Based on criminal information from investigations in the Member States, Europol is assessing the impact of the pandemic across three phases; current, mid- and long-term phase. The report anticipates developments across the threat landscape that will have an operational impact on law enforcement authorities across Europe. Europol also identifies five key factors that influence organised crime during and after the pandemic.
Anticipating the long-term impact of the pandemic on serious and organised crime in the EU is difficult. However, Europol can look to previous moments of crisis, such as the economic crisis of 2007 and 2008, and how these unfolded in terms of security threats to anticipate general developments.
The three phases
Phase 1 – the current situation: Europol’s monitoring efforts to understand the impact on serious and organised crime in the EU has so far focused on immediate developments in the aftermath of the COVID-19 outbreak and the introduction of quarantine measures. COVID-19-related criminality, especially cybercrime, fraud and counterfeiting have followed the spread of the pandemic throughout Europe. More on the current situation can be read in Europol’s previous reports published in March and April 2020.
Phase 2 – mid-term outlook: An easing of lockdown measures will see criminal activity return to previous levels featuring the same type of activities as before the pandemic. However, the pandemic is likely to have created new opportunities for criminal activities that will be exploited beyond the end of the current crisis. It is expected that the economic impact of the pandemic and the activities of those seeking to exploit it will only start to become apparent in the mid-term phase and will likely not fully manifest until the longer term. Some of the relevant crime areas are:
- Anti-money laundering: the pandemic and its economic fallout will exert significant pressure on the financial system and the banking sector. Anti-money laundering regulators must be vigilant and should expect attempts by organised crime groups to exploit a volatile economic situation to launder money using the on-shore financial system.
- Shell companies: criminals will likely intensify their use of shell companies and companies based in off-shore jurisdictions with weak anti-money laundering policies at the placement stage to receive cash deposits that are later transferred to other jurisdictions.
- The real estate and construction sectors will become even more attractive for money laundering both in terms of investment and as a justification for the movement of funds.
- Migrant smuggling: While the economic impact of the COVID-19 crisis in Europe is not yet clear, it is expected that the impact on economies in the developing world is likely to be even more profound. Prolonged economic instability and the sustained lack of opportunities in some African economies may trigger another wave of irregular migration towards the EU in the mid-term.
Phase 3 – the long-term impact:
- Organised crime is highly adaptable and has demonstrated the ability to extract long-term gains from crises, such as the end of the cold war or the global economic of 2007 and 2008.
- Communities, especially vulnerable groups, tend to become more accessible to organised crime during times of crisis. Economic hardship makes communities more receptive to certain offers, such as cheaper counterfeit goods or recruitment to engage in criminal activity.
- Mafia-type organised crime groups are likely to take advantage of a crisis and persistent economic hardship by recruiting vulnerable young people, engaging in loan-sharking, extortion and racketeering.
- Organised crime does not occur in isolation and the state of the wider economy plays a key role. A crisis often results in changes in consumer demand for types of goods and services. This will lead to shifts in criminal markets.
Key factors with an impact on crime during and after the pandemic
Several factors have a significant impact on serious and organised crime during the COVID-19 pandemic. These factors shape criminal behaviour and create vulnerabilities. Based on experience gained during prior crises, it is essential to monitor these factors to anticipate developments and pick up on warning signals.
- Online activities: more people are spending more time online throughout the day for work and leisure during the pandemic, which has increased the attack vectors and surface to launch various types of cyber-attacks, fraud schemes and other activities targeting regular users.
- Demand for and scarcity of certain goods, especially of healthcare products and equipment, is driving a significant portion of criminals’ activities in counterfeit and substandard goods and fraud.
- Payment methods: the pandemic is likely to have an impact on payment preferences beyond the duration of the pandemic. With a shift of economic activity to online platforms, cashless transactions are increasing in number, volume and frequency.
- Economic downturn: A potential economic downturn will fundamentally shape the serious and organised crime landscape. Economic disparity across Europe is making organised crime more socially acceptable as these groups will increasingly infiltrate economically weakened communities to portray themselves as providers of work and services.
- Rising unemployment and reductions in legitimate investment may present greater opportunities for criminal groups, as individuals and organisations in the private and public sectors are rendered more vulnerable to compromise. Increased social tolerance for counterfeit goods and labour exploitation has the potential to result in unfair competition, higher levels of organised crime infiltration and, ultimately, illicit activity accounting for a larger share of GDP.
Europol’s Executive Director Catherine De Bolle:
“Serious and organised crime is exploiting the changing circumstances during the pandemic. From the onset of this crisis, Europol monitored these developments to help Member States understand and tackle these emerging phenomena. The full impact of the pandemic – not only on crime but also more widely on society and the economy – is not yet apparent. However, law enforcement should be prepared to be able to respond to the warning signals as the world deals with the fallout of the COVID-19 pandemic. Now more than ever, international policing needs to work with the increased connectivity both in the physical and virtual worlds. This crisis again proves that exchanging criminal information is essential to fighting crime within the law enforcement community. Europol, as the criminal information hub for all law enforcement organisations, will continue to play its part. ”
Europol has been monitoring the impact of the COVID-19 pandemic on serious and organised crime and terrorism in the EU from the outset of the pandemic in Europe. Understanding ongoing developments and their impact on the internal security of the EU in times of crisis and communicating these insights to our partner law enforcement authorities is of vital importance in formulating effective responses at EU and national level. Europol’s monitoring efforts primarily rely on contributions received from law enforcement authorities in the Member States and our law enforcement partners across the world.
Any forecasting or foresight exercises are speculative to a degree, but relying on expertise and caution it is possible and necessary to draw up potential developments to formulate responses and reinforce resilience to upcoming security threats, including those from serious and organised crime. Using foresight, we can combat security threats proactively and engage in prevention.