Migrant smuggling networks ‘increase European money laundering risk’

Research into migrant smuggling in Europe suggest that Europe’s financial community has underestimated the extent of money laundering by migrant smuggling networks, with the movement of funds between criminal groups linked to the mainstream economy.

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 compliance data supplied by risk and compliance software provider Accuity FircoSoft, including politically exposed persons (PEP), sanctions and adverse media data, to assist in identifying individuals involved and to establish their financial connections.

Delphine Reuter of the International Consortium of Investigative Journalists (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, added: “Financial institutions and corporations have a responsibility to implement thorough know your customer (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.”

Aerens and Reuter are today presenting the research findings at the Association of Certified Anti-Money Laundering Specialists’ (ACAMS) 12th annual anti-money laundering (AML) and financial crime conference Europe in London, to an audience of financial executives and government officials. The research reveals 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.

Their 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 emphasise 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 other middlemen implicated in colluding to benefit from this business.

“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,” said Aerens. “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.”


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