Financial Crimes Surged Amid COVID-19, Says FATF

Financial Action Task Force (FATF) speaks up about the adverse effects of COVID-19 on financial regulations. A recent report published by FATF states that money laundering and terrorism financing has spiked during the COVID-19 pandemic. 

COVID-19 pandemic has led the world to face many challenges and economic hardships. It has also created more opportunities for crimes due to depression in the economy. People are using illegal means to generate income and fulfill their basic needs. FATF has highlighted the money laundering and terrorist financing risks due to the COVID-19 in the past and has also laid out policies to take measures against such endeavors. 

FATF has now released an update on these policies in its latest report. FATF has done detailed research on 200 member countries including private and public sectors and after their inputs, they have released a report talking in detail about how the criminals have exploited this crisis. The case study also highlights how the risks have evolved and how authorities can deal with them. The crime cases include counterfeiting medical goods, cybercrime, investment fraud, charity fraud, and abuse of economic stimulus measures.

The paper also confirms FATF’s claim that there has been an increase in online purchases due to the lockdown. Physical bank branches are closed down temporarily and are providing services online. 

a great read..

COVID-19-related Money Laundering and Terrorist Financing Risks and Policy Responses ( COVID-19-related Money Laundering and Terrorist Financing Risks and Policy Responses ) https://t.co/XuyWLalaAN pic.twitter.com/PruVZFd122

— Dez Blanchfield – 13 days to 2021 (@dez_blanchfield) July 28, 2020

To eliminate the evolving risks, law enforcement authorities and affected industries must take a risk-based approach according to FATF’s standards. This means that they are required to reduce the money laundering and terrorism financing threats without affecting any financial services. The financial services must not be directed towards unregulated service providers.

Authority figures should explicitly discuss the national risks regarding regulatory situations. The report talks about the risks and policies and gives guidance on how different nations and their law enforcement authorities can address the issue.