The Week Of: May 4, 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.
FATF examines COVID-19-related money laundering and terrorist financing risks
Government measures designed to mitigate financial distress for citizens amidst the COVID-19 pandemic have provided new opportunities for criminals and terrorists to generate and launder illicit proceeds, says a new report by the Financial Action Task Force (FATF).
According to the FATF, the historic amounts of money doled out to businesses and individuals, much of it done online, have led to increases in fraud and cybercrime.
Predicate crimes like human trafficking and exploitation of workers, online child exploitation, and organized property crime may have risen as well.
The report also found that the pandemic is making it difficult for governments and the private sector to implement AML/CFT measures.
“The majority of FATF members indicate that their AML/CFT onsite inspections have been postponed or substituted with desk-based inspections (including the use of video conferencing),” the report said. “In some instances, onsite inspections are only conducted for high-risk sectors or entities.”
“Some supervisory authorities have indicated that they have provided risk-based flexibility on the filing of annual reports,” it continued, “and have delayed issuing new licenses, particularly for some sectors that may have been shut down, such as casinos (excluding online casinos). Regarding sanctions and other remedial actions, a number of countries have introduced suspensions on decisions, including imposing monetary penalties for AML/CFT violations. Registering new companies in registries is also delayed.”
Canadians have lost more than $1.2 million to COVID-19 scams; BBB experiencing 40% increase in scam reports amid pandemic
The Canadian Broadcasting Corporation (CBC) recently found that Canadians have lost more than $1.2 million to scammers taking advantage of the COVID-19 pandemic.
The scams run the gamut from impersonation of government officials and health organizations to phishing attempts that have victims handing over their personal information to criminals.
In one such scheme, victims received messages telling them they were exposed to someone who tested positive for COVID-19. They were then asked to fill out what looks like an Excel form, but when users clicked to enable the content and view the form, it infected their computers with a Trojan downloader that installed malicious files.
In the U.S., the Better Business Bureau (BBB) said they were seeing a 40% increase in scam reports during the pandemic.
“We are just being deluged with consumer complaints. We’ve never seen anything like it before,” said Steve McFarland, CEO of the BBB of Los Angeles.
EU to beef up scrutiny of money-laundering risks
The European Commission may create a new body to help police financial crime and monitor banks more strictly, according to Reuters.
The Commission aims to give the European Union more powers to tackle financial crimes within the bloc after a series of highly publicized scandals in Estonia, Latvia, Malta, Cyprus, and the Netherlands dented its reputation.
The proposed supervisory body would be tasked with tasked with “carrying out supervision of clearly defined obliged entities or types of activities for a given period of time” and may include a financial intelligence unit to identify suspicious international transactions.