The Financial Action Task Force (FATF), the global standard setter for AML/CFT, released a statement addressing COVID-19 related financial crime risks and methods to address the risks.
Criminals taking advantage of the pandemic have used a variety of methods: counterfeit medicines, fraudulent investment or tax schemes, fake fundraising, and phishing and cyber attacks as a result of increased home working.
FATF states that governments must remain vigilant and maintain supervision over ML and TF. However, the FATF recommendations include some flexibility to use simplified due diligence and digital verification where appropriate. FATF also encourages national authorities to ensure a risk-based approach is followed with enhanced controls to ensure legitimacy and transparency to continue to permit charitable donations and transactions in/with higher risk countries.
FATF is working with the Committee on Payment and Market Infrastructures and the World Bank to help coordinate policy responses.
FATF encourages governments to work with financial institutions and other businesses to use the flexibility built into the FATF’s risk-based approach to address the challenges posed by COVID-19 whilst remaining alert to new and emerging illicit finance risks. The FATF encourages the fullest use of responsible digital customer onboarding and delivery of digital financial services in light of social distancing measures.