So-Called Stablecoins

FATF Report to the G20 Finance Ministers and Central Bank Governors on so-called stablecoins1 have the potential to spur financial innovation and efficiency and improve financial inclusion. While so-called stablecoins have so far only been adopted on a small-scale, new proposals have the potential to be mass-adopted on a global scale, particularly where they are sponsored by large technology, telecommunications or financial firms. In the same way as any other large scale value transfer system, this propensity for mass-adoption makes them more vulnerable to be used by criminals and terrorists to launder their proceeds of crime and finance their terrorist activities, thus significantly increasing their risk of criminal abuse for money laundering and terrorist financing (ML/TF) purposes improve financial inclusion.

While so-called stablecoins have so far only been adopted on a small-scale, new proposals have the potential to be mass-adopted on a global scale, particularly where they are sponsored by large technology, telecommunications or financial firms. In the same way as any other large scale value transfer system, this propensity for mass-adoption makes them more vulnerable to be used by criminals and terrorists to launder their proceeds of crime and finance their terrorist activities, thus significantly increasing their risk of criminal abuse for money laundering and terrorist financing (ML/TF) purposes…
Virtual-Assets-FATF-Report-G20-So-Called-Stablecoins

The Dark Wash

Epstein & Friends: Managing PEPs and Your Exposure to Risk.
Rachel Woolley reports: What is a PEP, and why should financial institutions be vigilant when assessing the risk of doing business with one? What if someone is not a PEP, but an individual that happens to be associated with one through family, business or other close personal connections? Is Kanye West now a PEP?

The definition of a politically exposed person (“PEP”) varies slightly from jurisdiction to jurisdiction but is generally accepted to include individuals that hold a “prominent public function”, including presidents, prime ministers, and other senior politicians. The definition also extends to members of royal families, senior executives of state-owned entities and heads of international organisations, such as the UN, WHO, IMF and the World Bank. Most jurisdictions consider individuals with the ability to direct and control government funds, or the ability to influence decisions, to be politically exposed, and thus could be susceptible to external influence, bribery, or corruption.

It is important to note that identifying an individual as a PEP is not a suggestion of previous or future criminal behaviour. However, it is necessary for financial institutions to adequately identify those individuals that not only hold prominent public functions, but also those that are considered to be closely connected to senior politicians, like family members and business associates, i.e. “known close associates”. The purpose of determining if an individual is a PEP or not is so additional scrutiny can be applied to the financial activity of such individuals. The source of wealth and source of funds of a PEP must be identified, both of which help to paint a picture as to the expected activity of that PEP throughout the relationship with the financial institution. Ongoing activity must also be assessed in order to identify any transactions that may be related to bribery or corruption.

But what about friends? Shouldn’t financial institutions also be concerned about individuals who have close personal connections to influential politicians? The nature of such relationships is important to consider. It is not a crime to be friends with a PEP of course, but questions should be asked about any linked financial transactions or mutual business interests. Close relationships between world leaders should also be considered, particularly where one stands to benefit from the success of another. Financial institutions should be alert to the potential for financial activity relating to such individuals, especially through any associated individuals or companies.

Political connections aside, wealthy individuals with prominent business interests are categorised as high net worth individuals (“HNWI”) and their financial activity should also be subject to increased scrutiny as a result. This is especially relevant when you consider that such individuals may stand to benefit if political decisions are made in their favour or interest, and whether or not any financial activity has occurred that may have influenced such decisions. It is also likely that such individuals mix in the same social circles as high-ranking officials, some of whom are wealthy individuals with prominent business interests in their own right. So, isn’t it important to identify and scrutinise these connections carefully?

I’m sure you’ll have seen many photographs of senior politicians alongside well-known public figures, including celebrities. You may also have seen photographs that have been widely circulated on social media of Jeffrey Epstein alongside many senior political figures. Questions have been asked as to the nature of such relationships, financial, political, or otherwise. If you haven’t yet seen the documentary, “Jeffrey Epstein: Filthy Rich”, then it’s worth watching. Consider the nature of the relationships that Epstein had with political figures, and whether his financial support or other inducements could have been used to unduly influence decisions to his benefit.

Another must-watch is Ava DuVernay’s 13th, which examines racial inequality in the United States. The documentary also looks at the influence powerful corporations have on legislation intended to bolster corporate profits while negatively impacting other members of society, often with devastating long-term consequences.

And if you have already completed Netflix then consider watching Hamilton, now streaming on Disney+. Keep an eye/ear out for the part relating to one of the first sex scandals in American political history, the Hamilton-Reynolds affair in 1791. James Reynolds extorted Alexander Hamilton, the first Secretary of the Treasury in the US, who was involved in an affair with Reynolds’ wife. Hamilton was ultimately confronted about possible corruption, answering questions as to whether or not the financial payments were in fact misappropriated government funds.

Like all things financial crime related, context is important. As a reminder, being a PEP is not a crime, but it is critical that financial institutions are alert to potential criminal financial activity when doing business with one. Knowing how to identify a PEP or identify individuals that have close associations with one is a crucial element of financial crime prevention. Understanding the nature of relationships and expected financial activity helps to identify activity that may be illicit. Consider individuals in positions of influence or power, particularly those with the ability to direct or control government funds. Also consider individuals with close personal connections. Is it reasonable to invite casual acquaintances to visit your private island, for example? About as reasonable as a celebrity running for the highest office in the land. Selbstmordwache 600 la
@afranco

Zoonotic Diseases And How To Break The Chain Of Transmission

While wildlife are the most common source of emerging human disease, domesticated animals may be original sources, transmission pathways, or amplifiers of zoonotic disease. Such linkages – as well as the interconnectedness with issues such as air and water quality, food security and nutrition, and mental and physical health – should inform policies that address the challenges posed by current and future emerging infectious diseases, including zoonoses….Key message

In this time of crisis, thousands of papers and guidelines have already been published about COVID-19. Most of these consider the important questions of how to respond to the ongoing public health crisis, or how to mitigate the impacts of the pandemic. This report takes a step back and considers the root causes of the emergence and spread of the novel coronavirus and other ‘zoonoses’—diseases that are transmitted between animals and humans. The report also offers a set of practical recommendations that can help policymakers prevent and respond to future disease outbreaks. 

UNEP Executive Director Inger Andersen and ILRI Director General Jimmy Smith launched the report at a press briefing in New York City on 6 July 2020. Watch session here. Zoonotic diseases and how to break the chain of transmission

VAT-Fraud With Sale Of Sugar And Cooking Oil In Hungary

Unravelled International Coordination Led By Eurojust.

In an operation in Hungary, Austria, the Czech Republic, Slovakia and Serbia, coordinated by Eurojust and supported by Europol, Hungarian authorities have arrested two leaders of an organised crime group responsible for massive VAT fraud with the sale of sugar and cooking oil imported from EU member states. In all, 33 locations in 5 countries were searched to unravel a two-year long scam to avoid payment of value added tax to the Hungarian authorities, which missed out on approximately EUR 10 million in income. The operation had no impact on the end users of the sugar and cooking oil.

The criminal network, which operated mainly in Hungary, imported huge quantities of sugar and cooking oil from the European Union through domestic companies. The products were resold to Hungarian wholesalers; however, the VAT incurred was not paid. As part of their VAT carousel fraud, they declared the EU purchases as domestic, which enabled them to significantly reduce the VAT payable. Moreover, these products were purchased at a net price with a minimum margin, so that an unfair advantage was gained over market competitors. Approximately EUR 10 million was lost to the Hungarian budget through avoidance of the VAT payment.

Given the cross-border dimension of the criminal activity and the need to coordinate the multiple judicial requests with judicial and executing law enforcement authorities from other countries, the case was referred to Eurojust.

Eurojust supported the Hungarian judicial authority with the execution of European Investigation Orders and other judicial instruments for the other countries involved, a result of which numerous witness hearings and house searches and document seizures were made outside Hungary.

On 23 June, Eurojust set up a coordination centre in cooperation with Europol. During the action day, eleven simultaneous searches and twelve witness hearings took place in Austria, the Czech Republic, Slovakia and Serbia, in addition to 22 house searches in Hungary. Altogether, nine suspects were interrogated, of which two were arrested and one real estate was seized. Over 110 officers were deployed in the operations on the ground.

In the run-up to the action day, Eurojust facilitated direct contact between the national judicial and law enforcement authorities from all 5 countries involved, helping to map out the criminal activity, providing translations and hands-on operational support.

In Hungary, the National Tax and Customs Administration, together with the relevant judicial and police authorities, took the lead in resolving the case.

In Slovakia, the Regional Prosecutor´s Office of Banská Bystrica coordinated the EIO execution, while the investigative measures requested were carried out by the regional Police.

Additional support was provided in the Czech Republic by the Regional Public Prosecutor´s Office in Brno and the Regional Directorate of the Police in South Moravia.

In Austria, several public prosecutor’s offices, police and fiscal authorities were involved in the case.

In Serbia, the Higher Prosecutors’ Office in Novi Sad and the Ministry of Interior, Crime Investigations Directorate, Anti-Corruption Department, helped to execute the Mutual Legal Assistance request.
VAT-fraud with sale of sugar and cooking oil in Hungary unravelled
Eurojust supports action against tax fraud in Hungary

Tackling Transparency in the Time of Covid

Anne Wilson-Chapman of the International Consortium of Investigative Journalists writes about the ongoing fallout from the Panama Papers in Malta, the ontinuing effort to tie Covid tax relief packages to tax transparency and Luanda ‘leaks.’

Maltese Secrets
Malta’s former deputy prime minister, Konrad Mizzi, was voted out of his party last week because of his Panama Papers connections. Our 2016 investigation revealed he incorporated undeclared shell companies shortly after taking office.  His expulsion came after he refused to step down.

“Toothless Bans”
Poland, France, Belgium and Denmark are among the European nations that want to stop companies that use tax havens from getting coronavirus-related relief funds. But tax reformers argue the laws are ‘toothless’. It  don’t go far enough and leave too much wiggle room for companies. “What we really need to be asking are specifics like: ‘Give us beneficial ownership. Give us country-by-country reporting. Comply or explain,'” said tax expert Professor Richard Murphy.

Denying Justice
Angolan billionaire Isabel dos Santos claims she has been “denied justice”  by the country’s “rigged” legal system. A Luanda court threw out an appeal to unfreeze personal and corporate bank accounts belonging to dos Santos, her husband and her senior business managers. The assets were frozen in December, just weeks before Luanda Leaks was published. Angolan prosecutors say her claim is “unfounded.”

New Tax Committe
The European Union has established yet another tax committee – albeit this time a permanent one to focus on tax avoidance in the region. The subcommittee will focus on industrial-scale corporate tax avoidance by global tech companies, and the lack of transparency around multinationals’ tax information. But the new body will have limited powers, and won’t tackle money laundering.

There Is No Transparency

No Transparency in Kyrgyzstan’s Coronavirus Spending

The government of Kyrgyzstan is planning to spend $645 million on the COVID-19 crisis. But whether donations from its own citizens or grants and loans from international institutions, it is offering no detailed information on where the funds are going. One spokesperson said the government did not have the resources to track down the spending.
 

Credit to OCCRP: Compounding the issue, the country’s public procurement law was quietly changed in the middle of the crisis to ensure still greater secrecy.

On the very day the first COVID-19 cases were identified in the country in mid-March, the Ministry of Finance published a press release calling on “every caring citizen of the Kyrgyz Republic who sincerely wants to contribute” to donate money for the fight against the virus.

To ensure transparency, the government launched a website that would supposedly allow citizens to monitor the total amount of cash received, who it was from, and how it would be spent. It even set up a commission to distribute the funds.

“Several government bodies are members of the commission. I have no doubts about transparency,” said Amangeldi Isayev, deputy head of the ministry of agriculture and a member of the commission.

But the member of the commission from the NGO sector, Galina Chirkina, disagrees. She said that even members of the commission have not yet received all the details on how the money was spent, but the ministry of health promised to do so at the end of June.

“There is no transparency,” she said. “The government does nothing to provide transparency, nothing.”

Because the money was collected from the public, and is not technically from the government budget, there is also no oversight, she said.

“If it was state money, there is the financial police that checks the intended use. For the [donated money], only we can verify it because the financial police absolutely doesn’t care,” she said.

In practice, the information on the site is so general that it is impossible to understand what the money was actually spent on.

A total of almost $2.2 million has been collected so far, mainly from state employees who donated one day’s salary, as well as individuals, government bodies, and local businesses.

Most of the donations, over $1.8 million, were transferred to a new account in the Ministry of Health and almost all of that money was spent to pay medical workers as compensation for the risk of being infected. But the site does not reveal the names of those who were paid or any justification for their varying amounts of compensation. Moreover, some medical workers have complained that they were underpaid and that compensation was distributed unfairly.

An additional $294,000 was spent on groceries for people who needed assistance during the country’s lockdown, although it is not clear how many people received them. The rest of the money has not yet been allocated.

Citizen donations represent only a small fraction of the total amount the government plans to spend to combat the pandemic, however. It has allocated another $15.7 million for COVID-19 expenses from the state budget and received $250 million from international organizations in both grants and loans. Another $377 million are expected. But there is little information publicly available about how this money has been or will be spent, and the Ministry of Finance has not yet provided all the details to reporters.

Government spokesperson Chyngyz Esengul uulu declined to comment on why the government doesn’t reveal detailed information on spending and suggested the question be referred to the institutions, such as the ministry of health and ministry of finance, that actually spend the money.

The press secretary of the Ministry of Finance, Samat Toyaliyev, called the question “interesting” and explained that he also asked for detailed information but was told that it could not be given because of a lack of resources.

“I asked the employees of the Central Treasury, they said: ‘to figure it out, one employee has to sit for at least two weeks or a month’ … I was told that it is hard to figure it out,” he said.

When he was approached by a journalist again, he dodged the question and proposed that the reporter come and work as the head of the ministry’s press department….occrp.org

Credit- Edin Pasovic

IP Crime

and  its Link to other serioue crimes. Focus on Poly-Criminality.

Europol reports: The aim of this report is to inform law enforcement officials and policy makers about the various ways in which IP crime is linked to other forms of criminal activity. The report is in the form of a case book, presenting case examples where IP crime is linked to other forms of criminality.

IP CRIME AND ITS LINK TO OTHER SERIOUS CRIMES Focus on Poly-Criminality
europol-euipo_polycriminality_report

Cheating with Public Money in a Time of Crisis

Mark Munn of Pennsylvania State University writes:

The jump in federal spending in response to the crisis of the coronavirus pandemic is not a new idea. Nearly 2,500 years ago, the people of ancient Athens had a similar plan – which succeeded in meeting the major threat they faced, but then tore Athenian society apart in a tangle of political recriminations after the crisis had passed.

As an historian of ancient Greece, the most telling parallel I see between current events and that long-ago past is the extreme partisan politics that befell Athens in 406 B.C.

A massive mobilization

In 406 B.C., Athens, a mega-power of the ancient Mediterranean that had built its economy on maritime trade, faccd a crisis. ,Despite recent successes in battle, deep partisan divisions over military leadership had left Athenian forces momentarily vulnerable to attack. Meanwhile, rival city-state Sparta had gained the backing of Persia and was building a navy that could challenge Athens’ control of the sea.

When the Spartans struck, they put the weakened Athenian fleet on the defensive, threatening to crush it and bring Athens to its knees.

A steel engraving of the naval battle of Arginusae in 406 B.C.

In the face of near-certain disaster, the Athenians rallied to respond, accelerating a shipbuilding program already underway by mobilizing all the resources of their Aegean empire. A new tax was passed on personal wealth, and additional money was raised by melting down the golden statues of Victory that had been dedicated on the Acropolis. The resulting coins were spent buying Macedonian pine to make oars to power the triremes, the most advanced naval fighting ships the world had yet seen.

To pull the oars, all able-bodied Athenian men, including knights who normally did not serve in the navy, were called up. Even that was not enough. The Athenians offered citizenship to all resident foreigners and slaves who were willing to serve.

In a little more than a month, the Athenians had assembled a fleet of triremes powerful enough to challenge the Spartan fleet and regain control of the sea.

An enormous battle and victory

In midsummer, 406 B.C., the Athenian and Spartan fleets met in battle in the waters between the island of Lesbos and the coast of Asia Minor. It’s known as the battle of Arginusae, after the small islands off the Asian coast that served as a base for the Athenian fleet; today they are the Turkish islands of Garip and Kalem near the city of Dikili.

Athens won decisively, killing the Spartan commander and destroying nearly half his fleet. The victory was costly: Athens lost 25 out of their 150 triremes, each with a crew of 200 men. A few of the ships were sunk close to shore, and their crews were rescued. But most of the ships lost, carrying more than 4,000 men, were adrift farther out at sea, and went down in a storm that came up in the afternoon of the battle.

Athens was saved. Sparta pleaded for peace, but Athens rejected the terms offered, confident that its navy’s proven strength required no compromises with its foe. The fleet’s commanders, eight of the 10 generals elected annually by the people of Athens, were the heroes of the day. In the elections that followed in the weeks after that battle, six of the eight were reappointed to their commands.

The remaining two generals came home to undergo a mandatory part of public service to Athens: a review of their year in office and an audit of their spending on the public’s behalf.

Rowers in a Greek trireme are carved on a monument dating to close to the time of the battle of Arginusae.

What happened to the money?

As Athens was preparing for battle, all the generals were entrusted with extraordinary amounts of money to finish and outfit ships, to hire and provision crews and more, all at top speed. In the haste to get the job done, not all the money was accounted for.

This was an opening for partisan prosecutors to investigate. One popular politician, a watchdog of the people’s money, filed charges of financial wrongdoing against one of the fleet’s generals.

The investigation revealed deeper evidence of financial abuse and mismanagement involving other generals as well as the original one accused. All the generals who had commanded during the battle were summoned back to Athens so their accounts could be audited. Four of the remaining six returned home; the other two chose not to return, fearing the consequences that awaited them at home.

An attempt to turn the tables

The generals faced prosecution from political opponents, including men who had served as ship captains during the battle and therefore would know about financial malfeasance in the preparations. If convicted, the generals faced having all their property confiscated and their Athenian citizenship revoked – changing them from national heroes to complete outcasts.

Together, the generals decided to defend themselves by attacking: They accused two of their most prominent opponents, popular political rivals who had been officers under their command, of failing to carry out their duties of recovering the shipwrecked crews. It was a serious charge, alleging responsibility for most of the battle’s casualties, that could have rendered the accusers ineligible to prosecute the generals.

The generals’ strategy backfired. Such serious new charges meant the whole matter was referred to the full Athenian assembly, the sovereign decision-making body of 5,000 to 6,000 Athenians. There, the two accused officers defended themselves against charges of dereliction of duty by producing the generals’ own report from after the battle, which made clear the storm – not human negligence – had made the rescues impossible.

That outraged the Athenians, who were angry at the generals for so transparently trying to escape their own accountability that they would accuse their officers of capital crimes. What began as an investigation of financial wrongdoing had become a contest over blame for the loss of life after the battle. The mood of the assembly determined the outcome, which was that all the generals were responsible for failing to save their men after the battle. The surviving records say nothing about the outcome of the charges of financial wrongdoing.

The verdict called for capital punishment: All six generals who had returned to Athens were put to death by hemlock poisoning.

A private grave relief in memory of an Athenian marine who died at sea; the date is uncertain but most likely from a decade or more after the battle of Arginusae. Athens, National Archaeological Museum, no. 752/Mark Munn, CC BY-ND

Everything began with enormous spending in response to an urgent crisis. Actions that seemed necessary at the peak of the emergency ended up as cover for misappropriations of public money.

But once the crisis passed, people saw those actions in a different light. Those who were found to have used the panic of the moment as an opportunity for personal gain ultimately paid the highest price. No doubt part of the reason they were judged so harshly was because so many of their fellow citizens had been forced to sacrifice their lives in a battle that enriched the powerful few.

A Court to Manage International Corruption

Criminals use Bitcoin to Launder Dirty Money

Laws are on the books in many countries of the world.  They are often not enforced.  Here is a proposition for an International Anti-Corruption Court

Mark L. Wolf, a Senior United States District Judge and Chair of Integrity Initiatives International (“III”), writes: Integrity Initiatives International (“III” was formed in 2016 to focus on strengthening the enforcement of criminal laws to combat “grand corruption” — the abuse of public office for private gain by a nation’s leaders, who are coming to be known as “kleptocrats.”

Grand corruption is endemic in many countries and has devastating consequences. It does not flourish because of a lack of laws. 186 nations are parties to the United Nations Convention Against Corruption (“UNCAC”). They all have criminal laws prohibiting extortion, bribery, and money laundering. They also have international obligations to enforce those laws against their nations’ leaders. However, kleptocrats enjoy impunity in their own countries because they control the administration of justice, including the courts.

In 2016, leaders from more than forty countries met in London for the Anti-Corruption Summit. They endorsed a Global Declaration Against Corruption, committing each represented nation to the proposition that “the corrupt should be pursued and punished.” The Declaration emphasized the “centrality” of the UNCAC. Implicitly recognizing that existing institutions and efforts have not been adequate, the participating governments committed themselves to “exploring innovative solutions” to combat corruption. An International Anti-Corruption Court (“IACC”) would be an invaluable innovation.

The IACC is an evolving concept. In III’s current conception, it would employ: expert investigators, such as those at the International Anti-Corruption Coordination Centre, whose head is Rupert Broad.

The IACC would have jurisdiction over corrupt leaders and those who conspire with them, including those who pay them bribes or assist in laundering their illicit assets. The IACC would, therefore, provide for the prosecution of public officials who demand or accept bribes, which is not permitted under the United States Foreign Corrupt Practices Act or its counterparts in other countries.

The IACC would not necessarily require the enactment of any new criminal statutes. It could enforce each nation’s domestic anti-corruption laws that are required by the UNCAC. Alternatively, a uniform statute adopted by members of the IACC could be enacted.

The IACC could be made part of the existing International Criminal Court (“ICC”). However, for principled and pragmatic reasons, III believes a separate court would be preferable.

Like the ICC, the IACC would operate on the principle of complementarity. This means that only leaders of countries that are unwilling or unable to prosecute them for corruption would be subject to prosecution in the IACC.

The principle of complementarity would give countries an incentive to strengthen their national institutions and efforts to combat corruption, which will remain of primary importance. For example, the threat of prosecution in the ICC prompted all parties to support strengthening the sanctions in the agreement to end Colombia’s lengthy civil war.

An IACC would not be too costly. The IACC would impose fines that could be used to pay for its operations, as fines partially fund the United States courts.

Sentences of kleptocrats would also include orders of restitution to the countries they robbed. Therefore, prosecution could be a much more efficient and effective means of recovering assets than civil suits, which often last for decades and are frequently inconclusive.

An IACC is urgently needed. As the then United States High Commissioner for Human Rights said in 2013: “Corruption kills …. The money stolen through corruption every year is enough to feed the world’s hungry 80 times over.” The current refugee crises are largely caused by migrants fleeing corrupt failed states. Climate change is exacerbated by kleptocrats who profit from illegal destruction of forests. It is foreseeable that much of the money the international community is contributing to combat climate change in developing countries will be lost to corruption if the impunity of their leaders is not ended.

Finally, the IACC is achievable. The IACC has the support of: countries including Colombia and Peru, and the strong interest of others such as Nigeria and Malaysia, as we have heard at this conference; NGOs, including Global Witness, Human Rights Watch, and many chapters of Transparency International; and courageous young people, such as the leaders of the 2014 Ukrainian Revolution of Dignity.

The proposal to create the IACC will be addressed and adopted by the United Nations at its 2021 Special Session on Corruption.

Criminals Profit From The COVID-19 Pandemic

New Europol report on latest developments of COVID-19 on the criminal landscape in the EU

During this unprecedented crisis, governments across Europe are intensifying their efforts to combat the global spread of the coronavirus by enacting various measures to support public health systems, safeguard the economy and to ensure public order and safety.

A number of these measures have a significant impact on the serious and organised crime landscape. Criminals have been quick to seize opportunities to exploit the crisis by adapting their modi operandi or engaging in new criminal activities. Factors that prompt changes in crime and terrorism include:

  • High demand for certain goods, protective gear and pharmaceutical products;
  • Decreased mobility and flow of people across and into the EU;
  • Citizens remain at home and are increasingly teleworking, relying on digital solutions;
  • Limitations to public life will make some criminal activities less visible and displace them to home or online settings;
  • Increased anxiety and fear that may create vulnerability to exploitation;
  • Decreased supply of certain illicit goods in the EU.

Building upon information provided by EU Member States and in-house expertise, Europol has published today a situational report analysing the current developments which fall into four main crime areas:

CYBERCRIME

The number of cyberattacks against organisations and individuals is significant and is expected to increase. Criminals have used the COVID-19 crisis to carry out social engineering attacks themed around the pandemic to distribute various malware packages. 

Cybercriminals are also likely to seek to exploit an increasing number of attack vectors as a greater number of employers institute telework and allow connections to their organisations’ systems.

Example: The Czech Republic reported a cyberattack on Brno University Hospital which forced the hospital to shut down its entire IT network, postpone urgent surgical interventions and re-route new acute patients to a nearby hospital.

FRAUD

Fraudsters have been very quick to adapt well-known fraud schemes to capitalise on the anxieties and fears of victims throughout the crisis. These include various types of adapted versions of telephone fraud schemes, supply scams and decontamination scams. A large number of new or adapted fraud schemes can be expected to emerge over the coming weeks are fraudsters will attempt to capitalise further on the anxieties of people across Europe. 

Example: An investigation supported by Europol focuses on the transfer of €6.6 million by a company to a company in Singapore in order to purchase alcohol gels and FFP3/2 masks. The goods were never received.

COUNTERFEIT AND SUBSTANDARD GOODS

The sale of counterfeit healthcare and sanitary products as well as personal protective equipment and counterfeit pharmaceutical products has increased manifold since the outbreak of the crisis. There is a risk that counterfeiters will use shortages in the supply of some goods to increasingly provide counterfeit alternatives both on- and offline.

Example: Between 3-10 March 2020, over 34 000 counterfeit surgical masks were seized by law enforcement authorities worldwide as part of Operation PANGEA supported by Europol. 

ORGANISED PROPERTY CRIME

Various types of schemes involving thefts \have been adapted by criminals to exploit the current situation. This includes the well-known scams involving the impersonation of representatives of public authorities. Commercial premises and medical facilities are expected to be increasingly targeted for organised burglaries.

Despite the introduction of further quarantine measures throughout Europe, the crime threat remains dynamic and new or adapted types of criminal activities will continue to emerge during the crisis and in its aftermath.

Example: Multiple EU Member States have reported on a similar modus operandi for theft. The perpetrators gain access to private homes by impersonating medical staff providing information material or hygiene products or conducting a “Corona test”.

Executive Director Catherine De Bolle said: “While many people are committed to fighting this crisis and helping victims, there are also criminals  who have been quick to seize the opportunities to exploit the crisis.  This is unacceptable: such criminal activities during a public health crisis are particularly threatening and can carry real risks to human lives.  That is why it is relevant more than ever to reinforce the fight against crime. Europol and its law enforcement partners are working closely together to ensure the health and safety of all citizens”.

European Commissioner for Home Affairs Ylva Johansson said: “I welcome this new Europol report on latest developments of COVID-19 on the criminal landscape in the EU. The EU and Member States are stepping up efforts to keep people safe: National authorities and EU Agencies like Europol and ENISA are providing valuable input into how we can tackle this challenge together. I am determined to ensure that the Commission does all in its power to support law enforcement in the face of this new threat.”
Pandemic Profiteering How Criminals Exploit The Covid 19 Crisis
@Europol

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