Researchers from the Centre of Economics and Fraud Management (Obegef), at the Faculty of Economics in the University of Oporto, estimate that economic crime in Portugal currently enjoys an annual turnover of around €50 billion.
This figure is rising 6-8% a year despite government attempts to identify fraudluelnt transactions and subject them to the courts or taxation.
The three to four billion per year rise in fraud, including VAT evasion, financial fraud, corruption, drug trafficking and tax evasion, mostly is due to or facilitated by the financial sector.
Booming tax evasion and money laundering stemming from corruption and other malpractice, heads the Oporto list and is creating the growth.
"Economic crime interconnects many activities. I often say that drug trafficking also an economic side, for example through money laundering. Terrorism, which is funded by human trafficking or laundered drugs income, embraces economic crime. Combating this crime may be fighting terrorism," said Aurora Teixeira, from the University, noting that the overwhelming majority of the money derived from criminal activities has to go through the financial sector.
Portugal's Public Ministry, banks and insurers soon will be able to investigate suspicious operations that may or may not be linked to ‘money laundering.’
Starting next year, Portugal’s prosecution service will have access in real time to bank accounts of those suspected of concealing or transferring funds for nefarious purposes.
The government is to join in the 2017 EC regulation that flags up any bank transaction of €1,000 or more. Detractors say this will create a monstrous archive for no good reason.
This snooping into the private financial affairs of Portugal's citizens now seems to have gone too far but with its business and political leaders involved in fiscal fraud, money laundering and tax evasion, it is little wonder that these sorts of intrusive laws get passed and willingly adopted by a state obsessed with the micro-management of its residents' affairs.
The State’s scapegoat, “the fight against terrorism” will remain unaffected as terrorists are not imagined to be affected by the current €5,000 trigger limit, and should not be unduly concerned by the lower amount.
In the meantime, fraudulent activity in the financial services industry is set to continue to rise as the proceeds of crime needs to be laundered by the country’s ever-willing bankers.
As for low level VAT avoidance where consumers pay a 'no questions asked' VAT free price to the plumber of electrician, or fail to get a restaurant receipt thus allowing the restaurateur to pocket the VAT part of the bill, may continue for as long as the State tax machine remains in pitched battle with the population and VAT remains at a 23% high.
