Two-Way Crimes, Parallel Economies and Professional Enablers: Dissecting Corruption in the EU’s Financial Sector

Abstract

The European Union is in the midst of developing an Anti-Corruption Strategy to achieve the multi-part goal of preempting corruption, improving oversight, strengthening enforcement, and reducing the damage corruption causes to public institutions, companies, communities and citizens. To further this undertaking, we have identified areas and sectors that are especially prone to corruption. This entailed a three-step process of identifying a broad list of high-risk areas, narrowing these to six areas for in-depth study, and examining the character, causes and consequences of corruption in these six sectors.

One of these areas is the financial sector. A significant portion of corruption in the EU either originates from the financial sector or is inflicted upon it; sometimes the line between perpretator and victim is blurred. As the most serious corruption-related crimes, money laundering and tax evasion involve many types of people and organisations including banks, investment advisors, wealth managers and organised crime groups (OCGs). With the help of professional enablers such as lawyers, notaries, accountants and real estate agents, OGCs have built a “parallel criminal economy” in the EU. This complex and overlapping landscape complicates interdiction, as the epicentre of any particular corrupt act is not always easy to pinpoint.