The DATACROS project, funded by the European Union Internal Security Fund – Police, has developed a prototype tool to detect anomalies in firms’ ownership structure that can flag high risks of collusion, corruption and money laundering within the European single market.
The need for this study arose from the extensive body of evidence suggesting that legitimate companies play a crucial role in facilitating corruption schemes and money laundering of illicit proceeds, since complex and opaque corporate ownership schemes are widely used to conceal illicit profits, and their use is on the increase.
The technological tools currently available on the market help financial investigations involving legitimate companies. However, they have primarily been designed for banks, financial institutions and large corporates (e.g. for anti-money laundering and compliance purposes).
On the opposite, there is a dearth of tools specifically designed for public authorities (e.g., Law Enforcement Agencies, Financial Intelligence Units, Anti-Corruption Agencies, Tax Authorities).
To address this problem and fill these gaps, Transcrime has:
- Conducted an aggregate analysis of corporate ownership anomalies across 29 European countries (EU27+ Switzerland and UK);
- Developed a prototype tool specifically designed for public authorities, for conducting risk assessment of legitimate companies, being capable of detecting anomalies in firms’ ownership structure that are indicative of a high risk of collusion, corruption and money laundering.