Metric of the Week: Europol Crime Report

Posted on 6 May 2011 by

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We might end up running some of this again in the Intel Intelligencer, because the release by Europol last week of its EU Organized Crime Threat Assessment has both a treasure trove of new metrics and a wide range of intelligence which is of use to crime and intelligence analysts seeking information on crime trends.

This is an important report for many reasons, and we’ll just point at a few here.

Top on our list of trends which are currently affecting Europe and may or will affect the US:

Use of the Internet By Organized Crime
This is, of course, one of our main concerns here at PLI: as criminal groups embrace the logistical and jurisdictional efficiencies of the Internet, law enforcement must be, and is obviously not, keeping up.

Organised crime is changing and becoming increasingly diverse in its methods, groups structures, and impact on society. A new criminal landscape is emerging, marked increasingly by highly mobile and flexible groups operating in multiple jurisdictions and criminal sectors, and aided, in particular, by widespread, illicit use of the Internet. Criminal groups are increasingly multi-commodity and poly-criminal in their activities.

In case all that sounds too esoteric, consider this:

As a communication tool, information source, marketplace, recruiting ground and financial service the Internet facilitates all types of offline organised criminality, including illicit drug extraction, synthesis and trafficking, trafficking in human beings (THB) for sexual exploitation, illegal immigration, Mass Marketing Fraud (MMF), MTIC (value added tax) fraud, euro counterfeiting and the trade in prohibited firearms. In particular, the perceived anonymity afforded by communications technologies such as email, instant messaging and Internet telephony (VoIP) has led to them being used increasingly by organised crime groups as a countermeasure to law enforcement detection and surveillance.

This needs no further comment by us. Nor does this:

The widespread adoption of Internet technology in the EU has also prompted an unprecedented expansion in the markets for child abuse material and intellectual property theft, especially for copyrighted audio-visual material and software.

Or this:

There are indications that use of the Internet increasingly facilitates the transnational marketing of sex workers, in cooperation with specialist web hosts and administrators. It is anticipated that this trend will increase, as will the number of women sexually exploited in less visible, online environments.

Payment (Debit, Credit) Card Fraud

Around 80 per cent of non-EU fraud against EU payment cards is committed in the United States. For authorities in the EU, therefore, including financial institutions bearing significant losses from this criminal activity, the prevention of illegal withdrawals in regions without the EMV standard is now a high priority. Some banks in the EU have already chosen to issue EMV-only cards (which are not accepted outside the EU) or to block transactions outside the EU for debit cards with magnetic strips. This may lead to further consequences.

They’re talking about the fact that the impact of crime is so great, European banks are considering not letting their cash cards work in the United States. Part of this is because the US has the laughably ineffective Payment Card Industry Data Security Standard and associated vendor rules, which are woefully inadequate to protect cardholders and card issuers to the level of protection in Europe.

The consequences of such a move could be grave indeed for American companies seeking to accept payment from European tourists. To put this into context, Visa International reports that Visa card spending in the United States by foreign tourists rose 18% in 2010, to more than $34 billion, from $29 billion in 2009. As a reference, in 2010, $4.3 billion was spent by visitors from the United Kingdom, France and Germany alone. Visa cardholders from China (64%), Brazil (63%), Saudi Arabia (61%), Colombia (42%), and Russia (42%) had the largest growth in 2010 compared to 2009, and 15 of the top 25 source countries saw double-digit growth from 2009 to 2010 (Read the full report here).

Fewer cards also may mean more cash and travelers checks being carried by foreign visitors, making them more attractive targets for robbery.

Holy Shlamole.

Digital Money Crime

Organised crime groups make ready use of new technology to launder the proceeds of crime, in particular using digital currency providers at the layering stage. Digital currency operators, such as Webmoney and Liberty Reserve, have been used by criminals, attracted by a lower level of regulation and a capacity to blur money trails. In addition online gambling facilities are widely used to launder criminal proceeds, while the misuse of the currency of virtual worlds has also been observed.

If your agency has not spent time thinking about digital money, you need to make this a priority. We highly recommend listening to or meeting with Lt Charles Cohen of the Indiana State Police, who’s been speaking on this topic for years. He holds webinars on the topic which we recommend as well, such as Investigating Cyberspace Money Laundering: Tools, Tricks and Techniques.

Cash

Due to overwhelming evidence that the 500 euro note is almost exclusively the preserve of criminals, banknote wholesalers have stopped supplying the note in the UK: however, it remains legal tender. Fictitious contracts are used to legitimise cash movements. In addition, the last two years have seen a 20 per cent increase in transnational movements of precious metals.

Obviously the €500 banknote issue is primarily of European concern, but the fact that there is a move afoot to reduce its circulation should be of interest to everyone (it’s been of concern since at least 1999, when we first noticed discussion of illicit cash operations shifting to the euro (banknotes and coins became available in 2002) because moving from the US $100 note to the €500 note reduces by 80% the weight and bulk of cash).

Human Trafficking
Europol is tracking an increase and changes in the way human traffickers do business.

Criminal groups involved in THB are extremely sensitive to emerging or changing demand, swiftly providing human resources to be exploited in a range of environments…The most threatening organised crime groups are those capable of controlling the entire trafficking process from recruitment to forced labour or prostitution, including transportation, the provision of documents, the execution of high level corruption and money laundering. These groups have the capacity to handle large numbers of victims and have established logistical bases and contacts in source, transit and destination countries.

Obviously this is of immense concern to law enforcement. We are concerned primarily with statements that the face of the human trafficker is changing:

  • Increasing numbers of women are becoming involved in the trade (across ethnic lines).
  • The rising cost of air travel may force traffickers to use less expensive – and more dangerous and oppressive – sea and road transport.
  • Migrant flows stemming from unrest in North Africa and the Middle East may provide more opportunities to these organized criminals.
  • In addition to traditional fields of exploitation (prostitution, begging and theft, textile and agricultural sectors), sectors such as construction, tourism, catering, nursing and domestic service are increasingly affected by human trafficking

We were perhaps most concerned with a statement in the report which speaks to the commoditization of horror and suffering:

Traffickers have considerably reduced the amount of violence used against their victims. Many have sought to adapt their image to that of helpful service providers and indispensable intermediaries between clients and victims.

We’ll let that one stand without comment, as well. You can download the full report here, or directly from the EU site here.