Fighting Crime Across Borders: Sovereign Equality and Judicial Cooperation in Criminal Matters

Following the money across borders: why EU cooperation depends on the predicate offense

Money laundering rarely exists in isolation. It is the process by which criminal proceeds are concealed, converted, transferred or presented as legitimate. The underlying conduct that generated those proceeds is the predicate offense, and identifying it is central to proving the laundering case.

That connection creates a practical challenge for European investigators and prosecutors. The criminal activity may take place in one Member State, the proceeds may move through several others, and the assets may ultimately be controlled through a company, account or property in a fourth jurisdiction. A laundering investigation therefore depends on more than tracing transactions. Authorities must establish the source of the property, identify the people who controlled it, determine the relevant jurisdictions and secure evidence that can be used in court.

The European Union’s framework for judicial cooperation in criminal matters has developed in response to this cross-border reality. Its central objective is not complete uniformity of national criminal law. Rather, it seeks to make different legal systems work together through mutual recognition, common minimum standards and institutional coordination.

From sovereign control to structured cooperation

Criminal law remains closely connected to national sovereignty. States retain primary responsibility for defining offenses, setting penalties, organising courts and directing domestic prosecution services. This is particularly important in financial crime cases, where national rules may differ on the definition of fraud, corruption, tax offenses, confiscation, corporate liability and evidential requirements.

At the same time, financial crime is not constrained by national borders. Fraud proceeds can be routed through multiple financial institutions, assets can be held by nominees in another country and digital evidence can be stored or accessed from anywhere. A strictly national response can therefore leave critical gaps.

EU cooperation developed gradually. The Maastricht Treaty initially placed judicial cooperation in criminal matters within an intergovernmental framework. Cooperation was largely based on consensus, voluntary arrangements and the exchange of information. There was no broad system for harmonising criminal law or compelling uniform procedural standards.

The Amsterdam Treaty moved the EU towards a more integrated model. It reinforced mutual recognition of judicial decisions and supported the development of instruments such as Eurojust and the European Arrest Warrant. The Lisbon Treaty later abolished the three-pillar structure and incorporated judicial cooperation in criminal matters into the EU’s general legal framework. It also expanded the Union’s ability to establish minimum rules for serious cross-border crime.

This evolution matters directly to financial crime enforcement. Mutual recognition can help authorities obtain evidence, surrender suspects and enforce decisions without repeating every stage of the process in the executing state. Coordination can prevent parallel investigations from missing the wider criminal structure. Common standards can make it more difficult for offenders to exploit procedural differences between jurisdictions.

Bastian Schwind-Wagner _Follow

"Money laundering cannot be addressed effectively without investigating the predicate offense that generated the proceeds. Cross-border fraud, corruption, VAT schemes, cybercrime and organised crime require authorities to trace assets, identify beneficial owners and coordinate evidence across jurisdictions.

EU cooperation supports this work through mutual recognition, common procedural safeguards and institutions such as Eurojust, Europol, OLAF, the EPPO and AMLA. Its legitimacy depends on balancing effective enforcement with national sovereignty, judicial independence, due process and equal protection for suspects and victims."

The predicate offense determines the direction of the investigation

A laundering case normally requires an evidential link between property and criminal conduct. The prosecution does not necessarily need to prove every detail of the underlying offense before investigating the laundering, but it must be able to show that the assets are connected to criminal activity.

The predicate offense may include fraud affecting public funds, corruption, drug trafficking, human trafficking, cybercrime, terrorism financing, tax-related offenses or participation in organised crime. The source offense often explains the movement of funds. It can reveal why payments were divided, why shell companies were used, why assets were transferred to relatives or associates and why apparently legitimate transactions were arranged.

For investigators, this means that the financial trail should be analysed alongside the conduct that produced the proceeds. A bank transfer without context may be suspicious, but the evidential value becomes much stronger when it can be connected to a false invoice scheme, bribery arrangement, procurement manipulation, online fraud operation or misappropriation of public money.

The relationship also operates in the other direction. Financial evidence may be the clearest way to expose the predicate offense. Unexplained wealth, concealed beneficial ownership, circular payments and rapid transfers through several jurisdictions can identify relationships that witnesses or conventional investigative methods fail to reveal.

Common minimum standards and mutual trust

Mutual recognition depends on mutual trust. A Member State is more likely to recognise and enforce a decision from another jurisdiction when it can reasonably assume that the requesting authority acted lawfully and respected fundamental rights.

The EU’s common minimum standards seek to support that trust. They cover matters such as access to a lawyer, information about charges and procedural rights, interpretation and translation, the presumption of innocence, legal aid and safeguards for children. Victims are also entitled to information, support and protection.

These standards are relevant to financial crime cases in several ways. A suspect facing allegations of laundering proceeds from a cross-border fraud must be able to understand the case, communicate with counsel and challenge the evidence. A victim of investment fraud or corruption must be able to obtain information and participate effectively in the proceedings. Evidence collected in another Member State must be obtained through procedures capable of satisfying the requirements of the trial court.

The standards are minimum requirements rather than a complete criminal procedure code. Member States may provide greater protection under national law. The resulting flexibility respects legal traditions, but it can also produce differences in practice. A formal rule may exist in every jurisdiction while the availability of specialist investigators, forensic accountants, interpreters, legal aid and digital evidence capabilities varies considerably.

That difference has a direct effect on enforcement. A jurisdiction with limited resources may struggle to analyse complex corporate structures or respond quickly to requests involving cryptocurrency, online platforms and overseas assets. Equal legal status does not always produce equal operational capacity.

Financial crime cooperation involves several institutions

Eurojust supports coordination between national prosecutors and judicial authorities. Its role is especially important where several states have jurisdiction over the same laundering network or predicate offense. It can help resolve conflicts over which state should lead an investigation, support joint investigative activity and promote information exchange.

Europol contributes intelligence and operational support, particularly where financial crime is connected to organised criminal groups, cybercrime or terrorism. Its analytical capabilities can help identify links between suspects, accounts, companies, devices and transactions across national systems.

The European Anti-Fraud Office investigates irregularities and fraud affecting the EU budget. The European Public Prosecutor’s Office has a more direct prosecutorial role in participating Member States. It investigates and prosecutes offenses affecting the EU’s financial interests, including fraud involving EU funds, corruption, misappropriation and related money laundering.

The EPPO is significant because laundering connected to EU fraud is not treated merely as a secondary financial issue. The laundering may be part of the same criminal conduct as the fraud itself. Funds diverted through false grant applications, manipulated procurement or fraudulent VAT structures may be layered through companies and accounts before being invested in property or transferred outside the EU.

Its cross-border structure can reduce the risk that separate national investigations will examine only isolated transactions. It can also improve the prospects of coordinated searches, account restraints, asset tracing and prosecutions before national courts.

AML obligations are the preventive side of criminal enforcement

Judicial cooperation addresses the response to crime after suspicion has arisen. Anti-money laundering obligations operate earlier by requiring regulated entities to identify customers, understand beneficial ownership, monitor transactions and report suspicious activity.

These preventive measures are particularly important where the predicate offense is not immediately visible. A bank may not know that a payment relates to bribery or fraud, but a pattern of payments to newly formed companies, unexplained transfers through high-risk jurisdictions or transactions inconsistent with a customer’s profile may justify further review.

Beneficial ownership information is central to this process. Criminal networks often separate legal ownership, control and economic benefit. Companies may be registered in one country, managed from another and funded through accounts held by nominees. Reliable ownership information helps investigators connect the legal structure to the individuals who benefit from the proceeds.

The EU’s AML framework aims to reduce differences between national systems. Yet implementation remains uneven. Supervisory intensity, reporting quality, access to company information and the investigative capacity of financial intelligence units can vary. These differences can create opportunities for regulatory arbitrage, allowing criminals to route funds through jurisdictions where controls are less effective.

The development of the European Anti-Money Laundering Authority is intended to strengthen supervision and coordination at EU level. Its effectiveness will depend on the quality of information shared by national authorities, the consistency of supervision and the ability to identify risks that extend beyond a single Member State.

Cross-border VAT fraud shows why the predicate and laundering must be analysed together

VAT fraud is a clear example of the connection between a predicate offense and laundering. A carousel or missing-trader scheme may involve companies in several jurisdictions, false invoices, rapid movement of goods on paper and the extraction of VAT that was never properly paid.

The initial fraud generates the proceeds. Subsequent transfers between companies, withdrawals, purchases of property or payments to associates may disguise their origin. Treating the VAT fraud and the laundering as separate events can obscure the structure of the operation. A combined analysis can show how the money was generated, moved and ultimately controlled.

The EPPO has jurisdiction over certain offenses affecting the EU’s financial interests, including serious cross-border VAT fraud meeting the applicable threshold. This illustrates the broader policy choice behind stronger EU cooperation: where the harm affects the Union’s shared financial resources, fragmented national enforcement may be inadequate.

Asset freezing and confiscation are central outcomes

A successful prosecution is not the only measure of effectiveness. Financial crime enforcement must also address the proceeds and instrumentalities of the offense.

Asset freezing can prevent suspects from moving funds while the investigation is under way. Confiscation can remove the economic benefit after conviction, subject to applicable legal safeguards. These measures are particularly important in laundering cases because the movement of assets is often the purpose of the concealment scheme.

Cross-border action is essential. An order issued in one jurisdiction may have little value if the funds have already been transferred to an account or investment in another. Mutual recognition and cooperation between prosecutors, courts, financial intelligence units, asset recovery offices and financial institutions can prevent the dissipation of property.

The process must still respect proportionality and due process. Freezing an account can affect innocent co-owners, employees, creditors or businesses that depend on access to funds. Authorities must distinguish between property connected to the offense and property that has no sufficient evidential link.

The rule of law is an enforcement condition, not an obstacle

Effective cooperation requires lawful and reliable institutions. Authorities must act within their legal powers, decisions must be subject to review and the rights of suspects and victims must be respected.

This is especially important in complex financial crime cases. Large investigations may involve extensive surveillance, searches, data analysis, account restraints and international evidence requests. The scale of the operation cannot remove the need for a legal basis, judicial oversight and meaningful defence rights.

If a Member State is perceived as failing to guarantee judicial independence or fair proceedings, other states may hesitate to surrender suspects or recognise decisions. Mutual trust is therefore not automatic. It is earned through consistent compliance with legal standards.

The same principle applies to the CJEU. Its role is to ensure the uniform interpretation and application of EU law, including rules governing judicial cooperation, procedural safeguards, mutual recognition and the protection of the Union’s financial interests. Preliminary rulings can clarify the meaning of EU measures and help national courts apply them consistently.

At the same time, the expansion of EU-level influence raises legitimate questions about the boundary between shared cooperation and national competence. Criminal justice remains closely tied to constitutional structures, public accountability and national legal traditions. Clear treaty-based limits and effective judicial review are necessary to preserve confidence in the system.

Equality requires more than identical rules

The principle of equality has two dimensions in cross-border criminal justice. First, Member States must participate as legally equal partners, regardless of their size or political influence. Second, individuals involved in criminal proceedings should receive comparable protection and treatment regardless of where the case is investigated or prosecuted.

Formal equality is not enough. A common rule may produce different results if one jurisdiction has advanced financial intelligence systems and another lacks trained specialists. A mutual recognition instrument may operate unevenly if access to defence lawyers, interpreters or judicial review differs in practice.

The same concern applies to the distribution of cases and resources. Large financial investigations often attract institutional attention, while smaller cases affecting local victims may receive less support. A credible system must address both major cross-border schemes and lower-value conduct that causes substantial harm to individuals and communities.

Improving practical equality requires sustained investment in investigative capacity, digital forensics, asset recovery, prosecutorial expertise and secure information exchange. It also requires monitoring whether EU measures are genuinely applied rather than implemented only on paper.

A balanced model for the future

The EU does not need a single criminal code to improve the fight against money laundering. It needs reliable cooperation around clearly defined shared interests.

The strongest model combines national responsibility with coordinated action where crime crosses borders or affects common financial resources. Minimum standards should protect suspects and victims without erasing legitimate differences between legal systems. Eurojust, Europol, OLAF, the EPPO, financial intelligence units and the AMLA should operate with clearly defined mandates and appropriate accountability.

For money laundering cases, the practical priorities are clear. Authorities must identify the predicate offense, trace the proceeds, establish beneficial ownership, secure admissible evidence, select the appropriate forum and prevent the movement of assets. Each stage depends on cooperation between jurisdictions.

Cross-border enforcement will remain effective only if it preserves both sides of the bargain. States must accept that serious transnational crime cannot be addressed through isolated national action. EU institutions must respect the limits of conferred powers, national legal diversity and fundamental rights. Equality is credible only when cooperation strengthens enforcement without turning formal uniformity into a substitute for fairness, accountability and effective justice.

Dive deeper

• Research ¦ Marcin Wielec (2026) ‘Fighting Crime Across Borders: Sovereign Equality and Judicial Cooperation in Criminal Matters’. In: David Sehnálek (ed.) Unequal Equals? The Status of Member States in an Integrating European Union, pp. 369–415. Miskolc–Budapest, Central European Academic Publishing, https://doi.org/10.54237/profnet.2026.dsuesmsieu_12. ¦ Link ¦ licensed under the following terms, with no changes made: CC BY-NC-ND 4.0