Out of their hands: Europol and asset recovery

The main motive for organised crime is financial gain. Identifying and confiscating the profits of international criminal networks is therefore a top priority for law enforcement, and Europol has provided significant support in the field of asset recovery in recent years. This is a crucial mechanism for deterring criminal activity, and law enforcement agencies worldwide are investing great resources into asset recovery than ever before. 

This is what led to the establishment of Europol’s European Economic and Financial Crime Centre (EFECC) by Executive Director Catherine De Bolle in 2020. While providing operational and analytical support to Member States and Europol’s partners, EFECC is also primarily focused on tracing, identifying, and freezing criminal assets. This has proven to be invaluable in light of the growing complexity of investigating criminal networks, a development influenced by improvements in technology and growing instances of cross-border crime. The pandemic also illustrated that a key characteristic of criminal networks is their agility in adapting to and capitalising on changes in the environment in which they operate.

But how are criminal assets defined? Assets are any property, movable or immovable, tangible or intangible, held by an individual or a legal entity. They are criminal whenever their origin is tainted. This can include, inter alia, the:

• direct proceeds of a crime (e.g. the jewellery stolen from a shop);
• indirect proceeds of a crime (e.g. a car purchased thanks to the money from the stolen jewels);
• instrumentalities of crime (e.g. the car used to commit the jewellery robbery). 

Financial investigations determine what assets are criminal, and which assets are eligible for recovery proceedings. This is where Europol’s asset recovery unit can provide essential expertise.

Cracking down on criminals’ lavish lifestyles

Most criminals are motivated by financial gain. Criminals aim to use stolen funds to create lavish lifestyles and often go to extreme measures to hide the origins of their illicit gains.

In 2018, Europol aided the French Gendarmerie in arresting a suspect behind an international corruption and money laundering scheme. The suspect had initially faked his own death, fled his country of origin, and was found living in a French castle. In 2022, the suspect was sentenced in France to four and a half years in prison, including six months suspended and a fine of EUR 100 000. The estate he had purchased was also confiscated as it was considered an indirect proceed of his crimes.

More recently, Europol provided analytical and operational support to the Spanish police in an operation that took down a criminal network involved in drug trafficking across multiple member states. Europol was decisive in uncovering a variety of methods used to transfer and launder the illicit profits generated by drug trafficking. These include the clandestine transport of large amounts of cash, the use of the informal value transfer systems and investments in luxury goods such as yachts, watches, vehicles or real estate and property renovations. The criminal network further invested in companies located in several European countries and used loans and mortgages to businesses to launder illicit funds.

Europol’s resources in asset recovery were also deployed in the context of the Russian invasion of Ukraine in 2022. Operation Oscar, conducted with the support of Eurojust and Frontex, supported financial investigations by EU Member States targeting criminal assets owned by individuals and legal entities that had been sanctioned in relation to the conflict. As well as targeting criminal assets themselves, Operation Oscar supports Member State investigations into circumvention of sanctions.

But how does Europol make these operations happen on the ground? Who are the people doing the investigating, and what tools do they use for their work?

Asset recovery offices

Each EU country has an asset recovery office and these offices can communicate directly with each other and with Europol via SIENA, Europol’s secure messaging platform for use by law enforcement. The decision to create a network of asset recovery offices was established in 2008 by the EU Commission as a new approach for connecting law enforcement authorities dealing with asset recovery in different countries. As part of this decision, all EU Member States were required to have an asset recovery office. According to the 2021 SOCTA, from 2016 to 2020 the volume of information exchanged among asset recovery offices in the EU doubled, while staffing levels increased by 18 % on average, displaying the need for these specialised teams and the importance of international cooperation.

This network is particularly effective as each office has a legal requirement to answer any request from another office within one week. Europol co-chairs this platform with the EU Commission and performs a crucial role in connecting the different offices.

Creating international asset recovery networks

Criminals transfer and spread their assets across multiple jurisdictions and make it increasingly difficult for national authorities to trace, freeze and confiscate them. They then use these assets to invest in further criminal activity or to facilitate ostentatious lifestyles that they cannot sustain. Most of the time, criminals do not necessarily hide their profits, they simply reinvest them in further criminal activities. When it comes to laundering money, criminals use numerous techniques including investing in works of art and real estate, amongst other options.

CARIN

Another important network in the field of asset recovery is the Camden Assets Recovery Inter-Agency Network. CARIN’s mission is to enhance efforts that deprive criminals of their profits. This network was established in 2004, with the permanent secretariat located at Europol and staffed with Europol specialists. As part of this network, members can gather to discuss strategic topics related to asset recovery and ways to improve cases. In 2022, CARIN worked on the following topics:

• best practices in asset management;
• asset recovery and anticorruption;
• asset recovery in response to international aggressions;
• strengthening ARINs (Financial Action Task Force projects).

CARIN’s membership comprises 61 jurisdictions - EU and non-EU - and 13 organisations that are either members or observers. As of 2023, CARIN (together with the other alike asset recovery networks created worldwide) can reach out to 174 jurisdictions. 

As part of CARIN, there are points of contact in all participating countries. One of the main advantages of this is that law enforcement is able to quickly and effectively contact their counterparts in different jurisdictions all over the globe. For example, CARIN specialists from countries that are continents apart can rapidly get in touch via the network and successfully recover stolen assets.

Through CARIN we have a very trusted community of asset recovery practitioners, and this enables us to connect the dots as never before.

Frédéric Pierson, European Financial and Economic Crime Centre

Legislation

All activity by law enforcement regarding asset recovery is subject to a robust legal framework which is currently under revision, as policymakers look to enhance its strength. The pillars of the EU regime are Council Decision 2007/JHA/845 and Directive 2014/EU/42 which sets minimum rules for the freezing, management, and confiscation of criminal assets. Member States have various interpretations and applications of laws related to asset recovery.

There is currently a proposed Directive on asset recovery and confiscation which will make it easier for police to identify, freeze and manage assets. It will also cover all relevant criminal activities carried out by organised crime groups, enabling confiscation of all relevant assets. 

Ensuring crime doesn’t pay

Europol functions as the central hub around which international asset recovery offices and networks revolve, and it links countries so that they can clearly see patterns of criminal activity. Each of the instruments described in the article is part of a bigger picture, targeting the financial incentives that spur organised crime. 
This international cooperation, and Europol’s role in creating it, is therefore crucial in ensuring that crime doesn’t pay.