Assessing the effectiveness of the EU AML regime: Detecting and investigating cases of trafficking in human beings

Abstract

The effectiveness of anti-money-laundering (AML) mechanisms within the European Union (EU), in the context of the detection and investigation of trafficking in human beings (THB), is the focal point of this article. The article begins by examining the EU’s emphasis on proactive financial investigations in cases of THB and then moves on to examine EU AML framework. Special attention is paid to the 4th AML Directive (Directive (EU) 2015/849), the Second Transfer of Funds Regulation (Regulation (EU) 2015/847), the Second Payment Services Directive (Directive (EU) 2015/2366) and the Cash Control Regulation (Regulation (EC) 1889/2005). The modus operandi of traffickers operating within the EU when laundering the proceeds of their crimes is then studied, with the view of assessing the effectiveness of the framework. The analysis shows that the EU AML framework fails to capture some common modes of money laundering (ML) in THB cases and in addition, it is less effective when the criminal proceeds are laundered within the EU. The analysis furthermore shows that the EU AML regime is largely dependent on the ML risk assessment of private actors, many who do not comply with their AML obligations and are widely insufficiently monitored within the Member States (MS). The article concludes that the limitations of the EU AML framework and it’s enforcement in the MS have resulted in difficulties both in detecting ML associated with THB and in gathering evidence during THB investigations.