The investments of organised crime across Europe

Transcription

1 High-Level Conference on a Renewed EU Internal Security Strategy, Brussels 29 th September 2014 The investments of organised crime across Europe Preliminary findings of project Organised Crime Portfolio Ernesto U. Savona Director and Professor (ernesto.savona@unicatt.it) Michele Riccardi Researcher and Professor (michele.riccardi@unicatt.it) Transcrime Joint Research Centre on Transnational Crime Università Cattolica del Sacro Cuore Università degli studi di Trento

2 This presentation Criminal investments in the legitimate economy is one the most important issue that Europe should face today and tomorrow in order to minimize the OC risk Pollution of European markets by criminal money is increasing in times of economic crises Project OCP, funded by DG HOME and coordinated by TRANSCRIME, studies where, why and how criminal groups invest in Europe and tries to identify possible remedies for the future OCP is a further development of the project Mafia investments funded by the Italian Ministry of Interior - National Operational Programme

3 Project OCP - Organised Crime Portfolio 3 Funded by EU Commission, DG Home Affairs Duration: December 2012 November 2014 Final Report: November/December partners 1. Transcrime/Università Cattolica (Italy) - Coordinator 2. Police College of Finland (Finland) 3. AGRASC (France) 4. CAB - Criminal Asset Bureau (Ireland) 5. Guardia di Finanza (Italy) 6. University of Utrecht (Netherlands) 7. Universidad Rey Juan Carlos (Spain) 8. University of Durham (UK)

4 OCP research questions 1. How much do criminal groups earn from illicit markets? 2. Which criminal groups invest illicit proceeds in Europe? 3. In which countries and regions do they invest? 4. In which business sectors? 5. What are the drivers behind criminal investments? 6. What are the costs of criminal investments on the European economy and society? 7. What are the research and policy implications? What should we expect from the future? 4

5 1. Criminal revenues from illicit markets 5

6 Estimates of some illicit markets in Europe Revenues per year - euro millions 7 OCP countries Whole EU 6 Heroin 5,700 7,990 Cocaine 5,300 6,770 Cannabis 5,890 6,690 Amphetamine 3,050 6,540 Counterfeiting 22,030 42,710 ITTP 5,240 9,370 Illicit firearms TOTAL 47,200 80,440 Source: OCP Preliminary results ( But other profitable illicit activities (e.g. frauds, organised theft, match-fixing) also emerge

7 2. Criminal groups investing in Europe 7

8 A plurality of criminal actors 8 Italian mafias - Ndrangheta - Camorra - Cosa Nostra Chinese OCGs Russian/Georgian OCGs Outlaw Motorcycle gangs Former terrorist and paramilitary groups Smaller OCGs Free-lance entrepreneurs and brokers Emerging Joint-ventures among different OCGs to manage legitimate businesses

9 3. Where do criminal groups invest 9

10 Geography of criminal investments Most EU member states are interested by criminal investments Regions with the highest evidence of investments: - Southern Italy - North-western Italy (especially Lombardy) - Southern Spain (especially Andalusia) - Provence-Alpes-Côte d'azur - Adriatic coast - Large urban areas (Madrid, London, Paris, Berlin) 10 - Border areas and transit ports

11 Different groups invest in different countries 11 Investments of different groups have different geographical patterns Collected evidence suggest that: Some groups (e.g. North African, Turkish, Colombian) tend to invest back in their home country Some other concentrate only in certain regions Some criminal groups (e.g. Russian/Georgian, Camorra, Ndrangheta, Chinese) invest in a wide number of EU member states Some countries (e.g. Spain) attract investments from a wide range of OCGs

12 Cosa Nostra OCGs investments in Europe Preliminary OCP map September Source: Preliminary analysis (September 2014) Project OCP (

13 Camorra OCGs investments in Europe Preliminary OCP map September Source: Preliminary analysis (September 2014) Project OCP (

14 Ndrangheta OCGs investments in Europe Preliminary OCP map September Source: Preliminary analysis (September 2014) Project OCP (

15 Russian/Georgian OCGs investments in Europe Preliminary OCP map September Source: Preliminary analysis (September 2014) Project OCP (

16 Chinese OCGs investments in Europe Preliminary OCP map September Source: Preliminary analysis (September 2014) Project OCP (

17 Motorcycle gangs investments in Europe Preliminary OCP map September Source: Preliminary analysis (September 2014) Project OCP (

18 Other OCGs investments in Europe Preliminary OCP map September Source: Preliminary analysis (September 2014) Project OCP (

19 Italian Mafias investments in Europe Preliminary results Project OCP 19 Source: Preliminary analysis Project OCP (

20 Russian/Georgian, Chinese, Motorcycle gangs investments 20 Source: Preliminary analysis Project OCP (

21 Other criminal groups investments in Europe 21 Source: Preliminary analysis Project OCP ( Transcrime elaboration

22 22 3. Preferred business sectors

23 Business sectors with evidence of criminal investments HIGH evidence MEDIUM evidence EMERGING sectors Bars and restaurants Construction Wholesale and retail trade (in particular of food products and of clothing) Transportation and logistics Hotels Real estate activities Renewable energy Casinos, VLT, slot machines Money transfer agencies Waste and scrap management Agriculture and food companies 23 Source: OCP Preliminary results (

24 Business sectors and criminal groups Italian mafias Chinese OCGs Russian/Georgian OCGs Motorcycle gangs Other OCGs (e.g. Eastern European) Real estate Construction, mining and quarrying Wholesale and retail of food Bars and restaurants Renewable energy (e.g. windpower) Bars and restaurants Wholesale and retail trade (clothing and textiles) Sex, tattoo and other personal activities Money transfer agencies Real estate Wholesale trade Bars and hotels Casinos, VLT, slot machines Private security Maintenance and cleaning services Tattoo shops and sexy shops Import/export Transportation and logistics Casinos, VLT, slot machines 24 Source: OCP Preliminary results (

25 25 5. The main drivers

26 Drivers behind criminal investments Criminal investments are driven by: Laundering of criminal proceeds Cleaning criminal reputation through legitimate activities Control of the territory Infiltration into the political/administrative sphere Social consensus (e.g. jobs offers) Cultural reasons 26 Functional reasons (e.g. trade of food products used for drug trafficking; oil companies to commit VAT frauds, etc.)

27 27 6. Impact

28 Impact of criminal investments Distortion of market competition Manipulation of public procurements Increase in corruption Increase in market prices (e.g. real estate) for the injection of illicit cash Loss of productivity due to sub-optimal investments Decrease in government tax revenues Costs of law enforcement and criminal justice Costs of confiscation (e.g. to pay judicial administrators to manage confiscated companies) Health costs (e.g. use or sale of low quality products) 28

29 6. Research and policy implications Looking at the future 29

30 Confiscation must be made more effective Extend confiscation powers to European authorities Improve confiscation of legitimate businesses, as successfully learned from the Italian experience Increase harmonisation of regulation on confiscation: asimmetries across countries produce opportunities for criminal investments Improve the management of confiscated assets, in particular companies: good quality management is crucial for effective confiscation 30

31 Risk assessment to be improved Project OCP has provided elements on criminal investments (Where, Who and Why) that should be continuously updated and detailed. What to do next? Launching a European Observatory which could collect and analyse better data on the economics of organised crime (revenues, investments, drivers) Setting up competent national authorities to monitor the risks of criminal infiltration Reshaping Law Enforcement action to investigate and manage these risks 31 Passing from «cold» maps of past cases to «heat» maps of risks (see next slides)