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

One of the main tasks of the EU law enforcement agencies is to fight against providers of criminal services and specialized tools that are the basis of software, hardware and personnel structures of European cybercrime. These types of specialized tools include: malicious software, including password extortionists, spyware, and banking trojans, as well as, respectively, their developers, suppliers and customers, providers, organizers and performers of DDoS attacks as services; manufacturers of botnets, especially their modifications, used to distribute other malicious programs; carrying out DDoS attacks, as well as criminal manipulations by distorting and “noisy” information space.

Novelty ually stealing money. Also in this category of crimes can be attributed to the theft of authentication data (digital signature), which allows you to get unhindered access to the accounts of electronic payment system agents, transfer financial resources from them to personal accounts of subscriber phone numbers, and then transfer them to cash.

Analysis and study of the scientific and analytical work of European criminological researchers makes it possible to state the dominance of the position according to which in modern conditions the sign of unity of organized groups is lost during crimes in the digital economy, and the traditional form of criminal interaction is replacing the traditional macro criminal networks, which are attended by visitors to forums, chat rooms, closed online communities. After all, to enter this segment you need to earn trust, have a certain status and reputation. It is no coincidence that the electronic environment greatly complicates the identification of the offender and contributes to the emergence of a new characteristic feature of crime in the digital economy - many episodes of criminal activity.

It should be noted that, in contrast to payments using traditional bank payment cards and Internet banking systems, payments by electronic means are often not personalized, which is an important criminological factor. The fundamental question is under what conditions these economic relations can be transformed into criminal law. Firstly, the risk of becoming a victim of fraudsters who use anonymous proxy servers and twin sites to deceive and become inaccessible for identification is large enough. Secondly, given the transnational nature of electronic information exchange and a significant number of intermediaries between the source and addressee of information, the procedure for establishing the legal status and virtues of all participants in this process is complicated, and therefore the problem of criminal liability of Internet providers becomes relevant.

Considering the above, China introduced the radical methods in this format. Since February 2019, the government of the PRC cyberspace has obliged all owners of blockchain services to collect user identification data and freely transfer them to law enforcement agencies. The policy of the PRC in this direction provides for total control by the state. In 2018, China banned Initial coin offering (ICO), crypto exchanges, and a blockchain conference on related topics. Against this background, it is the state that actively invests in large blockchain projects. A support fund of blockchain projects has recently been established in the amount of 72 billion US dollars, which will operate in major cities of China.

In Switzerland, Canton Zug became a platform with a developed infrastructure for the adaptation and implementation of blockchain projects. This region even got the name «Crypto Valley», where banking institutions operating both with Fiat and cryptocurrencies are represented, there is a university for preparing blockchain specialists of HSLU-I, the headquarters of leading blockchain startups such as: «Ethereum», «Monetas», «Lykke». From 2014, pilot projects began to appear in the canton of Zug, which used the blockchain platform. Campaigns were launched to conduct referendums, electronic identification of citizens, accepting transfers of citizens for housing and utilities services, and transport.

The world community is closely monitoring the situation and trying to influence it. Thus, during 2016-2019, quite a few world forums took place, during which experts identified the 10 most acute international problems and risks for the world economy that are spread by organized crime, in particular, these are: financial crimes, including illegal taxation, financial security and the exchange of financial resources, investments and assets; production, storage, transportation and sale of counterfeit products; theft and unlawful use of intellectual property; illicit trafficking in weapons and means of destruction; illegal removal, storage, transportation and use of human organs for transplantation; online organized pedophilia and child pornography; illegal gambling and lottery businesses, including the creation of virtual casinos, illegal computer games that provide for unlicensed monetization etc.

The phenomenon of «corruption by organised crime» is the subject of increased attention from policymakers in the United Kingdom of Great Britain and Northern Ireland. This focus is notable, given the limited political and academic consideration of the scope and meaning of this intersecting term. Both «organised crime» and «corruption» are difficult notions to pin down, definitionally and empirically, and such complexity is compounded by their conjunction (Campbell, 2016).

For example, since in most countries of the European Union, as well as in the United States, cryptocurrency is not considered as a means of payment, but as a commodity, it is de facto legalized. The vast majority of participants in these and similar platforms are good citizens and has nothing to do with crime. However, the lack of detailed regulations and law enforcement practices makes such a business a «gray» zone, where the crime goes. Europol experts note that organized criminal groups that operate in the eurozone differ in their organizational structure, functionality and composition. In the EU, the phenomenon of activation of small high-tech criminal groups that operate in criminal online commodity markets is recorded. As a rule, in such groups professional criminals are a small number of individuals, and the main contingent consists of employees of IT companies, banking institutions, financial companies etc.

During the conference on the global use of cryptocurrency, held in January 2017 in Qatar, for the first time the question was raised about small high-tech groups, which in the United States are called «organizations-werewolves», and French law enforcement officers called them - «Mobius crimi- nals». Some people mistakenly believe that such groups relate exclusively to cybercrime, because the spectrum of their criminal activities is quite wide. If earlier criminals used military or civilian technologies, adapting them for their needs, then in reality criminal groups themselves develop technologies, use them as a separate side business and realize through their interests in civil and military spheres. Modern criminals quickly adapt to technical innovations and create and implement technologies themselves. Adaptation options can be quite diverse.

Europol's greatest concern is the emergence of so-called «Mobius» criminal groups in the EU. Typical features of these groups are: small number, legal nature of activity, high level of their competence and professionalism. Such groups are created by the order of large business structures outside the EU. The development of information and other high technologies affects the constant increase in the destructive potential of such small criminal groups. Over the past five years, small criminal groups have been able to harm not at the level of an individual business or a local community, but at the scale of megacities and large corporations.

At the end of 2018, realizing the scale of the spread of crime in cyberspace and having concern about the threatening trends of its spread, the UN General Assembly approved the resolution «On counteracting the use of information and communication technologies for criminal purposes». The European Union, in turn, has strengthened responsibility for crimes related to the blockchain and cryptocurrency. The reason for this decision was the massive proliferation of malicious programs that lure money from ordinary EU citizens.

Technological innovations are important factors affecting the activities, structure and methods of organized «digital» crime in Europe. European organized crime groups demonstrate a high degree of fitness and creativity in the use of new technologies. The Internet and its growing connectivity to all components of the physical environment are increasingly affecting the forms of serious organized crime. The «Internet things» sphere is also constantly expanding. The ability to connect all types of devices is becoming a reality for households and enterprises in the EU countries. Unlike traditional computers and tablets, smart phones and things connected to the Internet remain extremely vulnerable. In million cities in the EU, up to 90 % of the public Wi-Fi nodes are not protected by encryption. Accordingly, cybercriminals can connect to any of the millions of subscribers who use these nodes daily. According to Europol experts, the greatest threat in the field of organized crime in the coming years will be not artificial intelligence or big data, but transformations of extremely vulnerable to external malicious intrusion of smartphones, e-wallets and access points to numerous services and programs that require identification of personal data (Skuratovska, 2016). The analysis of the presented materials allows to determine the ways of countering organized crime in the digital economy, which are: victimological prophylaxis; technical anti-virus law enforcement support, which includes regular updates of licensed software, forensic technology; attracting new IT specialists to the departments of relevant law enforcement agencies; international digital integration, rationing on the legal basis of information exchange, coordination of the conceptual apparatus on the digital economy and its components; generalization and practical support of the dissemination of the best practices of European experience in countries with developed digital economies in the field of combating crime in this field; risk management of digital security in the economic sphere at the level of world integration, the state, individual industries, the private sector, enterprises of strategic importance to the state.

The digital economy in the EU states is developing progressively, primarily in such areas as: cloud technologies, Internet banking, and electronic services for the purchase of goods using a smartphone, block chain, online consultations and etc. Unfortunately, the existing regulatory framework at the EU level cannot provide an adequate level of resistance to technological and digital crimes. The European community is aware of all the risks and threats that cybercriminals can spread, but effective universal mechanisms of systemic struggle have not yet been developed. The general trend, which is stored in the EU in the format of intensifying criminal activity, is one step ahead of the law and practice of law enforcement in the «digital» space. Against this background, the number of crimes committed in the field of IT-technologies is constantly and dynamically growing. Annually criminals launder billions of euros using high-tech and, in particular, cryptocurrency, because government bodies have no influence on these processes, and the police are not able to monitor and block such transactions. Even if it is proved that the transaction is criminal in nature, law enforcement agencies are not able to freeze it or cancel it, unlike the traditional banking system, which requires the development of appropriate measures of mechanisms and their practical implementation.

Thus, law enforcement agencies and representatives of the digital economy industry should ensure parity principles of interaction and cooperation at both the operational and strategic levels. We can also confidently state that organized crime in the digital economy has a cross-border nature, and therefore measures to counter such crime include setting up, above all, effective international cooperation in this field.

Thus, currently, in the EU, there remains an expressive barrier between cybercrime and traditional organized crime groups, which is associated with different educational, cultural and professional levels of participants in these criminal organizations, as well as differences in ethnic and territorial composition, and the digital economy and its leading industries all remain vulnerable segments of the criminal encroachment.

References

1. Campbell, L. (2016). "Corruption by Organized Crime" - A Matter of Definition? Current Legal Problems, 69(1), 115-141. doi: https://doi.org/10.1093/clp/cuw004.

2. European Cybercrime Centre - EC3. Combating crime in a digital age. Retrieved from https://www.europol.europa.eu/about-europol/european-cybercrime-centre-ec3.

3. Kiberbezpeka v Ukraini: pravovi ta orhanizatsiini pytannia, Cyber security in Ukraine: legal and organizational issues: Proceedings of the All-Ukrainian Scientific and Practical Conference. (2016). (p. 233). Odesa: ODUVS [in Ukrainian].