FATF – COVID-19-RELATED MONEY LAUNDERING AND TERRORIST FINANCING: RISKS AND POLICY RESPONSES

FATF has published a document which identifies challenges, good practices and policy responses to new threats and vulnerabilities arising from the crisis.  The document is based on papers shared among FATF and FATF-style regional body members in April.  The document stresses that it does not constitute the official view of FATF, and the measures involved have not been reviewed or considered by FATF members as a whole.  The document lists identified threats and vulnerabilities as:

  • Criminals finding ways to bypass CDD measures by exploiting temporary challenges in internal controls caused by remote working situations, in order to conceal and launder funds;
  • Increased misuse of online financial services and virtual assets to move and conceal illicit funds;
  • Exploiting economic stimulus measures and insolvency schemes as a means for natural and legal persons to conceal and launder illicit proceeds;
  • As individuals move money out of the banking system due to financial instability, this may lead to an increased use of the unregulated financial sector, creating additional opportunities for criminals to launder illicit funds;
  • Misuse and misappropriation of domestic and international financial aid and emergency funding by avoiding standard procurement procedures, resulting in increased corruption and consequent ML risks; and
  • Criminals and terrorists exploiting COVID-19 and the associated economic downturn to move into new cash-intensive and high-liquidity lines of business in developing countries, both for the laundering of proceeds as well as to fund their operations, as well as fraudulently claiming to be charities to raise funds online.

The document also provides links to various guidance etc produced by authorities worldwide.

https://www.fatf-gafi.org/media/fatf/documents/COVID-19-AML-CFT.pdf

 

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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