02 Apr 2020
The FATF (Financial Action Task Force) has issued a statement highlighting the need for financial institutions to stay alert to potential financial crime risks as criminals and terrorists seek to exploit coronavirus-related fears.
“Criminals are taking advantage of the Covid-19 pandemic to carry out financial fraud and exploitation scams,” it said.
This includes crimes related to counterfeit medicines, fraudulent investment opportunities, phishing schemes, cybercrimes, fundraising for fake charities, and various medical scams targeting innocent victims, with criminals “attempting to profit from the pandemic by exploiting people in urgent need of care and the goodwill of the general public.”
Like criminals, terrorists may also exploit these opportunities to raise funds, it says.
As such, supervisors, financial intelligence units and law enforcement agencies should continue to share information with the private sector to prioritise and address key ML (money laundering) risks, particularly those related to fraud, and TF (terrorism financing) risks linked to Covid-19.
According to the FATF, criminals and terrorists may seek to exploit gaps and weaknesses in national AML/CFT systems, under the assumption that resources are focused elsewhere. This makes risk-based supervision and enforcement activity “more critical than ever.”
Financial institutions and other businesses should remain vigilant to emerging ML/TF risks, and ensure they continue to effectively mitigate these risks, and detect and report suspicious activity.
Governments are encouraged to work with financial institutions and other businesses to use the flexibility built into the FATF’s risk-based approach to address the challenges posed by Covid-19.
In this regard, the FATF encourages “the fullest use” of responsible digital customer onboarding and financial services delivery, as well as contactless payments, in light of social distancing measures to reduce the risk of spreading the virus.
Read more at Regulation Asia
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