Black Market Criminals Are Taking Advantage Of Europe's Financial Crisis

  on
European Union
Euro zone retail sales back in decline in June, France a bright spot. Pictured, European Union building.

Europol, the European Union's law enforcement agency, is warning that European criminal gangs have soared in number since the financial crisis swept across Europe in 2008, profiting on anything from household food stuffs to fake aircraft engine parts.

The head of the agency, Rob Wainwright, said this week that Europe’s black market has nearly doubled in size to a value of about $2.6 billion

According to a Financial Times report, the groups have profited from increased demand for cheap goods and are cashing in on EU member states' attempts at boosting tax revenues. The report went on to highlight the problem of cyber criminals from Ukraine and Russia that are carrying out attacks on financial services groups. 

“[Organized criminals] are operating in multiple criminal sectors, in multiple jurisdictions, they’re highly international in their nature,” Wainwright said. “Some have 60 or more nationalities among their membership. So these are themselves multinational companies."

As the recession took hold in Europe, the usual counterfeit goods like designer handbags and expensive champagnes stepped aside for a new trade in pharmaceuticals and machine parts. Figures from 2011 show that health and safety hazards created from substandard products, such as food and medicines accounted for 28.6 percent of all goods seized, up from 14.5 percent in 2010.

Interpol, an international police organization supported by 190 member nations, has also identified an increased willingness by companies to use illegal labor, which has increased people-trafficking networks and led to breaches of minimum wage laws.

Attempts by governments to recover value added tax (VAT) has even added to the problem with a huge increase in fraudulent VAT claims depriving a desperate Europe of up to $130 billion each year

“[Organized crime] is having a particularly negative effect on government’s attempts to recover from economic recession by draining away these resources in taxpayer’s  revenue,” Wainwirght said. 

Join the Discussion