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The FATF has warned that the Coronavirus outbreak has caused unparalleled challenges in the economy and led to a rise in Coronavirus-related crimes, including fraud, cybercrime, misdirection, or exploitation of government funds.
Economic uncertainty ‘a breeding ground for fraud and financial crime’ https://t.co/wr14vVgcQX
— The Shift News (@TheShiftNews) May 18, 2020
The FATF published a paper on financial crimes and money laundering risks that mentions a list of hazards related to financial crimes that come out during such a time of calamity. According to the paper, this new virus is creating new sources of proceeds for illegal criminals.
According to the report, since financial crime supervisors had to redivert their attention at other places, financial sectors are now in a more exposed, vulnerable state. This crisis is affecting the government and the private sector’s ability to enforce anti-money laundering regulations, according to the FATF.
The FATF states: “These threats and vulnerabilities could result in criminals finding ways to bypass customer due to diligence measures and increase misuse of online financial services and virtual assets to move and conceal illicit funds.”
The paper also looks into possible policy amendments that the authorities can consider in dealing with the issue. The FATF mentions the importance of domestic coordination to analyze the effect of the epidemic. It also proposes suggestions for strengthening communication with the private sector and promoting electronic and digital payment solutions.
The international financial aid and emergency funding are also being misused. The financial terrorists are taking advantage of the crisis to get into new cash-intensive and high liquidity lines of business in developing countries.
The outbreak is providing the perfect atmosphere for cybercrime. The experts alerted that, after the pandemic, new types of fraud may emerge and, money laundering and terrorist financing may be adapted to the restrictions placed on individuals and businesses.