Countering money laundering has long been a topic of high public and expert importance, since the phenomenon has multi-vector effects: it impacts the country’s economy and security and may also exert significant influence on political processes. Nevertheless, in-depth analyses on the subject are rare.
The reason is that, the private sector often perceives measures in this area as invasive and interfering with free economic initiative. When enhanced regulatory oversight is discussed, the private sector often reacts with suspicion or concern that this will require additional investment to strengthen prevention and counteraction mechanisms. Despite these attitudes, assessment remains necessary, as some risks are strategic in nature and may result in long-term consequences for the state.
Money laundering is a complex unlawful activity aimed at concealing the origin of funds acquired through crime and other socially dangerous acts, or at transforming assets in order to introduce them into the legitimate economy and give them a lawful appearance.
According to data from Europol and the United Nations Office on Drugs and Crime, between 2 and 5% of global gross domestic product is laundered annually, i.e., between €715 billion and €1.87 trillion. Complex and innovative schemes are employed for this purpose—every new instrument in legitimate trade, such as crypto-assets, can be used for laundering money. The novelty and relative unfamiliarity of these technologies to financial intelligence make them particularly attractive to criminal circles, as they enable the creation of seemingly legal businesses.
When the risk of money laundering materialises on a large scale, the consequences for the economy are serious and multi-dimensional. For instance, laundered capital may distort markets and damage competition by financing companies that offer goods or services below production costs. This displaces legitimately operating enterprises and creates conditions of commercial inequality.
The banking and non-banking financial sectors are particularly vulnerable—they are a prime target for criminal networks due to their key role in economic security. Large-scale money laundering directly threatens the stability of both sectors, as illicit deposits and investments undermine trust in the entire financial system. The inclusion of a state in negative registers, such as the Financial Action Task Force grey list, signals strategic deficiencies in combating money laundering. The resulting unfavourable image discourages foreign investment, complicates international trade, and may lead to partial isolation of the state. Reduced confidence creates risks for the economic growth and national competitiveness. At the same time, the private sector bears increased operating costs due to additional checks, transaction monitoring, and staff training.
The massive inflow of illicit capital can lead to the takeover of entire industries, including those outside the financial sector, such as real estate. The process often extends to the sphere of public procurement, where corrupt pressure in contractor selection may become part of laundering schemes. Uneven distribution of resources is also a possible negative effect. Illegal funds often concentrate in a limited number of regions (large areas or cities) and sectors, creating an illusion of growth while in fact infecting economic life. In the long term, these processes may lead to low-quality production and services, distortion of sectoral structure, and a slowdown in economic growth.
Although it is an economic crime, money laundering has the potential to threaten the foundations of national security. There is a direct correlation between the volume of criminal funds flowing into the economy and the level of political stability. Europol data shows that about 60% of criminal networks operating in the EU use corruption methods to achieve their goals.
Large-scale money laundering also creates favourable conditions for influence peddling and lobbying, which erodes statehood and undermines democratic foundations. According to the European Commission, criminally sourced funds may also be used to destabilise entire states. Shedding light on illicit financial flows not only protects democracy and improves the security and well-being of the population, but also helps limit the influence of foreign states.
It’s important to note however, that real and effective state counteraction would also lead to increased public spending. Money laundering as a phenomenon cannot be completely eradicated, but limiting its intensity requires serious institutional efforts. Providing the necessary human resources and administrative capacity would entail a reallocation of public funds in favour of security and law enforcement.
In the short term, money laundering leads primarily to negative economic effects, while in the long term—to political and social instability. It is a multifaceted risk that affects not only individual enterprises but also the very foundations of statehood. If left uncontrolled, the state may lose authority over entire sectors of the economy, while its institutions may become compromised.
It is necessary to develop policies for enhanced supervision, effective sanctions, continuous monitoring of financial flows, as well as international cooperation and information exchange. Only through a comprehensive approach can the most negative scenarios be prevented—growth of economic crime, corrupt pressure on senior officials, outflow of foreign investment, and loss of public trust.
