HomeNewsAnalysisEU Money Laundering Analysis Offers Lessons for Latin America

EU Money Laundering Analysis Offers Lessons for Latin America


A new report by the European police agency Europol examines why so much suspect financial activity results in so few money laundering prosecutions, and offers recommendations to improve the success rate that contain important lessons for Latin America's anti-money laundering frameworks and investigative bodies.

The report, "From Suspicion to Action – Converting financial information into greater operational impact," details how between 2006 and 2014 the European Union (EU) saw a 70 percent increase in suspicious transaction reports (STRs), the filings of suspicious activity that financial institutions and certain commercial actors are obliged to make to their country's Financial Investigation Unit (FIU).

The STRs, of which there were nearly 1 million across the EU in 2014, form the building blocks of money laundering investigations. Europol acknowledges the impossibility of accurately assessing data that is compiled and used in different ways in different countries. Nevertheless, the police body estimates that an average of just 10 percent of STRs are put to use each year.

The rate of success for investigations that begin with an STR was even lower. From 2010 to 2014, Europol found that just 2.2 percent of the estimated proceeds of crime were provisionally seized or frozen, and only 1.1 percent of criminal profits were ultimately confiscated at the EU level.

Europol highlights two key areas that are largely to blame for these low conversion rates.

The first is the growing number of STRs, which is a challenge not only in terms of the capacity to analyze such large quantities of data, but also because much of that data is of limited quality as it is a product of defensive or over-reporting.

The second is the exchange of information between national and international agencies that are not FIUs. As most information is only exchangeed internationally between FIUs, critical data needed to confirm or develop STRs often does not reach the agency that needs it.

The result of this is a lot of data collection and not enough analysis and action, Europol says.

"While considerable efforts are put into generating, handling and processing one million reports annually, these efforts achieve few outcomes and energy may be misdirected," the report states.

SEE ALSO: Coverage of Money Laundering

The report describes two approaches that could help remedy this.

First, it argues that there should be broader and better data sharing practices that take anti-money laundering regimes from the domestic to the international level, reflecting the reality of money laundering itself. Whereas in the past, efforts have focused on cooperation between FIUs, this should be expanded to include different law enforcement agencies and and the private sector, as well as bodies like tax and customs authorities.

Second, enforcement agencies should apply an "intelligence-led" approaching to reporting, shifting from the current "brute force" approach of analyzing high volumes of information to a more targeted approach focused on relevance rather than quantity of data. This could be achieved with better data sharing and cooperation to help authorities allocate resources more efficiently and to give feedback to the private sector on what is useful.

Europol offers numerous specific recommendations as to how the continent's FIUs could bring this about. These include calling for the EU's own FIU and clearing house for STRs, an EU-wide standardization of statistical data and breaking down legal barriers at the domestic level that prevent interagency cooperation and hamper the flow of information.

InSight Crime Analysis

Since the formation in 2000 of Latin America's own transnational anti-money laundering watchdog, the Latin America Financial Action Group (Grupo de Acción Financiera de Latinoamérica - GAFILAT), most of the countries that host the region's largest criminal economies have taken important strides towards establishing anti-money laundering frameworks that meet international standards. However, these new regimes and new volumes of data have not led to a new flood of successful money laundering investigations. 

As laid out for country after country in the US State Department's most recent annual report on global money laundering, the primary reason for this is an inability to investigate and prosecute, whether that takes the form of a lack of resources, a lack of expertise, or the lack of a functioning justice system to prosecute money launderers.

SEE ALSO: Coverage of What Works

In general, European countries are not plagued to the same extent as their Latin American counterparts by weak institutions and and resource constraints. Nevertheless, Europol's report shows that developing mechanisms to better sort, analyze and share information could have a huge impact on the results obtained from the resources allocated.

In addition, Europol's report highlights the necessity of regional cooperation in order to target money laundering at the transnational level, where much of the activity takes place.

The deep rooted issues at the heart of Latin America's shortcomings in terms of turning rules into results are unlikely to be resolved any time soon. However, if countries around the region take Europol's advice, they may well be able to improve results by working smarter not harder.

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.


What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.


Related Content

COLOMBIA / 18 JUN 2021

Colombia's hippos are a well-documented problem. Growing astonishingly fast in number, potentially devastating to the local ecosystem and perhaps lethal…

BRAZIL / 8 MAR 2021

Criminal dynamics in Brazil, particularly its drug trafficking routes, have been shaken up in recent years by the rapid expansion…


Synthetic drugs like methamphetamine, fentanyl, and ecstasy are reshaping Latin America's drug trade.

About InSight Crime


Europe Coverage Makes a Splash

20 JAN 2023

Last week, InSight Crime published an analysis of the role of Amsterdam’s Schiphol Airport as an arrival hub for cocaine and methamphetamine from Mexico.  The article was picked up by…


World Looks to InSight Crime for Mexico Expertise

13 JAN 2023

Our coverage of the arrest of Chapitos’ co-founder Ovidio Guzmán López in Mexico has received worldwide attention.In the UK, outlets including The Independent and BBC…


InSight Crime Shares Expertise with US State Department

16 DEC 2022

Last week, InSight Crime Co-founder Steven Dudley took part in the International Anti-Corruption Conference organized by the US State Department’s Bureau of Democracy, Human Rights, & Labor and…


Immediate Response to US-Mexico Marijuana Investigation

9 DEC 2022

InSight Crime’s investigation into how the legalization of marijuana in many US states has changed Mexico’s criminal dynamics made a splash this week appearing on the front page of…


‘Ndrangheta Investigation, Exclusive Interview With Suriname President Make Waves

2 DEC 2022

Two weeks ago, InSight Crime published an investigation into how Italian mafia clan the ‘Ndrangheta built a cocaine trafficking network from South America to ‘Ndrangheta-controlled Italian ports. The investigation generated…