South Eastern Europe is beset by cash smuggling across its borders.

Transporting cash across international borders is one of the oldest forms of money laundering and is still widely used today. Many illicit transactions are cash-based and many types of crime are transnational, so smuggling cash across frontiers fuels criminal activities, including in South Eastern Europe. By transporting large amounts of banknotes in luggage or vehicles, criminals can avoid leaving a paper trail and very largely evade detection by law enforcement and financial institutions. Seizures at key border points across the region indicate smuggling is on an upward trend, and recent EU efforts to tackle the problem risk being lopsided, unless complemented by enhanced efforts in the Western Balkans.

Intensified physical smuggling of cash is indicated by, for example, couriers moving drug profits from the UK to Albania, as well as in both directions along the Balkan route, notably across the border between Bulgaria and Turkey. Since Russia’s full-scale invasion of Ukraine in February 2022, there has also been an increase in attempts to move and launder money into the Western Balkans from Ukraine and Russia.

The use of cash has been declining for years, but not for criminals. Despite the growth in electronic transfer channels, including new cryptocurrency services, bulk cash smuggling remains a favoured method for criminals to move illicit funds. Along with the absence of a paper trail, this method avoids the costs of electronic transfer agencies such as Western Union and MoneyGram.¹ To move large amounts of cash, vehicles are often adapted to include special compartments.

Smuggling cash not only enables tax evasion and money laundering, but it can also fund other types of crime, terrorist acts and political corruption. Countries are therefore paying greater attention to going after the proceeds of crime. For example, the EU in April issued Directive (EU) 2024/1260, which includes enhanced powers for cross-border cooperation, streamlines procedures for freezing and confiscating assets, and incorporates provisions to target not just individuals but also legal entities involved in illicit activities.² The UK, meanwhile, has long used the (2002) Proceeds of Crime Act to confiscate undeclared cash.³

Cash smuggling hotspots

Seizures suggest that smuggling of cash to Albania is a problem. On 13 April 2024, four alleged members of an organized criminal group were arrested at the British port town of Dover and approximately £200 000 in cash was seized in a van bound for Tirana. Police suspect that the group operates under the guise of a legitimate courier company to smuggle cash from the UK to Albania.⁴ This is not an isolated incident. According to Albanian customs, about €2 million, £452 000, US$166 000 and 50 000 Swiss francs were confiscated across the course of 2023, nearly double the amount of cash seized in 2022.⁵ Investigations have revealed that the international airport in Tirana and the port of Durres are the main crossings through which significant amounts of undeclared money have passed.⁶

On 13 April 2024, four alleged members of an organized criminal group were arrested at the British port town of Dover and approximately £200 000 in cash was seized in a van bound for Tirana.

Photos: UK National Crime Agency

A considerable amount has also been seized in Serbia. Between 2020 and 2023, more than €13 million in cash was seized at the Serbian border, predominantly from foreign nationals.⁷ The largest cash seizure in the last 10 years came in June 2022, when customs and police thwarted an attempt to smuggle more than €700 000 and two emeralds at the Preševo border crossing between Serbia and North Macedonia.⁸ In another spectacular haul, customs officers at the Kelebija border crossing between Serbia and Hungary in June 2023 confiscated three German bearer bonds worth €5 million, along with foreign currency worth €117 000.⁹ Customs officials highlight various methods used to smuggle money, noting that travellers often conceal cash on their body (including in belts around the waist or underwear), pack it in luggage, or hide it in vehicle compartments.¹⁰

There have been repeated substantial recent seizures of cash along the Balkan route, an established pathway for smuggling heroin into Europe from Afghanistan via Iran and Turkey. For example, on 28 February 2023, a Turkish-registered lorry, travelling from the Netherlands to Turkey, was seized by Bulgarian authorities at the Turkish border with nearly €700 000 in smuggled currency hidden in the vehicle.¹¹ In March 2023, customs officers at the Kapitan Andreevo border checkpoint between Bulgaria and Turkey found undeclared currency worth the equivalent of approximately €1 million in three vehicles attempting to cross the border.¹² In March 2021, customs officials discovered the equivalent of €741 433 in four trucks at the same border checkpoint. The largest single find was €440 000 in a Turkish truck’s refrigeration unit.¹³ Two more Turkish trucks hid Bulgarian levs to the current value of around €205 000 in a refrigeration unit and driver’s dashboard drawer.

The Russia connection

Russia’s invasion of Ukraine has created additional challenges, ranging from capital flight via cash smuggling from both countries and the laundering of profits by organized criminals who are increasingly exploiting the vulnerabilities of Ukraine’s war economy. The Western Balkans is a natural destination for such flight, since illicit capital moves in and out of the region in every direction and on a staggering scale, enabled by an ecosystem of state capture, organized crime and a rampant shadow economy.¹⁴ Some of this capital flight takes place through airports. Belgrade and Istanbul remain key hubs for flights to and from Moscow and transit hubs for the Western Balkans.

Seizures at land borders, meanwhile, have been substantial. A month into the war in Ukraine, the wife of a former Ukrainian MP was allegedly caught by Hungarian border guards at a crossing for refugees carrying US$28 million and €1.3 million as she tried to enter the country.¹⁵ In another incident, an ex-general of the Security Service of Ukraine, accused of being a Russian collaborator, was detained at the border between Serbia and North Macedonia with €600 000 in cash, a large sum in US dollars, and emeralds and diamonds of an undisclosed value.¹⁶ In late 2022, two Ukrainians were detained at the Lesovo border crossing with Turkey trying to smuggle gold worth more than €0.5 million.¹⁷ On 3 March 2023, bundles of Ukrainian banknotes worth at least €0.8 million at the time (over 32 million Ukrainian hryvnia) were discovered in a passenger minibus traveling from Turkey to Moldova through Bulgaria.¹⁸

Running out of gas

In many countries, including EU nation states, if an individual carries cash exceeding €10 000 across a border, the money must be declared to a competent authority. In some cases, travelers are genuinely unaware of the rules, making it easier for cash smugglers to feign ignorance, at least when caught for the first time. Donors are working with countries in the region to increase awareness of the problem and strengthen technical assistance. For example, the EU, the Council of Europe and the German government have supported the Albanian customs directorate and state police in launching an awareness campaign to inform travelers about the rules on transporting money into and out of Albania. Donors have also provided a new high-tech luggage scanner as well as a team of dogs specially trained to sniff out cash in luggage as well as drugs.¹⁹

Some countries are also updating their legislation. For example, in September 2023 Bulgaria amended its criminal code introducing two new criminal offences aimed at strengthening the regulation of cash transportation across the national border. For a first offence, individuals failing to declare substantial amounts of cash, exceeding 140 times the Bulgarian minimum monthly wage, face imprisonment for up to five years and a fine equating to one-fifth of the undeclared amount.²⁰ Discoveries over this threshold will trigger a pre-trial investigation and enable law enforcement to seize the cash. This is a substantial change from the previous penalty, which imposed only civil fines for amounts exceeding €10 000. For a second offence, individuals face prison terms ranging from one to six years, and the cash would automatically be confiscated for use by the state.

The UK government has been working with countries in the region to highlight the problem and share lessons learned from its domestic experience, for example with non-conviction based civil forfeiture processes made possible by the Proceeds of Crime Act. This Act allows the state to take a civil forfeiture case to court with a lower burden of proof than that required for a criminal case. The state simply has to prove to the judge that on the balance of probabilities the cash in question has either derived from, or will be used in, criminal activity. Factors such as the manner of transport, size of seizure, concealment methods and legitimate income or lifestyle of the owner can all be considered as evidence in a civil case. It is worth understanding that the focus is on the property itself rather than against an individual. In this sense, cash is considered a smuggled commodity more than an illicit financial flow. This process is easier and faster than conviction-based confiscation, which usually requires that the predicate offence, in other words the illegal source of the funds, be proven.

Finally, under the UK’s Asset Recovery Incentivisation Scheme, law enforcement agencies that seize cash are allowed to keep a percentage of it to fund activities in their community and to help victims of crime. In the 2022/23 UK financial year, £339.1 million of assets were recovered from confiscation, forfeiture and civil recovery orders.²¹ ‘Money is the fuel that powers the engine of crime,’ notes a UK official engaged in promoting this model in South Eastern Europe. ‘We may not be able to take out all the drivers, but by confiscating the profits we can make the car run out of gas.’²²

However, in the absence of sufficiently complementary architecture or enforcement in the Western Balkans, the recent EU directive targeting cash smuggling could exacerbate the region’s own vulnerability. By creating riskier conditions for criminal operations internally, the new regulations may drive illicit activities away from the EU’s borders, most immediately towards the Western Balkans, unintentionally exacerbating instability on the bloc’s doorstep. Given the added dimension of illicit capital flight driven by the war in Ukraine, the EU, UK and South Eastern European countries all have a common interest in further extending cooperation on cash smuggling crackdowns beyond their borders.

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