Countering the use of leading sectors of digital economy by organized crime: European experience

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National Security and Defense Council of Ukraine

Countering the use of leading sectors of digital economy by organized crime: European experience

Hrebeniuk M. - Ph.D in Law, Associate Professor, Head of the Interagency

Scientific and Research Centre on Problems of Combating Organized Crime under

Cherniak A. - Doctor of Law, Chief Researcher Fellow of the Interagency

Scientific and Research Centre on Problems of Combating Organized Crime under

Annotation

The digital economy on a global scale is developing at a fast pace and acts as an accelerator of innovation, competitiveness and economic growth in the world. Most of the advanced countries of the world, such as the USA, Canada, Japan, and Germany are developing the digital economy and introducing digital technologies in their societies as a strategic goal, which in the future should be the driving force of innovation development, including for the Ukrainian economy. The purpose of the article is to highlight the European experience of preventing and countering organized crime in the digital economy, carrying out an analysis of the novels of modern legislation. The theoretical basis and scientific issues of the chosen scientific direction were considered in the fundamental works of such scholars as: V. M. Butuzov, M. O. Budakov, S. V. Demediuk, V. V. Markov, A. I. Marushchak. Law enforcement agencies should have the tools, methods and experience to combat the criminal misuse of encryption and anonymity methods. To prevent criminals from using encryption and anonymization methods, law enforcement agencies should retrain personnel, and not only employees of units engaged in combating cybercrime, and also have at their disposal the necessary software and hardware systems. In addition, law enforcement officers should be provided with the necessary software tools that allow the use of cyber tools to investigate not only particularly complex, but also any crimes in digital format. Conclusions. Currently, the main task for which the digital economy is aimed is the introduction of digital technologies in industrial production, education, medicine and other fields. It's common knowledge that the sectors of the economy that use digital technology are developing faster and better. Spheres of human activity, including education, medicine, transport, agriculture, are being modernized thanks to digital technologies, becoming much more efficient and creating new value and quality. Indeed, the continuous development of digital technologies is also one of the reasons for the increase in the scale of the shadow economy, since along with the development of modern technologies, new opportunities for the growth of «digital crime» are emerging. Assessing the impact of the «digital economy» on the national and world economy, as well as inevitably on the entire social sphere, is very important, given the growing problems of the spread of transnational crime in the virtual space, which is also being modernized on a permanent basis. The basis of the development of the digital economy is the blockchain technology, which finds its application in various fields. Describing the state of organized crime in the economic sphere, it is advisable to allocate it in a separate category for the study of crime in the sphere of the «digital economy». Evaluation of the impact of the digital economy on the national and world economy allows us to state that the continuous modernization of crime remains relevant, which is constantly being improved as part of the active continuous electronicization and digitalization of society. Another factor that should be considered when countering crimes in the «digital economy» is the enormous victimization rate.

Keywords: counteraction; organized crime; digital economy; European experience; innovations; law enforcement agencies; victimization.

Аннотация

Гребенюк М. В. - кандидат юридичних наук, доцент, керівник Міжвідомчого науково-дослідного центру з проблем боротьби з організованою злочинністю при Раді національної безпеки і оборони України, Київ;

Черняк А. М. - доктор юридичних наук, головний науковий співробітник Міжвідомчого науково- дослідного центру з проблем боротьби з організованою злочинністю при Раді національної безпеки і оборони України, м. Київ;

Європейський досвід протидії використанню організованою злочинністю провідних галузей цифрової економіки

Цифрова економіка в глобальних масштабах стрімко розвивається та є акселератором інновацій, конкурентоздатності й економічного зростання у світі. Більшість передових країн світу, таких як США, Канада, Японія, Німеччина, розвивають цифрову економіку й упроваджують цифрові технології у своїх суспільствах як стратегічну мету, що в перспективі має стати рушійною силою інноваційного розвитку, зокрема й для української економіки. Метою статті є висвітлення європейського досвіду запобігання та протидії організованій злочинності у сфері цифрової економіки на підставі аналізу новел сучасного законодавства. Теоретичний базис і наукову проблематику обраного наукового напряму розглянуто у фундаментальних працях таких науковців, як В. М. Бутузов, М. О. Будаков, С. В. Демедюк, В. В. Марков, А. І. Марущак. Правоохоронні органи повинні володіти інструментами, методами й досвідом для протидії злочинним зловживанням методами шифрування й анонімізації. Для запобігання використанню злочинцями методів шифрування й анонімізації правоохоронні органи мають здійснити перепідготовку кадрів, причому не лише працівників тих підрозділів, що здійснюють боротьбу з кіберзлочинністю, а також мати в розпорядженні необхідні програмно-апаратні комплекси. Висновки. Основне завдання, на виконання якого спрямована цифрова економіка, - запровадження цифрових технологій у промислове виробництво, освіту, медицину й інші сфери. Сектори економіки, що використовують цифрові технології, розвиваються швидше та якісніше. Сфери життєдіяльності, зокрема освіта, медицина, транспорт, сільське господарство, що модернізуються завдяки цифровим технологіям, функціонують значно ефективніше та набувають нової цінності. Доцільно виокремити злочинність як категорію для вивчення саме у сфері цифрової економіки. Оцінка впливу цифрової економіки на національну та світову економіку засвідчує актуальність проблеми суцільної модернізації злочинності, яка постійно вдосконалюється в умовах активної електронізації та цифровізації суспільства. Ще один фактор, який слід ураховувати в процесі протидії злочинам у сфері «цифрової економіки», - це колосальна віктимність.

Ключові слова: протидія; організована злочинність; цифрова економіка; європейський досвід; інновація; правоохоронні органи; віктимність.

Introduction

An important component of the formation of an information society is the use of the capabilities of modern ICT to create information, new modern knowledge, goods and electronic services, effective information exchange, while promoting the stable development of the country. ICT application in the conditions of intensive development of market relations remains one of the important elements of good governance. Over the past decade considerable attention has been paid in empirical economics to testing for the existence of relationships in levels between variables. In the main, this analysis has been based on the use of integration techniques.

Financial stability within the framework of the global financial crisis has become a common topic for researchers and practitioners (Stoica & Ihnatov, 2016). The development of the digital economy in Ukraine consists in creating market incentives, shaping the needs for using digital technologies, products and services among Ukrainian industrial sectors, spheres of life, business and society for their efficiency, competitiveness and national development, growth of high-tech production and wellbeing of the population. That is, digital transformation is a process that must be one of the priorities for modern development.

Selected for the study of scientific issues, from different points of view studied by many scholars. Special attention is paid to the chosen issues in the legislation of the leading European countries. The study of the state of scientific development of the problems of cooperation and interaction of the competent authorities of different countries in counteracting the use of organized crime by leading sectors of the digital economy was highlighted by domestic scientists.

Selected for the study of scientific issues from different points of view has been studied by many scientists. Certain aspects of this scientific direction were considered in the fundamental works of such scientists as: V. M. Butuzov, M. O. Budakov, S. V. Demediuk, V. V. Markov, A. I. Marushchak, Yu. Ye. Maksymenko, O. V. Orlov, S. M. Rohozin, V. S. Tsymbaliuk etc.

The purpose

The purpose of the article is to highlight the European experience of preventing and countering organized crime in the digital economy, carrying out an analysis of the novels of modern legislation.

Objectives of the study

A generalization of the existing research results on selected topics and its coverage, taking into account the best practices of the latest European legislation on combating the use of organized crime by the leading sectors of the digital economy, which simultaneously indicates the relevance and timeliness of the scientific research carried out by the authors of the scientific paper.

Presentation of the main material

Commonly used both in the world and in the European Union (EU) countries, the definition of «digital economy» is interpreted as electronic commerce, carried out with the help of modern information and communication technologies. In particular, the Bank of England looks at the management models of the monetary system from the position of the dynamic blockchain development. In Estonia, blockchain is also being actively introduced into the banking system, and besides - into the health care system and state registration of business activities. Australia Post intends to use the blockchain to store the digital identification data of its customers. In Switzerland and the United Kingdom, a favorable environment has been created for the development of the latest technologies «FinTech» using «regulatory sandboxes» (modes of limited use of products in the absence of appropriate financial legislation).

In 2018, a revolutionary idea of creating a common digital market was documented in the European Union: 22 countries signed a joint declaration on the creation of a European blockchain partnership ("YeS pratsiuie"). This European project involves the exchange of information and technology between states and the private sector. This declaration is based on three main principles: unhindered access to digital products and services; creating an adequate environment for the dynamic development of network and digital technologies; taking advantage of the digital market as an important potential for accelerating economic growth.

Information and telecommunication networks can also be used to commit economic crimes related to the acquisition and sale of certain items, including counterfeit money, securities, bank cards, as well as data from existing bank cards. However, in this case, the use of the Internet or other information and telecommunication networks is one of the possible methods of committing relevant crimes. For example, the data of valid bank payment cards allows you to make purchases in online stores without using a special PIN code. On the Internet, for sale are actively offered bilateral images of bank cards, as well as their PIN codes, in the presence of which you can make a fake counterpart of such cards and use it to pay for goods in regular stores ("European Cybercrime").

Also through the Internet resources skimmers are sold and bought (devices installed on ATMs and allow you to read the data of a bank card that is used). Without a causal connection with a specific crime, many of these actions (for example, the provision of data from a valid bank card or the sale of a skimmer) are not criminalized, which is a gap in the law. Without a causal relationship with a specific crime, many of these actions (for example, the provision of data from a valid bank card or the sale of a skimmer) are not criminalized, which is a gap in the law. Organized cybercrime can be associated not only with information security problems, but also with threats to state security, the military-industrial and industrial complexes, and life-support infrastructure. With the active use of Internet services, electronic gadgets and modern means of payment, no one can feel safe. For example, the receipt of messages containing various kinds of fraudulent methods of defrauding information has become an integral part of everyday life today, while the overall assessment of the public danger of such acts rarely goes beyond the limits of petty hooliganism. That is, the practical achievements and achievements of the digital economy are actively used by transnational organized criminal groups in order to obtain superprofits by committing economic crimes in the territory of one or several states using cyberspace and its capabilities.

As stated in the Europol report «Internet Organised Crime Threat Assessment» (IOCTA) (2018) (Liashenko, 2018), ensuring the rule of law in cyberspace requires intensifying work on the identification and localization of individual criminals and criminal groups that are integral elements of the modern European criminal subculture. The IOCTA Strategic Report provides key recommendations to law enforcement agencies, politicians and regulators so that they can effectively and consistently respond to and resist cybercrime. It is emphasized that the important components for the successful struggle of law enforcement agencies against cybercrime are such components as the allocation of sufficient resources for the study of malicious software and new business models of cybercrime, as well as conducting stress tests and security audits of state bodies and the public. Law enforcement agencies should have the tools, methods and experience to combat the criminal misuse of encryption and anonymity methods. To prevent criminals from using encryption and anonymization methods, law enforcement agencies should retrain personnel, and not only employees of units engaged in combating cybercrime, and also have at their disposal the necessary software and hardware systems. In addition, law enforcement officers should be provided with the necessary software tools that allow the use of cyber tools to investigate not only particularly complex, but also any crimes in digital format.

An important place is occupied by the prevention of organized crime in the field of advanced technologies. Currently, preventive cybercrime

Scientific

The vast majority of criminal instruments and services can be used in a wide variety of areas of criminal activity. Accordingly, exposing and terminating the activities of criminal networks involved in the manufacture of software tools and provide services for their use in the interests of other criminal groups will allow countering cybercrime. It is no coincidence that while committing crimes in the digital economy, the key factor is the enrichment motive. Also in the conditions of crisis, there are frequent cases when dismissed employees of IT companies illegally encroach on information resources of an enterprise and transfer commercial secrets to competitors not so much from mercenary motives as for revenge, while material gain is of secondary importance. In the digital economy, criminal groups primarily resort to such forms of criminal activity: the use of phishing sites; falsification and forgery of electronic documents; malware distribution. Thanks to this illegal activity, one can gain access to the management of bank accounts of legal entities with the aim of gradcampaigns are aimed mainly at citizens and businesses, that is, potential victims of cybercrime. In addition, it is also necessary to intensify preventive work with potential cybercriminals, primarily teenagers and young people, who possess the necessary software skills, as well as IT workers. The focus of preventive work should be on explaining the consequences of illegal activities for the criminals themselves. It should be noted that national preventive campaigns should be coordinated with international and public organizations. As part of preventive activities, special attention should be paid to mobile gadgets and modern electronic devices as the sources of greatest danger to their owners and the penetration of criminals into private and corporate networks. Law enforcement agencies, together with non-profit organizations and the private sector, should be actively involved in awareness-raising activities among the public and the public (Kiberbezpeka, 2016).