Sources and Mechanisms for Financing of Organized Crime Activities in Europe

• In Event: The Infiltrations of Organized Crime Groups into the Legal Economy from a Transnational Perspective

Abstract

Financing of organized crime (OC) activities have never received much attention from academics and practitioners. Little is known about how OC groups access and raise capital for initiating or running established criminal activities. Criminal enterprises at some point face many of the financial challenges that are typical for legal businesses. Criminal entrepreneurs may need financing to start business, meet recurring financial needs, cover incidental expenses, support expansion of their enterprise or retire from market. The research findings, which will provide some insights in this little explored area, build on the FINOCA study, which is an EU-wide research where academia and law-enforcement practitioners have worked together. The research focuses on several key criminal activities - illicit tobacco trade, cocaine trafficking, organized VAT fraud. The methodology of the study includes survey among experts in 27 EU countries, follow-up interviews and 11 country case studies. The preliminary results from the study show that both criminal and legitimate sources play important role in the financing of organized crime activities. Furthermore, most organized crime activities are to a large extent embedded in the legitimate economy and dependent on the legitimate financial institutions for their financial transactions.

Authors

• Alexander Stoyanov, Center for the Study of Democracy

• Philip Gounev, CSD - Center for the Study of Democracy