Tackling the Illicit financial flows – the TRACE project starts

The menace of Illicit financial flows

Due to the impact of increased and spread of ICT-related crimes and illicit financial flows (IFF), there is a need for innovative policing tools, skills, organisational and regulatory adaptations to counter these threats. Law enforcement agencies (LEAs) and financial intelligence units (FIUs) are affected the most due to their lag in tracking criminal activities supported by advanced technologies.

The TRACE project is developed to curb the negative impact of illicit money flows. It creates solutions based on experiences from:

• Terrorist financing
• Web forensics
• Cyber extortion
• Use of cryptocurrencies in property market transactions
• Money laundering in arts and antiquities and,
• Online gambling

The TRACE Project Officially Starts

A virtual TRACE kick-off meeting was held on July 9^th, 2021. Participants in attendance included the Project Officer from the European Commission and an international consortium of organisations comprising law enforcement agencies (LEAs), financial intelligence units, AI technology companies, academia, research institutes and NGOs.

The meeting marks the official start of the project. Its aim was to discuss the project organisation, address expectations from different partners and their contributions. Each partner has specific expertise that would be valuable toward creating, implementing, monitoring and reviewing the project toward success.

About TRACE

The TRACE project is funded by the EU under the Grant Agreement ID: 101022004. The project budget is almost 7 million Euros and will run from 1^st July 2021 to 30^th June 2024, a period of 3 years. There are 16 partners involved in this project from 8 EU countries: United Kingdom, Spain, France, Portugal. Estonia, Czechia, Austria and Germany.

What TRACE can do

TRACE focuses on creating visibility around the money trail that LEAs need to follow in order to crack down on illicit money flows. It paves the way for recovering proceeds of crime and disrupting illicit financial flows.

In order to do this, TRACE solutions engage stakeholders from the beginning to co-develop advanced investigation tools, test and confirm their efficiency in detecting illicit financial flows. It follows a process where it identifies, tracks and documents illicit financial flows by focusing on:

• Input that forms the initial suspicion,
• Processing that substantiates the suspicion through finding evidence and,
• Output that consolidates and produces admissible e-evidence.

Core to the solutions is the ethics-by-design that takes into account societal aspects, the issue of location, jurisdiction and cross-border nature of crimes. Additionally, there is a Stakeholder Board consisting of 20 LEAs and an Ethics Advisory Board consisting of 4 external ethics experts and 2 partners that play an important part in discussing good information sharing practices among EU LEAs.

Role of Privanova

Cross-border investigations, prosecutions, convictions and asset recovery have been hindered by differences in legal systems concerning in particular rules on admissibility and international fragmentation of e-evidence. The culprits use legal loopholes and technical innovations that make the tracking down operations of LEAs difficult. With expertise in cybercrime, ethical use of AI and data protection for EU-funded projects, Privanova brings a myriad of experience toward alleviating illicit money flows through the TRACE project.

The TRACE project will remain compliant with ethics principles and relevant laws throughout its lifecycle. It supports the operation of LEAs within the project by providing improved investigation tools and systems. These include tools for locating and mapping hidden service directories, forensic analysis and data provenance models.

In collaboration with LEA partners, Stakeholder Board LEAs and other LEAs, Privanova will evaluate how efficient the TRACE tools are in their investigation capabilities. This ensures that illicit money flows are detected early, their threat level is analysed, and preventative actions are enabled to reduce the negative impact of such flows.