Europe is losing the fight against dirty money
THE HAGUE — When Rob Wainwright took over the helm of the EUs law enforcement agency Europol in 2009, he faced a big problem: “Black holes.”
Thats how he refers to the massive gaps in information-sharing he found between EU countries on topics from terrorism to money laundering.
Things have changed, at least in part.
As Europe was hit by a series of terror attacks — from Paris to Brussels, from Nice to Berlin — the profile of the EU agency increased and so did the amount of information on terrorism that national governments fed into its databases. However, the same progress has not been made in the fight against financial crime.
“Professional money launderers — and we have identified 400 at the top, top level in Europe — are running billions of illegal drug and other criminal profits through the banking system with a 99 percent success rate,” he said.
“The banks are spending $20 billion a year to run the compliance regime … and we are seizing 1 percent of criminal assets every year in Europe” — Rob Wainwright, director of Europol
Wainwright, who will be leaving his post as Europol director at the end of May after almost a decade in charge, said: “One of my favorite frustrations is on financial crime — the anti-money laundering regime.
“We have created a whole ton of regulations … the banks are spending $20 billion a year to run the compliance regime … and we are seizing 1 percent of criminal assets every year in Europe,” Wainwright, a former intelligence analyst at MI5, Britains domestic intelligence service, said in an interview in his office in The Hague.
Despite that, he said Europe is losing the fight against dirty money because it has used national solutions to tackle an international problem. That makes for a system filled with “inflexibilities,” which prevents the “free-flowing exchange of information across borders.”
According to the latest Europol figures, between 0.7 and 1.2 percent of EU annual GDP is “detected as being involved in suspect financial activity.” Figures from 2011 and 2012, the latest complete data available, show that the total amount of money involved in suspected criminal financial flows (known in the security trade as STRs) in the EU exceeded €29 billion, an estimate that the agency suggests is on the low side.
The future of Europol after the U.K. leaves the EU is a tricky one for Wainwright.
Each European country has its own Financial Intelligence Unit (FIU) — an independent agency whose main task is sorting through reports of suspicious transactions on behalf of prosecutors in order to discover money laundering and the financing of terrorism. But these national agencies do not coordinate on a regular basis. There is no EU-wide coordination body and no common database to store information.
A 2017 Europol study indicated that in 2014, FIUs received almost 1 million reports of suspect transactions, but over 65 percent of them were in just two EU countries, the U.K. and the Netherlands.
The future of Europol after the U.K. leaves the EU is a tricky one for Wainwright, a proud Welshman (he was wearing dragon-shaped silver cufflinks during the interview).
He declined to say what kind of Brexit deal he thinks would be best.
“Dont ask me what that deal will be. I am optimistic and I am not a romantic dreamer normally but from what I see behind the curtains I am confident that we will get a good deal,” he said.
He stressed that the U.K. has been a key part of Europols success and should remain so once a deal is negotiated.
The problem is what level of access the Brits should get to Europol after they leave the bloc.
“I am concerned about how Europol can continue to exercise in an efficient and effective way to help member states fight organized crime and terrorism, and that means we have to ensure that today what is a very significant operational partner for Europol is somehow preserved in the future in an efficient way,” he said.
The problem is what level of access the Brits should get to Europol after they leave the bloc. The Brits would love to keep full access to the agencys databases, which contain information ranging from vehicle and gun registrations to the names of organized criminals, foreign fighters and suspected terrorists.
But Wainwright said that could result in other non-EU countries such as the U.S. and Russia demanding the same access, which would pose problems ranging from “operational security and data security” to “privacy concerns.”
Europol Director Rob Wainwright (right) hosts a tour for Danish Prime Minister Lars Løkke Rasmussen (center) | Remko de Waal/AFP via Getty Images
The second option would be to strike an agreement similar to the one Denmark, which has opted out of EU justice and home affairs policies, has. The deal allows six to eight Danish officers to be based at Europol headquarters, where they process requests from the Danish security services. Wainwright said that kind of deal might not be acceptable to London, which would have to deal with many more requests than the team from Copenhagen does.
A further gap that needs to be filled, according to Wainwright, who is moving to Deloittes cyber team once he finishes at Europol, is the EUs response to cyberthreats. As with money laundering, its a problem dealt with on a national, not an international level.
“There is a gap and the challenge for all of us in the European community is to try to mitigate the effects of that gap,” he said “How can we as the EU community make sure we have the right collective response to this threat, while still observing the treaty line saying this is a sole competence of member states? We have to flip our way of thinking.”
Wainwright has been luckier in his fight to convince countries to share more on topics related to terrorism such as foreign fighters.
“[There are still] parts of the black hole that are not filled” — Rob Wainwright
“The intelligence black hole has been more or less filled,” he said, “At the time of the Brussels attacks [in March 2016] … we had 6,000 intelligence entries in the Europol information system relating to terrorism. Today, two years later, it is half a million.”
The role of the agency has also changed during his mandate. In 2016 the European Parliament approved new powers for the law enforcement agency, pushing countries to provide more information, and making it easier for Europol to set up specialized units on terrorism.
The agency also stepped up its “internet referral unit” to combat online terrorist propaganda by working with social media giants to remove material from terror groups such as ISIS aimed at recruiting Europeans.
Such changes and political pressure allowed the agency to support many more counterterrorism investigations than it did in the past. In 2017, it helped in 439 counterterrorist operations in Europe, up from 127 the year before.
Wainwright conceded that there are still “parts of the black hole that are not filled,” but “its completely different from two or three years ago.”