FATF COVID-19 related Money Laundering and Terrorist Financing Risks and Policy Responses
By Hourad Afsar
COVID 19 has created unprecedented global challenges, deepening worries and anxiety by causing an unexpected economic slowdown and disturbance in many industries. This has also led to an increase in COVID-19-related crimes including but not limited to fraud, cybercrime or misdirection of government funds.
The Financial Action Task Force (on Money Laundering) (FATF) has issued this paper identifying challenges, best practices and policy responses to new money laundering and terrorist financing threats and vulnerabilities arising from the Coronavirus crisis, impacting government and private sectors' abilities to implement AML/CTF obligations.
This crisis represents emerging money laundering (ML) and terrorist financing (TF) risks which could result in:
Criminals bypassing customer due diligence measures;
Higher misuse of online financial services and virtual assets to move and conceal illicit funds;
Economic stimulus measures exploitation and insolvency schemes as a means to conceal and launder illicit proceeds;
Increased use of the unregulated financial sector;
Misuse and misappropriation of domestic and international financial aid and emergency funding;
Criminals move into new cash-intensive and high-liquidity lines of business in developing countries.
An effective AML/CFT policy responses could help support the swift and effective implementation of measures to respond to COVID-19 by including:
Domestic coordination to assess the impact of COVID-19 on AML/CFT risks and systems;
Strengthened communication with the private sector;
Encouraging the full use of a risk-based approach to customer due diligence;
Supporting electronic and digital payment options.
COVID-19 related Money Laundering and Terrorist Financing Risks and Policy Responses- PDF Document