Second round table on underground banking: Focus on global networks

Underground banking refers to informal, unregulated payment systems through which funds are transferred outside the official banking sector. This occurs, for example, when a money transfer service provider in one country receives money and arranges for the equivalent sum to be paid out in another country without carrying out an official transaction or using a bank account. However, this money does not always remain outside the formal financial sector: sometimes it finds its way back into the official financial system.

Underground banking has existed in one form or another for over a thousand years – longer than conventional banking. Originally arising from the need to transfer money securely and quickly over long distances, it is now increasingly being used for laundering money, financing terrorism and circumventing sanctions.

The two-day round table in Bern brought together experts from INTERPOL, Europol, the United Nations Office on Drugs and Crime (UNODC), the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) and numerous national and international law enforcement agencies and financial intelligence units (FIUs). The discussions focused on the latest findings regarding global money laundering and terrorist financing networks, the misuse of payment service providers, and digital analysis methods for identifying illicit financial flows.

Particular attention was given to the cross-border networking of money laundering structures with other criminal organisations.

The second round table on underground banking clearly showed that illicit financial flows using the increasingly sophisticated shadow banking system can only be combated effectively through international cooperation, the real-time exchange of information and technological innovation.