FATF Urges Member Countries To Lead by Example in Implementing Travel Rule

Richard Marley
July 01, 2022
3 minutes read
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The global financial watchdog FATF has urged countries to implement the travel rule in the legislation following the incomplete progress report

According to the Financial Action Task Force (FATF), 11 out of the 98 jurisdictions that responded have begun enforcing their anti-money laundering and counter-terrorism financing (CFT) criteria.

A report on the “Implementation of the FATF Standards on Virtual Assets and Virtual Asset Service Providers” was released on Thursday. It focused on adding the new principle that stated, In order to comply with the Travel Rule, the “great majority” of jurisdictions evaluated by the organization’s Global Network since June 2021 “still require considerable or moderate improvement.”

The FATF said that nations working to put these criteria into effect made “minimal progress” over the past year, with 29 out of 98 jurisdictions that responded reporting drafting legislation relating to the Travel Rule and 11 beginning enforcement.

A new FATF report on virtual assets finds only 29 out of 98 jurisdictions have passed the FATF ‘travel rule’ to ensure crypto firms verify who their customers are. FATF members should lead by example & introduce relevant legislation ASAP.

See the report➡️https://t.co/PWbaOMtNfJ pic.twitter.com/hHpALXiIJv

— FATF (@FATFNews) June 30, 2022

As per the global financial watchdog, “While around a quarter of responding jurisdictions are now in the process of passing the relevant legislation, around one-third (36 out of 98) have not yet started introducing the Travel Rule, This gap leaves VAs and VASPs vulnerable to misuse, and demonstrates the urgent need for jurisdictions to accelerate implementation and enforcement.”

The firm further added that the organisations of the private industry had made advancements in adding new solutions to back the compliance with the travel rule and applying these early steps ensures interoperability with other solutions. However, FATF hinted about The “high threat of ransomware operators utilising VAs to enable payments” and channelling illegal cash through Virtual Asset Service Providers, also known as VASPs, to suggest that these solutions be put into place as soon as possible.

The official statement regarding the travel rule by FATF stated: “Countries that have not introduced Travel Rule legislation should do so as soon as possible, and FATF jurisdictions should lead by example by promoting implementation, and by sharing experiences and good practices, Rapid implementation by jurisdictions will incentivize progress further.”

Under the guidelines of the FATF, VASP operations in defined jurisdictions need to be registered. The organisation reported in its previous April update that only 120 countries which are not even half of the assessed jurisdictions had complete laws and regulatory standards in place. For the assessment of the threats and verification of the beneficial owners of companies, the firm has also recommended prioritizing the detecting and reporting of data in the crypto transactions.

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Talent Acquisition Fraud - Hiring Legitimate Candidates with Identity Verification
Along with the rise in virtual and remote work, the number of cases of recruitment fraud is increasing at an unprecedented pace, urging authorities to take decisive action against criminals. Especially the pandemic resulted in huge mass layoffs giving setbacks to many sectors, ultimately creating massive inflation across the globe.

Now that the pandemic’s effects are diminishing, 97 million new job roles are to be expected by the next year, which will expedite fraudulent practices in the talent acquisition sector. Companies should be on their guard and implement a joint action plan to counter rising recruitment scams to secure their onboarding process.

How do Online Recruiting Scams Work?

The scammers fraudulently use an established company’s name, logo and even the details of real employees working in human resource departments to post jobs on recruiting websites or other social media platforms.

Keeping their credentials almost identical to the official company’s details, they send emails to job-seekers or post fake jobs. As soon as interested candidates apply, they conduct interviews to get sensitive information about candidates through telephonic or on-site interviews.

Through fake interviews and telephonic/email conversations, criminals ask for sensitive personal information, particularly social security, ID number and bank account details that job seekers often provide, paving the way for identity fraud.

In some cases, the scammers even seek money from the candidates in the name of background checks or certifications which directly cost them financial losses. In the US alone, users lost $86 million due to fake job opportunities posted on the internet.

Spotting the Signs of Recruitment Fraud

Recruitment fraud is the most unfortunate part of modern job hunting, where criminals prey upon candidates’ eagerness to find work for their living by creating scam job opportunities.

Here are a few signs that can help job seekers spot fraudulent elements during the recruitment process:

Legitimate hiring managers and employers never ask applicants to make any financial transaction in their personal or company account. Always say No to any person who is asking you to send money for any recruitment purpose.

Although the majority of companies ask the candidates to provide their personal information, this step usually comes when the recruitment process is near to complete. Any person asking for sensitive information like bank account details, social security number, date of birth or identity details could be a scammer who must be turned down.

The majority of companies recruit their employees using their official email accounts; rather than contacting the person through common numbers or email addresses. Any job letter/offer from any such account could be a fake one.

Legitimate recruiters always follow a comprehensive plan to get all the relevant information about the candidate. Any person offering you a job without following a standard hiring process raises suspicions.
High Profile Criminal Cases of Recruitment Fraud

After the Russian invasion of Ukraine, petrol prices ballooned worldwide, increasing inflation and the number of desperate job seekers. Through fake job postings, criminals exploit such individuals and get involved in recruitment fraud.

Several cases of talent acquisition fraud have been witnessed in the recent past encouraging global law enforcement authorities to take firm action against them. Let’s have a look at some of the high-profile cases:

1. Europol Arrested a Gang Involved in €20 Million Employment Fraud

In 2021, law enforcement authorities of the European Union dismantled a gang which was involved in an employment scam. The criminals were offering fake jobs in the construction sector to labourers while demanding an initial fee to pay.

It has been estimated that they illegally stole €20 million from the people in a few years, urging authorities to take strict action against them after the victims filed multiple complaints. The case is still in court, where their penalties are yet to be decided.

2. Hampton Gang Member Convicted for Pandemic Employment Fraud

Law enforcement authorities in the US have arrested a criminal for his involvement in a pandemic-related employment fraud. The Police have also stated that the criminal has a whole gang behind him, and they are trying to bring them under the law as well.

As per the investigation, the criminal was taking money from people to get jobs for them by submitting fake documents to various companies. The court has sentenced him to 27 months in jail and vowed to take down the whole gang working behind him.

Talent Acquisition Fraud and the Role of Law Enforcement Authorities

Due to the rising cases of recruitment scams across the globe resulting in financial losses of millions of dollars, law enforcement authorities of various jurisdictions are taking stringent action against criminals.

1. FBI Issued Instructions to Avoid Employment Scam

Federal Bureau of Investigation (FBI) has warned people to beware of cyber criminals using fake job listings to target applicants’ Personally Identifiable Information (PII).

FBI has instructed the common people to only apply for jobs through the official channels of companies and not pay attention to any emails, phone calls or messages received through unofficial accounts.

Employment fraud has been termed as a potential crime by the FBI, costing US citizens $59 million in 2020. The authorities have also instructed citizens not to provide any sensitive personal details like bank accounts, social security or identification number to any job recruiter through emails or phone calls.

2. UK Government – Raising Awareness of Employment Scams

The UK government has also taken drastic steps to guide their citizens about employment scams and how to avoid them. It has been strongly recommended that people apply for jobs only through the official portals or companies’ websites.

In their detailed guidance, the government has also guided job seekers to verify any email, phone call or message through certain checks, including verifying all details from the company’s websites.

It has also been instructed to the people not to proceed with any job application asking for money or any other personal details from you and not even open any spam link attached to the email.

How Shufti Pro can Help

With transforming technologies, the overall market is growing to produce more job opportunities for interested candidates. As per the surveys, this number is expected to grow in the coming years, increasing recruitment fraud risks.

Through talent acquisition scams, criminals not only defraud job seekers but also damage the reputation of established companies. So it is in their higher interest to find and implement a credible solution that efficiently mitigates the risks of stolen identity or credentials.

Shufti Pro’s identity verification services present an ideal option to counter this problem through its advanced identification features, including document authentication, facial recognition and address verification.

Want to learn more about identity verification services for eliminating recruitment fraud?

Connect with a KYC Expert

FATF Urges Member Countries To Lead by Example in Implementing Travel Rule

How Much Have Australians Lost to Scams?

How do Online Recruiting Scams Work?

Spotting the Signs of Recruitment Fraud

High Profile Criminal Cases of Recruitment Fraud

1. Europol Arrested a Gang Involved in €20 Million Employment Fraud

2. Hampton Gang Member Convicted for Pandemic Employment Fraud

Talent Acquisition Fraud and the Role of Law Enforcement Authorities

1. FBI Issued Instructions to Avoid Employment Scam

2. UK Government – Raising Awareness of Employment Scams

How Shufti Pro can Help

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