Organised crime does pay during downturn

The financial crisis has caused a surge in organised crime across Europe - and it's preventing economies from recovering, says Europol

by Emma Haslett
Last Updated: 25 Jun 2013
It turns out rogue traders aren’t the only ones who have profited from the economic crisis: according to research by Europol (the European version of Interpol), organised crime gangs have done rather nicely too.

Apparently there are now 3,600 criminal organisations operating in Europe, reports the FT this morning. But this is no Al Pacino movie: gangs are profiting from counterfeit machine parts, pharmaceuticals and food. A particular favourite is detergent (sounds like they need to clean up their acts, etc etc...).

Cyber criminals are also a problem: gangs across Eastern Europe have become more sophisticated about who and how they attack.

Even governments aren't immune. One of the gangs' favourite wheezes is to make fake VAT claims, says the research. The Treasury's decision to raise the VAT rate from 17.5% to 20% in 2011 made the UK more vulnerable, according to Europol, because any claim is more profitable than it would have been.

So although counterfeit washing powder doesn’t sound like it’s going to affect world finances, Robin Wainwright, Europol’s director, hints that the surge in organised crime could be hampering governments’ abilities to recover from the downturn.

"[Organised crime] is having a particularly negative effect on government’s attempts to recover from the economic recession by draining away these resources in taxpayer’s revenue," he explains.  

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