On December 16, the Financial Action Task Force (FATF) released an update to the report of COVID-19-Related Money Laundering and Terrorist Financing Risks.
The report was first published in May 2020 and highlighted COVID-19-related money laundering and terrorist financing (ML/TF) threats and policy responses. It pointed out that investment fraud, cybercrime, and other predicate crimes mounted during the pandemic, and so did the risks of corruption and abuse of international financial assistance, which led to changing financial behaviors and increased ML/TF risks. The report called on countries to take actions to strengthen domestic coordination, enhance communication with the private sector, and take a risk-based approach to customer due diligence, so as to jointly mitigate the impact of the pandemic on the anti-money laundering and counter terrorist financing (AML/CFT) system.
The updated report confirms the concerns expressed in May: significant increases in online transactions, ever-changing financial behaviors, and job losses and business closures, which intensified financial volatility and economic contraction. Based on the input of over 200 countries and regions, the report studies into a selection of cases to illustrate how the ML/TF risks have evolved as the pandemic progressed, as well as how the countries and regions have responded. It is suggested that the supervisors and the private sector take a risk-based approach, as required by the FATF Standards, to control ML/TF risks, while ensuring regular financial services. Additionally, the FATF will continuously monitor ML/TF risks amid the pandemic and issue timely updates. It will maintain close cooperation with FATF observers and the FATF-Style Regional Bodies (FSRBs), in a joint effort to tackle the risks and challenges posed by COVID?19.
(Report link:http://www.fatf-gafi.org/publications/fatfgeneral/documents/updated-covid-19-ml-tf.html)
