Money Laundering in numbers

Money Laundering in numbers

Money laundering is a global issue of significant concern, and the statistics surrounding it are nothing short of astonishing.

Global Estimates:

Each year, an estimated €715 billion to €1.87 trillion of the global Gross Domestic Product (GDP) is tainted by money laundering activities. This staggering figure represents a substantial portion of the world’s economic output, ranging from 2% to 5% of the total global GDP. It underscores the immense scale of illicit financial activities happening worldwide.

In the EU:

The EU, despite its strong regulatory framework, is not immune to the scourge of money laundering. In fact, the statistics within the EU are particularly concerning:

  • 70% of Criminal Networks in the EU: A shocking 70% of criminal networks actively operating within the EU employ some form of money laundering to fund their operations and obscure the origins of their assets. This highlights the extent to which money laundering has infiltrated the criminal landscape in Europe.
  • 80% Misuse Legal Business Structures: Even more alarming is the fact that 80% of these criminal networks operating within the EU misuse legal business structures for their illicit activities. This abuse of legitimate entities demonstrates the adaptability and sophistication of money launderers.
  • Suspicious Activities and Transactions: Within the EU’s financial system and economy, there are between €117 billion and €210 billion worth of suspicious activities and transactions. These activities not only pose a financial risk but also potentially compromise the integrity of the EU’s financial sector.

Here are some examples of money laundering methods:

  1. Underground Banking: This involves networks that receive money with the purpose of making it payable to third parties, all while operating outside regulatory oversight. These secretive financial systems provide a covert means for criminals to move money.
  2. Cash Smuggling: Criminals physically transport large sums of cash across borders or within countries to avoid detection. This method relies on the physical movement of money to legitimize its source.
  3. Money Mules: Money mules are individuals who are recruited to facilitate the transfer of illicit funds between different bank accounts. They act as intermediaries, making it difficult to trace the origin of the money.
  4. Misuse of Legal Business Structures: Criminal networks exploit legitimate business entities to carry out their illegal activities. By using legal structures, they can conduct transactions and operations that appear lawful on the surface.
  5. Money Laundering Through High-Value Products: Criminals invest illicit funds in high-value assets such as real estate, luxury goods, or businesses. This process involves integrating „dirty“ money into the legitimate economy by purchasing valuable assets.
  6. Misuse of Cryptocurrencies: Cryptocurrencies offer anonymity and have become a favored choice for money laundering. Criminals conduct transactions on dark web marketplaces, where an estimated €1.5 billion in cryptocurrency transactions occur, making tracking and identification challenging for authorities.

These examples illustrate the diverse tactics employed by money launderers to legitimize the proceeds of their illegal activities. Understanding these methods is crucial for authorities and organizations working to combat money laundering effectively.

Gross domestic product (GDP)

Country2021 [B USD]2022 [B USD]2023 [B USD]
Austria480.688471.026526.182
Belgium594.748579.059627.511
Bulgaria84.12089.115103.099
Croatia68.93370.54880.185
Cyprus28.42728.46132.032
Czech Republic281.791290.528335.243
Denmark405.688401.125420.800
Estonia36.88937.95141.799
Finland296.970283.124305.689
France2,958.4312,780.1363,049.016
Germany4,281.3484,085.6814,429.838
Greece215.017219.238242.385
Hungary182.275180.013203.829
Ireland513.733533.559589.569
Italy2,115.7622,012.0142,186.082
Latvia39.78641.16746.668
Lithuania66.45970.39079.427
Luxembourg85.64181.70689.095
Malta18.09918.14020.311
Netherlands1,030.3631,010.1931,092.748
Poland681.429690.680842.172
Portugal254.152252.130276.432
Romania285.609301.273350.414
Slovak Republic118.735115.560133.044
Slovenia61.87360.11168.394
Spain1,446.6131,418.9161,582.054
Sweden639.715591.189597.110
Sum5440.7775406.0936011.39
European Union17,273.29616,713.03018,351.127
World96,487.666100,135.361104,476.432

Money Laundering volume estimated to 2% of the Gross domestic product (GDP)

Country2021 [B USD]2022 [B USD]2023 [B USD]
Austria9.6149.42110.524
Belgium11.89511.58112.550
Bulgaria1.6821.7822.062
Croatia1.3791.4111.604
Cyprus0.5690.5690.641
Czech Republic5.6365.8116.705
Denmark8.1148.0238.416
Estonia0.7380.7590.836
Finland5.9395.6626.114
France59.16955.60360.980
Germany85.62781.71488.597
Greece4.3004.3854.848
Hungary3.6463.6004.077
Ireland10.27510.67111.791
Italy42.31540.24043.722
Latvia0.7960.8230.933
Lithuania1.3291.4081.589
Luxembourg1.7131.6341.782
Malta0.3620.3630.406
Netherlands20.60720.20421.855
Poland13.62913.81416.843
Portugal5.0835.0435.529
Romania5.7126.0257.008
Slovak Republic2.3752.3112.661
Slovenia1.2371.2021.368
Spain28.93228.37831.641
Sweden12.79411.82411.942
Sum345.466334.261367.023
European Union345.466334.261367.023
World1,929.7532,002.7072,089.529

Money Laundering volume estimated to 5% of the Gross domestic product (GDP)

Country2021 [B USD]2022 [B USD]2023 [B USD]
Austria24.03423.55126.309
Belgium29.73728.95331.376
Bulgaria4.2064.4565.155
Croatia3.4473.5274.009
Cyprus1.4211.4231.602
Czech Republic14.09014.52616.762
Denmark20.28420.05621.040
Estonia1.8441.8982.090
Finland14.84914.15615.284
France147.922139.007152.451
Germany214.067204.284221.492
Greece10.75110.96212.119
Hungary9.1149.00110.191
Ireland25.68726.67829.478
Italy105.788100.601109.304
Latvia1.9892.0582.333
Lithuania3.3233.5203.971
Luxembourg4.2824.0854.455
Malta0.9050.9071.016
Netherlands51.51850.51054.637
Poland34.07134.53442.109
Portugal12.70812.60713.822
Romania14.28015.06417.521
Slovak Republic5.9375.7786.652
Slovenia3.0943.0063.420
Spain72.33170.94679.103
Sweden31.98629.55929.856
Sum863.665835.652917.556
European Union863.665835.652917.556
World4,824.3835,006.7685,223.822

Directive (EU) 2018/1673 on combating money laundering by criminal law

Money laundering is a significant concern for governments worldwide, including within the European Union (EU). To combat this financial crime effectively, the EU has put in place robust regulations outlined in Directive (EU) 2018/1673. This directive defines key terms, lays out money laundering offenses, and addresses aiding and abetting, inciting, and attempting such offenses.

Definitions Arcticle 2 provides precise definitions to clarify what constitutes „criminal activity.“ It encompasses various forms of criminal involvement, including participation in organized criminal groups, terrorism, trafficking in human beings, corruption, fraud, and more. By clearly defining these terms, the directive ensures a comprehensive approach to combat money laundering.

Money Laundering Offenses Article 3 establishes the core money laundering offenses. It criminalizes actions like knowingly converting or transferring property derived from criminal activity to conceal its origin. Similarly, the concealment or disguise of property’s true nature, source, or ownership is also considered a criminal offense. Importantly, Member States have the flexibility to extend these offenses to property derived from activities in other jurisdictions, ensuring that cross-border money laundering does not go unpunished.

Aiding and Abetting, Inciting and Attempting Arcticle 4 goes a step further by requiring Member States to criminalize aiding and abetting, inciting, and attempting money laundering offenses. This ensures that individuals or entities complicit in facilitating money laundering activities can be held accountable under the law.

By understanding these essential aspects of Directive (EU) 2018/1673, the EU strengthens its ability to combat money laundering effectively. These regulations serve as a robust legal framework to prevent and prosecute this financial crime, contributing to the integrity of the EU’s financial system.

Attention

While the organizations estimate that between 2% to 5% of the global GDP is laundered each year, it’s essential to delve deeper into the factors that may suggest this figure could be just the tip of the iceberg.

One crucial aspect to consider is the concept of „predicate offenses.“ These are the underlying criminal activities that generate the illicit funds subject to money laundering.

In some EU member states, the list of predicate offenses can be quite extensive, encompassing a broad range of criminal behaviors. However, the extent to which these offenses are included in the catalog can vary significantly from one country to another.

Take, for example, the „all-crimes approach“ adopted by countries like Germany. Under this approach, almost any criminal activity can be considered a predicate offense for money laundering. This means that a more extensive spectrum of illicit activities can potentially lead to money laundering charges. If such an approach were to be uniformly applied across all EU member states, it is plausible that the scope of money laundering would expand significantly.

The 2% to 5% of the global GDP estimate provided by the different organizations is based on existing regulations and the predicate offenses catalog in various member states. It’s important to acknowledge that this estimate may be a conservative figure, given the variances in predicate offenses definitions. If a more inclusive „all-crimes approach“ were to become the standard, the amount of money laundered within the EU could indeed surpass the 5% threshold.

Sources:

  • European Commission
  • Council of Europe
  • Eurojust
  • Europol
  • United Nations
  • IMF
  • World Bank Group
  • Transparency International
  • Global Financial Integrity