Economic crime, also known as financial crime, refers to illegal acts committed by an individual or a group of individuals to obtain a financial or professional advantage. The principal motive in such crimes is economic gain.
Economic crime covers a wide range of offences. The different arrangements of organised economic crime on which there is consensus, in terms of definition and incidence are:
One mode of economic crime on which there is unanimity as to its existence, but not quite as to its definition or magnitude, is money laundering. It appears that money laundering, which is the process of by which illicit funds are managed and disposed by virtue of even legitimate and illegitimate means, has come to be regarded as one of the serious criminal activities.
Although the economic crime itself may be nonviolent, the end result could be violent. In other words, the nonviolent action is the means to an end. Thus, the precise way in which the impact will be gaged depends on how the unlawful activity relates to the lawful activity. In fact, the relationship between the latter two activities may be regarded as predatory. At the other end of the emerging spectrum is the perception that proceeds from illicit activity sponsor unfair competition for lawful business.
Moreover, criminal organizations dealing only in illicit goods and services are no great threat to the nation. The danger of organised crime arises because the vast profits acquired from the sale of illicit goods and services are being then invested in licit enterprises, in both the business and the government sphere. In other words, the real harm done by organised crime does not stem solely from selling inherently illegal goods and services, but also from the way the profits are subsequently morphed.
Money laundering, organised crime and economic crime are often integrally linked and there are also significant social cost and resources placed to curb these crimes. Criminal organisations weaken society since their profits are used to infiltrate or acquire control legitimate businesses, bribing individuals and government officials in the process. Over time, this can seriously weaken the moral and ethical backbone and standards of society, damaging the principles underlying democracy. Also, one cannot rule out the possibility of criminals installing puppet governments by deploying the proceeds of crime to rig and win elections.
Thus, the above substantially forms the bedrock of economic policy-based responses to organised crime, which seek to draw illegally acquired funds into the public financial system, through taxation and asset forfeiture. Measures inspired by these objectives aim to deprive criminals of the competitive advantage that they would otherwise derive from the proceeds.
In Malta, the relevant law enforcement agency investigating economic crime would be primarily the Economic Crimes Unit within the Malta Police Force, formerly known as the Fraud Squad. Within the same Unit there also exists two other squads which undertake similar duties, namely the Money Laundering and the National Counterfeit Office.
The Economic Crimes Unit is responsible to investigate crimes such as fraud, misappropriation, forgery, embezzlement, bounced and stolen/forged cheques, plastic card fraud, foreign counterfeit currency, usury, intellectual property rights infringements, VAT fraud and misappropriation cases, computer and internet fraud, extortion and money laundering amongst other related crimes.
Moreover, this Unit carries out sporadic raids and inspections to curb intellectual property rights particularly in open markets and retail outlets, be it audio/visual, clothing, tools, electrical appliances, cigarettes or computer software.
Similarly, the function of the National Counterfeit Office is to focus on counterfeit currency – both local and foreign, with the main tasks being the liaison with the Central Bank of Malta in matters related to such crime, to investigate crimes related to the print, distribution, and use of counterfeit notes and coins on a national level and to serve as a common platform for the dissemination of information with foreign police.
On a national plane, the principal legislation regulating economic crime is the Criminal Code, Chapter 9 of the Laws of Malta which sanctions those proceeds derived from or obtained, directly or indirectly, through the commission of the said criminal offence. Nevertheless, there are other laws which govern the same crime, most notably the Prevention of Money Laundering Act, Chapter 373 of the Laws of Malta, under which the Financial Intelligence Analysis Unit (FIAU) is established.
