20 April 2020, 12:15
20 April 2020, 12:15
As the world is in lockdown, Money launderers continue to work and are taking advantage of COVID-19. As there are now a few reports that criminals are taking advantage of the difficult situation it is worth to share our thoughts with you.
Risks that may arise due to COVID-19
– Work with unusual client or on unusual types of matter •
– Habits changing cash becomes contactless that brings an online payments increase
With less cash and more electronic payments.
– Resistance from a client regarding compliance with due diligence checks, for example being pressured to forego necessary due diligence checks or to “speed up” the process
– Working from Home for Compliance Departments can reduce security and performance but there is also a big chance for improvement.
– Patterns of money laundering are changing money muling and virtual currencies and assets are in high demand. Before Covid 19 nearly 2 trillion dollars were laundered globally, it will be no suprice ive this number increase rapidly. The impact on financial service compliance teams may differ from organization to organization and is also depending on how far the digitalisation is in their departments.
What authorities think:
Regulators and authorities responded to Coronavirus:
“illicit finance will continue to flow” and highly adaptive criminals are likely to emerge with “new techniques and channels of laundering money”.
it was monitoring the system and found certain emerging crime trends such as imposter scams, investment scams, product scams and insider tradingFinancial institutions should continue following a risk-based approach and diligently adhere to the Banking Secrecy Act (BSA) obligations.
“preparing for a shift in the risks that criminals may pose to the financial system and the community”. AUSTRAC found the following areas of criminal exploitation where the financial system may be more vulnerable during the COVID-19.
“The FATF to use the flexibility built into the FATF’s risk-based approach to address the challenges posed by COVID-19 whilst remaining alert to new and emerging illicit finance risks,”
Covid-19 Pandemic & Money LaunderingGet access
Eliminating ML/FT risk in the UAEGet access
Financial institutions rely on outdated and inefficient software to handle their compliance needsGet access