By PAUL O’DONOGHUE, Senior Correspondent
POLICE and prosecutors should be able to provide “case specific” information to financial institutions to help combat financial crime, Europol has said.
A new report from a public–private partnership (PPP) based in the organization has said this type of collaboration can help financial crime investigators get a better understanding of cross-border illicit money flows.
The report came from the European Financial and Economic Crime Centre (EFIPPP) a European partnership between investigative services, financial intelligence units and banking institutions, which is based in Europol at the Hague.
Europe’s new AML Regulation introduces partnerships for information sharing between obliged entities – banks and FIs etc – for improving the detection of illicit financial flows.
Already several EU countries have established PPPs and similar mechanisms enabling operational co-operation between banks, FIUs and investigators.
“While these initiatives have shown the crucial role of co-operative mechanisms in advancing criminal investigations, investigative authorities have been less involved in the debate about public co-operation in the fight against financial crime,” the guide says.
The main thrust of the guide is to build awareness in the police in particular about the potential of co-operation with banks and fintechs in gathering information about an investigation.
“With this practical guide, EFIPPP delivers on the call made by the European Commission in its EU roadmap to fight drug trafficking and organized crime,” the agency says.
The policy summary said that a key objective of cooperation should be to establish a “trust-based approach” between financial institutions and investigative bodies such as law enforcement and Financial Intelligence Units (FIUs).
It said this is where the two parties work together in a secure environment to disrupt illicit financial schemes.
The EFIPPP gave five case studies of such types of cooperation:
- Law enforcement investigating an alleged member of a criminal network provides details about the suspects links to crime to a financial institution. ‘This allows the company to uncover connections with the unknown individuals and thereby identify new leads or the ongoing investigation.
- After a successful investigation into a gang, investigators suspect other members of the network are at large. They give a financial institution information, such as the names and accounts of convicted individuals. This allows the company to generate new leads, ‘allowing the opening of new criminal investigations.’
- After getting an order to obtain information held by an FI about a suspect, the investigator gives the I more details to ensure it will receive more targeted information.
- In a scenario after a terrorist attack, an investigator gives an FIU details about the profile of arrested attackers to help identify other members of the network.
- After detecting a criminal abuse of its services, an FI ‘proactively reaches out to investigative authorities’, as well as completing its mandatory reporting to its FIU. This lets both organizations develop a strategy to secure evidence.
The EFIPPP emphasizes the importance of establishing a governance structure within and between public and private organizations to improve cooperation.
‘[This] is particularly important to prevent unintended consequences, such as the closure of accounts of unsuspected customers,’ it said.
’And to protect the integrity of investigations, especially through appropriate precautions or the secure handling of sensitive information.’
A “pre-launch” of the guide was held in Brussels this month where the authors said the document should support criminal law investigative authorities to contribute in public-private partnerships in the EU.
The Practical Guide builds on the 2022 staff working paper produced by DG FISMA [the EU Directorate-General for Financial Stability].
Europol said the guide should be seen as a resource for criminal law authorities in the EU to understand AML/CFT public-private partnerships and how they can play a role to contribute to, or establish, such a cooperative mechanism.
In particular, the Guide is designed to take account of the nuanced approach required in civil-code legal jurisdictions.
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