kingdom, the Netherlands, and Turkey. It is notable that in a number of member states outlaw motorcycle gangs are also very prominent.

In regards to geographical organised crime group distribution, two points can be made. Considering their net proceeds, organised crime groups are most powerful in the west and north of Europe, but as a percentage of GDP, organised crime is most prevalent in the south and east. In a regional comparison, organised crime has the highest presence where they have been historically embedded, and also near borders, in large urban area, and tourist and coastal areas.

The study contains important information on the proceeds of organised crime groups, estimating that they make up a sum equivalent to at least one per cent of EU GDP. These numbers are in all likelihood grossly underestimated, since the lack of data only allows for the estimation of organised crime proceeds from those member states, which have available data on the matter. All countries from which such data could not be collected are not showing up in the final numbers. A more detailed breakdown of organised crime incomes in all markets and areas of the EU is necessary to better understand its exact dimensions and composition.

From the 110 billion Euro in organised crime proceeds the study estimates, by far the most is generated in the fields of counterfeiting (42 billion), fraud (exhaustive data could not be acquired, but for multiple trader fraud alone, proceeds of 29 billion Euro are noted), and dealing of illicit drugs (28 billion). What is especially worrisome, is the fact, that organised crime activities in the EU seem to grow in nearly all markets.

Since organised crime fills economic gaps in goods and services that either are not allowed to be traded or are only insufficiently supplied, it is embedded in a great number of different markets, illicit as well as legitimate. These markets are usually used by a plurality of actors, monopolies or oligopolies are the exception. Generally speaking, groups are active in multiple markets at once. They often rely on economies of scale, utilising distribution networks for a broad variety of goods. Taking this route reduces operational costs and raises the profit margin.

Before the cash can be counted, running costs need to be covered. Groups spend a major part of their proceeds on operation, management, personal status symbols and money laundering fees. Only when all of these things are payed for can one account for the profits. What ends up in the pockets of an organised crime group is sooner or later reintroduced into the legitimate economy in some way or another.

While legitimate investments can span a very broad field, typically, there are some markets, where organised crime presence is much stronger than in others. Such markets include food and drink services, construction, wholesale and retail, transportation, the real estate business, and the hotel industry.

The uses of legitimate investments are numerous. Beside the obvious purpose of money laundering, organised crime groups invest in legitimate businesses to increase their profits, to buy real estate to extend their territory, to pay bribes and infiltrate politics, businesses, and administrations, and also to gain personal benefits, like the acquisition of cars or jewellery as status symbols. Legitimate investments can also be used to further facilitate illicit activities, like buying vehicles or tools that can be used for robberies.

One of the strongest instruments in the fight against organised crime is the confiscation of assets. When law enforcement hits them in the wallet, it hurts organised crime groups the most. Unfortunately, data on confiscation is lacking and of bad quality in many cases, if existent at all. More often than not, it is not even managed in IT systems, so going through analogue records makes effective data collection a cumbersome task. On top of that, record systems are exceedingly different from one another, so consistent data from so many different sources is extremely hard to come by.

As these facts suggest, research needs to be radically improved to produce comprehensive insights, which are essential in effectively fighting organised crime. Data collection across the European Union must proceed under a unified system that works the same in all member states. Collection efforts need to be strongly increased in order to have access to the complete picture of organised crime in all countries and markets. With the help of this data, a risk heat map could be created that shows the regions where organised crime is especially prominent. Researchers need to get unrestricted and guaranteed access to all relevant data in order to create a holistic approach to organised crime research that leads to clear and concise policy decision.

Although the collected data presented in the study this article is based on shows a number of key points in the operation and structure of organised crime groups, what stands out even clearer, is that the data available is severely lacking. Only when data collection is unified and exhaustively pursued, is it possible to gain deeper insights into the inner working of organised crime groups, which allow for informed and effective actions. The goal here clearly is to complete eradication of organised crime, a goal that can only be reached if we possess the data that shows us the way.

Links

http://www.transcrime.it/ocportfolio/wp-content/uploads/sites/9/2017/07/Final-Report.pdf

Keywords

Universal Design Concept, behaviour