The coronavirus (COVID-19), which appeared in Wuhan, the capital of China's Hubei region, in December 2019, has spread to the whole world in a short time. COVID-19 not only caused a crisis in the field of health, but it also caused a crisis in all sectors. One of the sectors affected by COVID-19 is the Finance sector. Criminals have taken advantage of the COVID-19 pandemic crisis process and attempted to commit crimes such as cyber fraud, money laundering, and terrorist financing. FATF, EU, and local AML regulators warned companies against increased financial crime risks in the COVID-19 crisis and advised them to tighten the measures.
During the COVID-19 pandemic, most businesses switched to the home office working model. This home office working model led to the disregard of some business processes. As a result of this, it led criminals to bypass some processes in their favor. Especially during the pandemic period, new businesses emerged in the medical products and disinfectant product categories. Front companies started to make fictive transactions by establishing new businesses for money laundering.
Increase in Financial Crimes During the COVID-19 Crisis
Fraud cases increased, especially frauds realized by seizing the information of consumers through social engineering and phishing increased, sales of counterfeit products increased, and likewise, frauds emerged through requests for donations and aid were also increased. In addition, operational delays were experienced in suspicious transaction reports due to the home office working model. Although the world is in the midst of a crisis, AML compliance must not fail. AML failures are heavily punished by regulators.
As Sanction Scanner, we have prepared the "Expected Changes in AML After COVID-19" report with the support of many AML experts around the world. In this report, which we believe will benefit the sector, experts emphasized that companies must improve their financial crime-fighting and compliance processes against these risks.
"In this e-book project, we have compiled the views of AML experts from all over the world about the "Expected Changes in the AML after COVID-19". As the Sanction Scanner, we wish to overcome the COVID-19 outbreak as soon as possible. We are ready to make sacrifices to support all parties that related AML during and after this pandemic. Do not hesitate to contact us."
Fatih Coşkun / CEO at Sanction Scanner