The European Banking Authority (EBA) has told financial institutions to pay closer attention to transactions linked to international trade as the coronavirus pandemic provides opportunities for criminal groups to find novel ways to channel goods and illicit funds across borders.
As most economies are facing a downturn, financial flows are likely to diminish but the EBA says that based on experience from past crises, in many cases illicit finance will continue to flow.
New criminal opportunities
The authority says there is already some evidence of increased levels of cyber-crime, coronavirus-related frauds and scams targeting vulnerable people and companies, of fake fundraising campaigns and of criminal networks selling rationed goods at a higher price.
It also reckons that because criminals are highly adaptive, new techniques and channels of laundering money are likely to emerge.
High risk customers
The EBA is therefore advising credit and other financial institutions to continue monitoring transactions and pay particular attention to any unusual or suspicious patterns in customers’ behaviour and financial flows.
The authority says higher risk customer types include companies involved in international trade, cash-intensive businesses in the retail sector, and any type of shell companies in sectors facing the economic downturn that will keep a similar volume of financial flows in the absence of real economic activity.
The authority also wants credit and other financial institutions to remain alert to money laundering and terrorist financing (ML/TF) techniques that might change due to the economic downturn and where necessary, update their ML/TF risk assessments accordingly.
Categories: Trade Based Financial crimes News