CEPOL Research & Science Conference 2022 MRU, Vilnius

The term ‘human factors’ covers extra-legal, social, psychological, institutional and organisational aspects affecting the behaviour of citizens, including the fight against financial crime by competent authorities. In addition to the complexities imposed by different legal approaches across EU Member States and the limited resources available for countering financial crime, managing and converting big data into meaningful law enforcement action have also become major challenges for LEAs. As the recent Pandora Paper demonstrate, it is not only the volume and type of data which can overwhelm the authorities but also the sheer number of people, companies, business operations and assets that are scattered across the globe. This is where AI informed data analytics can be of use in analysing the vast amount of structured and unstructured data as well as connecting the dots between entities involved in a given scenario. Based on real case studies, this paper presents the potential benefits as well as challenges in adopting AI solutions to financial crime investigation models. In doing so, it offers a critical overview of the implications of some of the salient aspects of natural language process, entity extraction, correlation analysis, visualization & crowd knowledge. The paper also presents a some of the core legal and ethical principles that shall inform the development AND use of AI in law enforcement practices in Europe.

As the rules designed to counter money laundering constantly change, criminals find new methods and platforms to launder their “dirty” money. For example, such new platforms include the art market and the use of crypto currencies both of which have recently been added to the list of sectors susceptible to facilitate money laundering. Apart from the traditional art market, criminals may use digital art in order to facilitate their activities. The rise of the digital art market with the expansion of Non-Fungible Tokens (NFTs) is a new area of concern for law enforcement agencies (LEAs). Anonymity and price volatility of NFTs create a unique environment for criminals. The complex nature and uncertain legal status of NFTs further complicate the counter measures one can take. The purpose of this paper is to present NFTs, analyse their relation to money laundering and art, scrutinise their legal status in the EU and provide potential regulatory solutions and recommendations.
In addition, the paper will examine the difficulties faced by LEAs in the training and education of enforcement officials when such novel technological advancements make their appearance. The fast techonological advancements are, often, difficult to be followed by officials and academics. As training and education are a significant part of enforcement officials, the fast technological advancements create a gap that may have negative results in enforcement. As a result, multidisciplinary research from academics (both form applied sciences and social sciences) is necessary to close this knowledge gap. NFTs are such an example of quick expansion of a new technological phenomenon that highlight the urgent need for training and education needs of LEAs via public-private partnership models.