Illicit financial flows will be easier during the coronavirus pandemic


As the world continues to experience uproar and fear caused by the coronavirus, international criminal organizations have now taken advantage of the situation to exploit new ways of committing financial crimes. This is because they realized that regulators and police are currently focused on dealing with the health and economic impact of the virus. The world is set to witness a significant increase in corruption and financial crimes except the governments and concerned institutions take strategic actions to fight them. One of the major factors that will fuel this increase is the way governments release huge funds to curb the spread of the virus without ensuring transparency in the use of the funds. A lot of the funds are misallocated giving rooms for fraud, corruption, bribery, and misappropriation. Criminal organizations will use the opportunity to launder money and transfer it using international financial institutions as a means to ensure the continuity of their supply chain.

As the spread of the virus continues to grow, regulators in Canada, Australia, and the United States have realized how difficult it will be for banks and other financial institutions to carry out due diligence and oversight activities on their customers. Right now, police and regulations worldwide are compelled to shift focus from cases not related to coronavirus and give little attention to other cases like homicides, and murder investigations. Countries like Mexico and Canada have made vital decisions that allow them to run without strict adherence to rules. Regardless of the pandemic, much can be achieved if authorities encourage banks and other financial institutions to ensure due diligence and develop new measures to ensure compliance with anti-money laundering acts even as they work from home.

Another important way to prevent illicit transaction and cash flows is to place strict rules against anonymous corporate ownership. The United States, among other countries, facilitates money laundering from anonymous ownership; a lot, which comes from enabling Shell companies and foundations. To prevent a rising occurrence of frauds, and abuse of funds, authorities need to pass bills against such. Also, and most importantly, governments in developed nations need to ensure transparency, accountability, and anticorruption priority matters in the disbursement of relief funds at this period.