Covid-19 Pandemic Could Lead To Money Laundering Risks

Last week, the Financial Action Task Force (FATF), published a report on the COVID-19 related money laundering and terrorist financing risks and policy responses.

The report found that there was an increase in Covid-19 related crimes which include fraud, cyber crime, misdirection or exploitation of Government funds or international financial assistance. Covid-19 has impacted the criminal world, however, they’re adapting their behavior which is helping them to proceed from their crimes.

Naturally, the pandemic is distracting everyone, as we all work together to adhere to the Government guidance and adapt to the new ‘normal’. This has opened the door for criminals as they’re aware that the Government and those in the private sector’s abilities to implement anti-money laundering and counter terrorist financing obligations from supervisions, regulation and policy reform. This means that some suspicious transactions, that may ordinarily be flagged up, could be slipping under the radar, due to reduced due diligence.

The report continued to outline the risks, threats and vulnerabilities currently emerging regarding money laundering and terrorist financing. These risks include:

  • Criminals may exploit vulnerabilities caused by remote working to get around CDD measures;
  • There may be more misuse of online financial services and virtual assets to launder money;
  • Economic stimulus measures and insolvency schemes could be used to hide and launder illicit funds;
  • Use of the unregulated financial sector may increase;
  • There may be more opportunities for the misuse and misappropriation of financial aid and emergency funding, meaning increased corruption and ML risks;
  • Criminals taking advantage of an economic downturn to move into new lines of business to make and launder money

In these uncertain times, it’s more important than ever to ensure you don’t allow criminals to profit from your firm. It’s imperative you continue to follow the Anti-Money Laundering rules and use electronic ID checks appropriately.

The full report is available to read here.

Today's Conveyancer