The COVID-19 outbreak continues to have a devastating economic and social impact around the world. Governments are making great efforts to recover from the crisis caused by the epidemic. In this process, there is an extraordinary activity, especially in health, and their governments continue to work and help in health. Meanwhile, criminals continue to take advantage of this situation by carrying out fraudulent activities related to medical and preventive health inventories.
At this point, the full and effective implementation of the FATF Standards is of critical importance. Countries should prevent and reduce the crime risks associated with the pandemic. It is vital to adopt a risk-based approach that ensures that funds, especially in healthcare, reach those in need. Financial Action Task Force (FATF) Plenary also continues to work on this subject under the current conditions.
FATF's Response to ML / TF Risks Against COVID-19
The effects of the COVID-19 pandemic have not yet been prevented, and this situation is causing social and economic deterioration worldwide. In addition to the effects of this epidemic on humans, it is clear that some criminals are trying to take advantage of this situation. Some crimes benefited by criminals are as follows; adapted cybercrime fraud, medical equipment fraud, investment fraud, and abuse of economic stimulus measures. These crimes are the main evidence that criminals are actively exploiting the COVID-19 crisis. In addition to these crimes, experts indicated that criminals might also find ways to take advantage of the inevitable increase in unemployment, increases in remote transactions, and accelerated implementation of incentive programs in the coming months.
Therefore, jurisdictions must identify, evaluate, and understand how criminals and terrorists can exploit the pandemic. However, according to a study conducted on the FATF Global Network, the pandemic is seriously affecting some authorities' ability to detect, prevent, and implement investigation measures against money laundering and terrorist financing. Countries will fully and effectively implement the FATF Recommendations to prevent and reduce these risks. Moreover, countries should take a risk-based approach to ensure that their measures are commensurate with the risks of money laundering and terrorist financing. One of the FATF priorities is further to increase cooperation with FATF-Style Regional Bodies (FSRBs) to improve the implementation of the FATF Standards across the Global Network.
What Is The Impact of COVID-19 on FATF Mutual Assessment and Follow-up Processes?
In April 2020, FATF decided to postpone the assessment and follow-up dates for countries due to the COVID-19 outbreak. Although six months have passed, the crisis's current position continues to affect these evaluations and follow-up processes. Countries' situations, reactions, and travel restrictions are the main factors affecting this situation all over the world. In addition, the continuity of the impact of the COVID-19 pandemic is still uncertain. On the other side, FATF is determined to evaluate the effective implementation of its standards. Delegates held last month also discussed how to continue efforts to identify and respond to high-risk jurisdictions or jurisdictions that have strategic weaknesses in anti-money laundering and terrorist financing measures when COVID-19 measures prevent on-site visits and meetings of regional review groups.
Delegates decided to carry out flexible procedures consistent with mutual evaluation procedures allowing on-site visits when required. These measures will ensure that this process, which forms the basis of the FATF's work, continues in the current circumstances, with the result that the Delegate stated that they could virtually carry out certain aspects of the on-site visit or postpone on-site visits if necessary.
Jurisdictions Under Increased Monitoring
Increasingly supervised jurisdictions work actively with Financial Action Task Force (FATF) to combat money laundering and financing of nuclear proliferation, as well as to address strategic shortcomings in their regime. Suppose the FATF puts a jurisdiction under increased monitoring. In that case, it means that the country is committed to resolving identified strategic shortcomings rapidly within agreed time frames and is subject to further monitoring. Besides, this list is often referred to externally as a 'gray list.' FATF and FATF-style regional bodies (FSRBs) continue to work with the jurisdictions we have outlined below and reported progress in addressing identified strategic shortcomings.
As FATF focuses on the impact of the COVID-19 pandemic, in October provided an option for countries to report on the actual Delegate. Ghana, Albania, Cambodia, Botswana, Mauritius, Zimbabwe, and Pakistan have reported on this option. It has delayed reporting in some countries. These countries are Uganda, Barbados, Myanmar, Jamaica, Nicaragua, and Panama.
Jurisdictions with strategic deficiencies
Barbados, The Bahamas, Botswana, Albania, Cambodia, Jamaica, Zimbabwe, Ghana, Panama, Nicaragua, Pakistan, Mauritius, Syria, Myanmar, Uganda, Yemen.
Jurisdictions no longer subject to monitoring