SHOULD THE FREE ECONOMY BE LEFT UNCHAINED? Legislating the market.

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Financial crimes leave quite a peculiar mark on our society – they do not usually involve strong emotion from the public or extensive media coverage. When dealing with institutions, banks there could be noticed certain traits of objectification or lacking connection to humans involved, like the enormous of the crime could not be grasped – when in reality it affects not only individuals themselves, it also disturbs their views on the stability of the society. That is why, not only the governing bodies, but citizens should care about regulating that sector, especially in the age of globalisation.

Firstly, the financial and white-collar crimes are interlinked to the bigger crime networks more often than not. Taking for example money laundering – not only is it fraudulent to the rest of the taxpayers and governments, but the second characteristic of money laundering is acquiring untraceable resources – and that is the point in which it can get complicated. Starting with insider dealing and abusing the usage of private and disclosed information, which could have been easily followed by a line of way serious climes which include among others drugs dealing, even linkages to financing terrorism and human trafficking (2018 survey report)v. Not only do these clearly pose the threat to national security but also the mentioned undermine society’s trust and confidence in the government. The financial misdemeanours directly touch and jeopardise the well-established social structures and legal principles that citizens rely on. One of the examples of shortcomings or even incompetence when it examining the tools and ability to handle the problem could be found in the simple fact that even if the prosecution of the crime is successful, the amount of the funds recovered when compared to the amount laundered is 0.1% at best – not much comment is needed in the view of such striking contrast. Knowing all that and understanding that money laundering or embezzling the assets, had and will happen outside of the financial system, the focus of the action right now should be the regulation of the financial institutions since they have become a major channel for crime. Either, those public institutions, that were given the trust of the society, do not have an issue with abusing the power they yield or are alarmingly unregulated. Or maybe both?

After considering the presented facts one may ask themselves the question if maybe the area of interest is too vast for the governments to regulate and police efficiently. At that point, the consideration of the role that EU could play in the policy area with such a scope could be proven very valuable. As considered money laundering and financial crimes are shown to be in line with the EU’s values since it poses not only a threat to the area of security and justice but maybe even more importantly is affecting EU’s internal market. Last but not least, I would believe that even more considering it is directly a threat to rule of law and reliability and accountability of services – that EU set as one of its core principles. Since ‘dirty money’ is a known byproduct of corruption, which is clearly a sign of lack of transparency – therefore something that definitely falls within the EU’s area of interests. Since EU has already started legislating in the area, it has been shown that compliance with their policies in the area actually helps channel further development in other areas and practices of good governance. On the other hand, if there is no strong supervision system in place, the illegal actions will move to the countries with weak sovereignty that cannot exercise policing actions efficiently, while still being able to operate within the European market. Not only will that undermine the legitimacy of the whole EU’s shared economy but moreover will further deepen the imbalances within the EU, and making the process of properly addressing the issue at the later stage almost impossible.

However, the precedence and the biggest concern, will not be with the shared economy on European territory but with protecting and thriving of the Eurozone. However, the European economy is very interconnected, even when the steps are taken not only does it affect eurozone participants but all financial institutions participating in the common market. As can be noticed once again, the EU’s active participation in legislating against financial crimes would not only be heavily beneficial, it can and maybe should be even seen as a necessity.  

Last, but not least, being at the forefront of implementing the change could further solidify the EU’s strong position internationally as a leader of the evolution of governance. Since looking at today’s circumstances it is the only institution that has managed to successfully implement, not a bilateral, but a multilateral framework of fighting crime.

Following, the EU has a privileged position of already being in the disposition of the mechanisms and institutions, that not only can implement a real change, but also make sure it happens in an appropriate and considerate way, considering principles of legality, as much as thoughtfulness about the protection of businesses, customers and most importantly – human rights.