The Wall Street Journal reports on the cocaine boom taking place in Europe.  As revenues increase due to the selling of cocaine, drug traffickers are handling more and more cash in Euros.

To wash it, the traffickers must take various steps to clean up its tracks.

From the Wall Street Journal:

The first step is to convert small bills accumulated from thousands of street sales into €500 notes, which are easy to transport. Obtaining large quantities of these conspicuous notes, though, isn’t easy. So drug traffickers turn to specialized criminal rings — whose members are often involved in banking and real estate — to gain access to them, says José Manuel Álvarez Luna, chief of the money-laundering section of the Spanish police.

‘Bin Ladens’

Spain is the center for such aggregation, according to authorities. A high-level Spanish banking official says a disproportionate share of the euro zone’s €500 notes, known as Bin Ladens for their scarcity, circulate in Spain.

The purpose of money-laundering is to disguise the criminal origins of ill-gotten gains so the funds appear legitimate. In most cases, laundering also helps criminals escape the notice of tax collectors and law-enforcement officials, boosting the value of their illegal proceeds.

Particularly since 9/11, tightened antilaundering regulations, known by banks as “know your customer” rules, have forced drug cartels to use more circuitous routes to circulate their funds around the globe.

For starters, the drug cartels do not themselves bring their narco-euros to the U.S. Instead, they usually sell their euros to South American black-market currency brokers or to foreign-exchange houses, known in Spanish as casas de cambio. The casas’ business as currency-exchange houses gives them a natural cover for moving large amounts of cash.

But in South America, there are few if any legitimate buyers for the huge sums of euros that the casas obtain — directly or indirectly — from the traffickers. So the casas funnel most of the narco-euros, sometimes via middlemen, through a chain of exchange houses in countries like Colombia, Peru, Brazil and Chile, says the DEA’s Mr. Semesky.

Often, the drug traffickers will sell their euros for Colombian pesos, and then the euros entering the U.S. no longer belong to the drug cartels but to the casa de cambio. In other cases, says Mr. Semesky, traffickers pay the casas to move funds into one of their U.S. bank accounts. These funds aren’t usually intended for withdrawal, but rather to pay various debts. This is achieved by wiring funds to the account of whomever the trafficker wishes to pay.

Globally, the Cocaine Market is valued at $70.45 billion, with 14.3 million people using the drug.