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Europe’s Financial Community at Risk of Underestimating Scale of Money Laundering by Migrant Smuggling Networks

Investigation exposes the movement of funds between criminal groups and the mainstream economy 

Findings from new research into migrant smuggling in Europe suggest that Europe’s financial community has underestimated the extent of money laundering by migrant smuggling networks.

The Criminal Migrant Shipping Network Project - a six month-long investigation conducted by a team of eight investigation journalists from six countries - sought to uncover the people and companies making a profit from selling often hazardous journeys to migrants and refugees hoping to cross the Mediterranean Sea to reach Europe. As part of their investigation, the journalists were granted access to unique Accuity FircoSoft compliance data, including PEP, sanctions and adverse media data, to assist in identifying some of the individuals involved and to establish their financial connections.

Delphine Reuter, working with the help of the European Fund for Investigative Journalism and an Investigative Journalist with ICIJ, said: “People trafficking is a serious crime and a grave violation of human rights. Our investigation aimed to expose the reality that every year, thousands of men, women and children fall into the hands of traffickers, in their own countries and abroad. We established that human trafficking networks have clear financial links to organised crime and terrorism.”

Pascal Aerens, Head of Innovation at Accuity FircoSoft, said: “Financial institutions and corporations have a responsibility to implement thorough KYC procedures so they know who they are doing business with and where their counterparties’ financing originates. As the recent Panama Papers leaks have shown, failing to identify all counterparties and their source of funds, exposes organisations to extremely high levels of risk.”

Pascal and Delphine Reuter, will present the research findings at the ACAMS 12th Annual AML and Financial Crime Conference Europe in London on 24th May, to an audience of financial executives and government officials. The research will reveal that those profiting from human trafficking have been laundering large sums of money through Europe’s financial systems, contrary to a belief within the financial community that the amounts involved are minimal.

The upcoming presentation, entitled ‘How Europe’s Migrant Crisis Finances Terror’, will expose the dark shipping network and the logistics behind the exploitation of migrants, as well as exploring the financial circuits supporting human traffickers and their links to Europe’s financial systems. It will highlight the need for financial institutions and corporations to be aware of the risks of doing business with entities which could be connected to these extremely profitable criminal organisations.

In addition, the presentation will highlight the shipping network involved in migrant smuggling, with ship owners, import and export agencies, seamen-for-hire, captains, and all kinds of middlemen implicated in colluding to benefit from this business.

Aerens added: “The ships used to transport migrants, which are often unfit for purpose, have been acquired from their former owners via a network of front and offshore shell companies used by the smugglers. Monitoring the change of ownership of vessels could detect these dealings and prevent ships from falling into the wrong hands and being misused in this way.”

Accuity FircoSoft is working on collecting vessel change of ownership data as part of its Trade Compliance product portfolio, which aims to mitigate trade-based money laundering risk.

Pascal Aerens and Delphine Reuter will present their findings in detail at the 15.55 - 17.10 Knowledge Session on Tuesday 24th May 2016 at the 12th Annual AML and Financial Crime Conference Europe, taking place at the Queen Elizabeth II Conference Centre, London. The Knowledge Session is titled: Case Study: Investigating How Europe's Migrant Crisis Finances Terror

In numbers: in 2015, human trafficking was the second most profitable criminal activity after drug trafficking:

  • 1 million people entered the EU in 2015 Each paying an average of $4,850
  • Average turnover: $4,8Bn

Source: Europol/Interpol Migrant Smuggling Network Report

Accuity, the leading global provider of risk and compliance, payments and know-your-customer solutions, comprises pioneering FircoSoft and Bankers Almanac. Our unmatched data and technology services deliver the most comprehensive sanctions screening, optimal payment efficiency, compliant transactions, bank counterparty insight and AML screening success. Accuity is owned by one of the world's leading business-to-business data and content providers, RBI, and part of RELX Group.

ACAMS is the largest international membership organization dedicated to enhancing the knowledge, skills and expertise of AML/CTF and financial crime detection and prevention professionals. Its members include representatives from a wide range of financial institutions, regulatory bodies, law enforcement agencies and industry sectors.

The 12th Annual European AML & Financial Crime Conference takes place on 24-25 May at the Queen Elizabeth II Conference Centre, London, and is expected to attract more than 500 financial executives and government officials. The two-day learning event aims to provide insight into emerging money laundering and financial crime threats, the latest prevention techniques and a practical understanding of new regulatory requirements – with a look forward at future compliance demands.

Pascal Aerens is currently Head of Innovation at Accuity FircoSoft. He has been active in financial software development since 1990, first working at the Brussels stock exchange, then SWIFT and Atos-Euronext. From 2003 to 2008, he worked for SIDE International as Head of Product Management, assisting companies and major financial institutions worldwide to achieve regulatory compliance. In 2008, Pascal founded Telovia in Luxembourg, focusing on new compliance areas like Corporates, Anti-Fraud, Anti-Bribery and Anti-Corruption. He designed Panorama Workbench, an investigation and case management platform to address the evolution of the compliance market. His deep understanding of the Middle-East and Asia, together with the large network of relations he developed in these regions, allow him to bring real value as a global compliance expert

Delphine Reuter is a freelance journalist based in Belgium and a journalism training coordinator at IHECS, a Brussels-based journalism school. She specialises in investigative journalism and data journalism. She holds a Master’s degree in journalism from Columbia University.