The Week Of: April 27, 2020
This week’s news and stories of interest to the AML community. If you prefer a news roundup sent to you, subscribe to our weekly newsletter.
Europol assesses criminal landscape post-coronavirus
In a new report, Europol assesses the impact of the COVID-19 pandemic on serious and organized crime in the European Union across three phases: the current situation, a mid-term outlook, and the long-term impact.
Phase one focuses on immediate impacts, specifically cybercrime, fraud, and counterfeiting, which have all spiked.
Phase two sees criminal activity returning to previous levels and returning to pre-pandemic activities as lockdown measures ease; however, new opportunities for criminal activity may have been created that will extend beyond the current crisis.
Finally, phase three examines organized crime’s adeptness at extracting long-term gains from crises, including making hard-hit communities more vulnerable to certain criminal offers, such as engaging in loan-sharking, extortion, and racketeering.
While acknowledging that changing circumstances makes the entire impact of the pandemic not yet fully apparent, Europol notes that other law enforcement agencies should be prepared to respond to warning signals in both the physical and virtual worlds.
Pandemic disrupts wildlife trafficking, for now
The Wildlife Justice Commission, an international organization dedicated to dismantling illegal wildlife trade, said that efforts to reduce the impact of the COVID-19 pandemic have reduced trafficking, but warned that high-level criminal networks are “gearing up” to increase operations.
Shutdowns around the world and travel restrictions designed to contain the outbreak have also slowed organized crime networks that traffick wildlife, according to the group’s analysis. Intelligence collected indicated that traders in Asia, a major hub, had difficulties accessing China’s markets to sell their stock.
These challenges have led to a stockpiling of items such as ivory and pangolin scales. They have also altered transportation methods—moving stock by plane has been impacted due to security measures on air transport.
But any limits on the illegal wildlife trade as a result of the pandemic will most likely be temporary as “[t]here’s too much money to be made from these products, and there’s too many people involved for this to have a significant long-term impact,” said Sarah Stoner, a co-author of the WJC report.
Dirty money piling up in L.A. as coronavirus cripples international money laundering
The shutdown of non-essential businesses in the U.S. has had a devastating impact as millions of people have lost jobs and filed for unemployment and the economy suffered its worst contraction since the Great Recession.
The closed economy has also led to a problem for some organized crime groups: complex schemes that drug traffickers use to move money in and out of Southern California have come to halt, leaving federal agents to seize large volumes of cash that are piling up.
The trade-based money laundering scheme known as the black market peso exchange depends upon businesses that can move goods to retailers in Mexico or South America. With storefronts now closed and nowhere to put their cash, traffickers are using older and riskier methods to move money, making it easier for the feds to seize it.
The pandemic is also upending fentanyl-based money laundering schemes as the chemical is mostly made in Wuhan, China, the epicenter of the coronavirus outbreak.