Information Sharing to fight financial crime across Europe should be improving not reducing

As a result of Brexit, and the inability to replicate equivalent rights and obligations in the EU UK Agreement signed on 24th December, 2020 the people and the citizens of Europe will be less safe in 2021, and law enforcement will be less able to access highly useful information that was available to prevent access and to identify and prosecute criminals and seize illicit funds and assets. Nevertheless UK Home Secretary Pritti Patel believes the deal is a good one for the UK despite the loss of information, with the UK in her opinion being “more secure through firmer and fairer border controls.”

FATF President Marcus Pleyer, and Executive Secretary David Lewis have focussed minds at the G20 and at the G7 recently that it is their responsibility to fully implement agreed standards and that information sharing both domestically and across borders are integral to improving effectiveness in the fight against financial crime.

How this then translates into FATF Member Countries, Leading G7 and G20 Countries dialling back EU UK co operation on policing appears counter intuitive, though not surprising when seen through the prism of Brexit.

By leaving the EU, the UK should not expect to benefit from club privileges, so the argument goes, but whilst this may be valid for trade, it is inconsistent with common goals on areas such as health, climate change, security and policing, where international co operation is essential and combining approaches represents a stronger overall response especially against those who operate outside the law and across borders.

EU Commission President, Ursula von der Leyen, in her message to G7 leaders in 2020 stated we need to “pool our expertise, share our resources and co ordinate our approaches” in particular in facing challenges such as that faced from COVID 19 and from climate change, but why is fighting financial crime different? It’s not.

The 1,246 page Agreement which was reached between the EU & the UK on 24th December, 2020 is still subject to final approval by the respective States and Parliaments. Whilst essentially a Trade deal it also includes an entire Part 3 on Policing & Co operation running to 79 pages (see Pages 282 -361), which brings the transition period to an end on 31 December 2020.

The EU Member States and a small number of Schengen States have built an impressive array of tools to share information highly useful for policing and for prosecutors as well as fora and bodies upon which EU co operation is based. These include databases on DNA, Fingerprints & Vehicle Registration, and on Flight details of passengers. Another database include data on persons of interest, for example those subject to arrest, extradition, no entry, as well as missing persons, suspected stolen or lost government issued documents such as passports or IDs, or other suspected stolen goods such as cars, boats and planes.

Whilst the UK will retain automatic access to information to identify DNA, Fingerprints and Vehicle Registration as well as Passenger Flight Details, it will lose automatic access to the rest, including for example information held in SIS 2 (Schengen Information System 2) and it will lose its membership of Europol. For more details see below.

Schengen Information Service 2

The SIS2 database is an essential tool for European policing, which includes data from all Member States plus a few third countries who are Schengen area members. Data is contributed by the participating states on wanted persons, for example suspected terrorists and criminals, as well as missing persons, stolen or missing passports and ID documents, stolen or missing goods, such as vehicles, boats, aircraft, firearms, etc. As at the end of 2019, approx 91 million alerts were registered in the SIS2 database, which was queried over 6.6 billion times, with the UK the third highest user of the data, querying the database 571 million times (8.5%) in 2019 and the 5th highest contributor of alert data, representing 4.6 million alerts (5%).

Available Alerts on “Persons” represents 983,124 or 1% of the total, and represent 5 separate categories of people. These include third country nationals to be refused entry and stay into the EU – Schengen area (527,000 – 54%), persons for discreet and specific checks (168,032 – 17%), persons to assist with a judicial procedure 126,729 – 13%), missing persons (120,942 – 13%) & persons subject to an arrest warrant, surrender or extradition request (40,322 – 4%).

Hits (matches) against these alerts in 2019 were impressive, with an overall hit rate on average at 29%, including 11,859 matches and also a 29% hit rate for persons subject to an arrest warrant, surrender or extradition request.

Instead of continuing this successful example of international information sharing, the parties will need to find new ways to replace this arrangement either on a bilateral basis or by accepting significant  limitations that come with rights to request information from each other, short of automated exchanges.

Europol

For the UK, it’s membership of Europol will cease, but relationships will be maintained. Liaison officers from the U.K. can be appointed, who exist already for countries such as the US, Canada and Australia. Europol has and continues to be an important fora for the exchange of information throughout Europe, where police from member States and third parties work closely together. The UK will lose automatic access to Europol databases and direct access to Europol specialist analysts. Europol may also lose out with the UK the highest contributor of data to Europol for strategic thematic and operational analysis in 2018.

Data Protection

Despite a significant degrading in the level and amount of information sharing, these new arrangements that are allowed are predicated on both parties ensuring a high level of protection on personal data, where a grace period of 6 months has been agreed in order to determine whether the UK has “adequate” data protection measures in place. Work on an EU adequacy decision has taken longer than expected, partly because of a ruling by the European Court of Justice in July 2020 that demanded data protection in third countries must be “essentially equivalent” to that of the EU. The ruling forced EU data protection regulators to adopt a much tougher approach to data transfers.

Whilst the UK has a long standing tradition of protecting personal data as a former EU Member State and there is a close alignment with EU Data Protection Laws & Regulations there are some differences in approaches and it is not a foregone conclusion that adequacy will be achieved.

Conclusion

European Information Sharing on Policing is being reduced and by a not insubstantial amount. The UK has contributed significant information to EU Member States that is highly useful and vice versa.  Whilst some of the data that has been exchanged will continue to be automatically accessible, a very significant amount will not. Even these continuing arrangements are subject to expectations as to compliance with EU data protection laws and regulations that could impact their future usage.

The UK Government is wrong to claim it has safer borders, without describing what makes it safer. Taking back control, but losing access to existing information that can help identify those that pose real risks is unwise and will be of benefit only to those that would have been stopped, but now might not be. The EU Commission, Parliament and Member States are also wrong to treat policing as a club issue. Collaboration between the EU and the UK as a Member State over many years could instead have been the opportunity to increase collaboration including information sharing with third countries, especially between ones as aligned and committed to fighting financial crime.

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