Interlocking Action

How Cooperation Within Organizations is Key to Combating Transnational Crime

📅 February 27, 2025

Transnational crimes – such as trafficking, smuggling, and cybercrime – are valued at more than $2 trillion annually, and more than 80% of the world’s population lives in countries with high levels of exposure to criminality. To counter the destructive effects on economies and individuals, coordinated action is required.

For the public sector, the powers of law enforcement are constrained by national boundaries, and international cooperation is required to extend action beyond them. For the private sector, regulatory requirements are established and enforced by each country. For example, privacy requirements—justifiably put in place to protect citizens’ information—often constrain movement of data across borders. While the need for international cooperation by law enforcement and other government agencies is well-established and there have been successes—as described below—there is scope for further action within private sector organizations.

Why is coordinated action required to counter transnational crime?

Some types of criminality are by their nature transnational. For example, for narcotics trafficking or the illegal wildlife trade, the sources of trafficked products are often different from their key markets. To provide another example, countries and entities subject to sanctions and export controls—such as Russia and Iran—seek components from western countries because items cannot be produced domestically, or are of lower quality than components sourced internationally. In both examples, the illicit procurement networks sourcing these items must, by definition, move them internationally from their origin to their intended use or final market.

Criminal networks may also deliberately use international activities in an attempt to obscure the financial trail and make it more difficult to follow. For example, they may use shell or front companies registered in different jurisdictions from the buyer or seller, cross-border payments routed through third countries, or transshipment points. Physical items may be moved along different travel routes than the corresponding financial flows. These all aim to increase the difficulty of public and private sector organizations to “follow the money.” However, international cooperation can still achieve success.

Successful Action Against a Transnational Criminal Network: Operation Destabilise

A real-life example of how coordinated joint action can be effective against transnational criminal networks is Operation Destabilise. This Operation, led by the United Kingdom National Crime Agency (NCA), achieved success in 2024 against an organized criminal network spanning multiple countries. The origin of the funds laundered by the network included the proceeds of several types of criminal activity, including the proceeds of ransomware.

In the United Kingdom, the organized crime group used a network of operatives to receive handovers of cash. For these handovers, there was a corresponding movement of crypto of the same value paid to the criminal network. The funds were used by the criminal network to purchase weapons and drugs.

The global network involved more than 30 countries, including the UK, Middle East, South America and Russia. The network was also linked with a company registered in Thailand which facilitated export of electronic components to Russia.

In addition to the NCA, the success of the Operation Destabilise was the result of cooperation with the United States (OFAC, the Federal Bureau of Investigation, and the Drug Enforcement Agency), France (Direction Centrale de la Police Judiciaire), Ireland (An Garda Síochána), and authorities in the UAE.

The outcomes so far include sanctions imposed by OFAC, 84 arrests, and seizure of more than £20m ($25m) in cash and crypto.

Multinational Financial Institutions: A Strength and Weakness Against Transnational Crime

In the private sector, many organizations are also multinational, including financial institutions. This provides both strengths and weaknesses when detecting, disrupting, and preventing transnational crime.

As a foundation, all financial institutions must ensure their staff have sufficient training and experience on typologies and “red flags” associated with international criminal activity. Banks that operate only in limited geographical markets may still be a target for criminal networks, as was evident in the recent TD Bank enforcement action. Although TD Bank operated primarily in specific regions of the United States and Canada, its AML program failures resulted in it being targeted by illicit actors laundering proceeds of criminal activity from multiple high risk countries. Therefore, it is not only international or global financial institutions that are vulnerable.

In contrast, a multinational or global financial institution may have some advantages in countering illicit finance networks. These institutions may hold transaction and customer data on cross-border financial flows between their branches or subsidiaries in multiple countries. This provides the potential to enable internal investigative teams to “follow the money” beyond national borders and to map out more of the criminal network.

The limitation is that a multi-national financial institution will need to comply with regulations in multiple jurisdictions, such as those where there are restrictions on cross-border movement of data. To remain compliant with requirements such as data privacy—while also taking effective action against illicit activity—a bank will need to unify action internally between different stakeholders, including those beyond the financial crime compliance team.

We have seen the significant adverse consequences where an organization does not find the right solution.

Inadequate Internal Coordination: Enforcement Actions

Nordea (2024): Nordea’s International Branch served customers including those located in or beneficially owned by persons in Russia and Eastern Europe (referred to in Nordea as “East” customers). Some of these customers exposed Nordea to money laundering risks including the “Russian Laundromat” and “Azerbaijani Laundromat”. After Nordea made the decision to close its International Branch, the East customers sought to open accounts in Nordea’s Baltic branches and Luxembourg. Nordea was unable to monitor whether these exited customers were onboarded at other branches due to bank secrecy restrictions limiting sharing of customer information across branches.

Swedbank (2023): Swedbank engaged in transactions with a customer in a sanctioned region. Although the bank collected IP address data which indicated the customer’s location, it had not integrated this data into its screening processes.

HSBC (2012): HSBC Group did not inform its U.S. business, HSBC Bank USA, of significant AML deficiencies at HSBC Mexico, despite knowing that these problems existed. The result was the potential flow of hundreds of millions of dollars in narcotics trafficking proceeds from HSBC Mexico through HSBC Bank USA.

Actions for Chief Compliance Officers

To fulfil their responsibilities to take action against transnational crime while also fulfilling national jurisdictional requirements, Chief Compliance Officers should:

Involve teams beyond financial crime compliance in decision-making and implementation of countering transnational crime, such as privacy, legal, cyber security, and tech/data teams, who have relevant subject-matter knowledge to identifying solutions.
Establish a “culture of cooperation” alongside a “culture of compliance” to ensure that the compliance department coordinates and communicates internally, across all jurisdictions, to the maximum extent permitted.
Negotiate the scope and any restrictions on sharing information in advance as part of setting out the organization’s operating model, rather than as “ad hoc” responses during an investigation where it may cause delays in effective action.

By undertaking these actions, an organization will be able to provide the most effective response to transnational criminal networks while also fulfilling its regulatory obligations.

Recorded Webinar

The Institute for Financial Integrity Wednesday hosted a webinar on the convergence of sanctions and financial crimes compliance featuring a panel of experts.

Key topics to be addressed include:

The increasing overlap in the specific conduct targeted by both sanctions and AML/CFT regimes
The common preconditions associated with effective sanctions programs and AML/CFT measures
How AML controls and investigations can help detect sanctions and trade control evasion and uncover assets and transactions of designated individuals and entities
Red flags associated with both sanctions evasion and financial crimes
The overlapping elements of effective compliance programs across AML/CFT, sanctions compliance, anti-bribery and corruption (ABC), fraud risk management, and export controls
How integrating these programs can lead to more efficient outcomes and overall stronger risk management for institutions

View Recording

Recommended Blogs

Lifting Sanctions on Syria

March 28, 2025

Human rights activists have been advocating for the lifting of sanctions to help Syria rebuild after nearly 14 years of destruction. What would U.S. sanctions relief for Syria entail? What changes will likely be required?

Advancement in Digital Asset Markets

March 24, 2025

Review policies and regulation on crypto in the U.S., UK, EU, and globally, how this influences adoption, and measures to capitalize on rewards while managing illicit finance risks.

False Flags, Fake Docs, and Fraudulent Routes

March 19, 2025

Russia continues to evade the $60 per-barrel price cap on its seaborne oil shipments. What can financial institutions engaged in documentary trade in the energy sector and other industry stakeholders do to mitigate their risks?

Untangling the Threads of Global Economic Tools

March 13, 2025

Ever wonder how export controls, sanctions, and proliferation finance differ—and why it matters? This article breaks down these essential tools, explains their unique purposes, and highlights how they often overlap in the real world.

Navigating the Convergence of Sanctions & AML Regimes

March 11, 2025

In our recent webinar, the director of compliance and enforcement at OFAC and three financial integrity industry leaders discussed the importance of breaking down silos and shared other advice for AML/CFT and sanctions professionals.

Russia: Slew of Sanctions

March 3, 2025

Explore the highlights from our most recent webinar about Russia sanctions. What happened in 2024, how has the regulatory atmosphere changed, and how will the sanctions environment evolve in 2025?

The Heat is On

February 24, 2025

Explore the key insights and implications from Transparency International’s 2024 Corruption Perceptions Index.

Lighting Up the Darknet

February 20, 2025

The validity of blockchain analytics technology was assessed in the Bitcoin Fog money laundering trial. What lessons does the Court’s reasoning have for Chief Compliance Officer using blockchain analytics and other decision support technologies?

Walking the Sanctions Tightrope

February 18, 2025

In today’s fast-evolving regulatory landscape, sanctions compliance can feel like an uphill battle. This guide explores the key challenges compliance officers face—ranging from multi-jurisdictional rules to cryptocurrency complexities—and offers practical tips to stay ahead.