As the outbreak of the coronavirus continues to affect the economy, criminals keep taking advantage of the situation to carry out their illicit acts. According to the European Banking Authority, during periods like this, criminal activities increase. Supervisory Authorities in the EU have reached out to financial institutions about the rise in criminal activities relative to the spread of the virus. Already, there is a rise in cybercrime and the trading of counterfeit goods. Also, in the United States, the Financial Crimes Enforcement Network (FinCEN) is keeping a close look at emerging fraud techniques. Investment scams, products scams and insider trading have been identified as common crimes during this period.
Besides criminal groups, corrupt officials and businesses are equally using this period to exploit people. This is possible due to the deficiencies in the anti-money laundering systems of several nations. Criminals are more likely to keep using their techniques to launder money and commit more crimes since they know countries are paying attention to something else.
Due to the outbreak of COVID-19, it has become practically impossible for financial institutions to completely adhere to the anti-money laundering Act. This mostly concerns the reporting of suspicious transactions and due diligence requirements. Canada and Australia have already cut down their expectations that financial institutions will comply during this time. Also, the Bahamas has temporarily suspended its Register of Beneficial Ownership Act 2018 due to COVID-19. The Financial Action Task Force (FATF) has, therefore, advised financial institutions to adopt the use of technology such as Fintech Regtech, and Suptech as much as possible.
Owing to the disbursement of a huge sum to fight the pandemic, Transparency International has called on World Bank, the G20, and IMF to ensure transparency when disbursing and managing funds.
Financial institutions are, therefore, advised to keep their eyes open for a possible traditional approach to money laundering.
