The Covid-19 pandemic, which shook monetary markets and trigged financial chaos final 12 months, has heightened the danger of cash laundering and terrorist financing, fraud, cyber assaults, bribery and corruption throughout the monetary system, in line with the Central Financial institution of the UAE.
The abuse of e-commerce providers to hold out fraud, utilizing digital currencies for cash laundering, company fraud schemes, a surge in unlicensed money-service suppliers, and charity and disaster-related scams are a few of the tendencies which have emerged throughout the pandemic, the regulator mentioned in Typologies within the Monetary Sector, a report launched on Sunday.
The banking regulator chosen a number of monetary establishments to look at sure actions out there and requested them to actively interact with the authorities.
The dangers derived from the typologies recognized are along with the dangers of crimes associated to cash laundering and terrorist financing. These have already been outlined within the UAE’s Nationwide Danger Evaluation and are “more likely to be prevalent throughout the broader monetary sector”, the Central Financial institution mentioned in a separate assertion.
“This report is a part of our ongoing efforts to deal with cash laundering and terrorist financing-specific tendencies and typologies rising from the Covid-19 pandemic within the monetary sector,” mentioned Central Financial institution Governor, Khaled Balama.
“Though these dangers are nonetheless within the early phases of identification, the CBUAE, alongside the involved supervisory authorities, have launched this report as key reference on pandemic-related typologies and indicators to the monetary establishments, so they continue to be abreast of and be capable of mitigate these rising dangers, which finally contribute to safeguarding the integrity of the UAE monetary system.”
The report on pandemic typologies was ready by the Supervisory Authorities Sub-Committee, which is chaired by the Central Financial institution and consists of Abu Dhabi World Market, the Dubai Monetary Companies Authority, the Government Workplace for Anti-Cash Laundering and Countering the Financing of Terrorism (AML/CFT), and the UAE Monetary Intelligence Unit (FIU).
The UAE has launched strict measures to fight cash laundering and arrange a devoted company this 12 months to establish individuals accountable and people suspected of financing terrorists and organised crime. The Central Financial institution additionally commonly points tips on how monetary establishments can assess money-laundering dangers.
In July, the banking regulator issued tips governing the implementation of sanctions associated to AML/CFT. In August, it issued directions to registered hawala suppliers within the UAE and monetary establishments offering providers to them.
Earlier this month, the Central Financial institution requested monetary establishments, together with lenders, to develop inner insurance policies, controls and procedures to handle dangers linked to cash laundering.
The typology report will assist monetary establishments in figuring out Covid-related dangers and implement efficient mitigation strategies to maintain the monetary system wholesome, the Central Financial institution mentioned.
Among the many dangers recognized by the report is a possible enhance in the usage of skilled money-laundering providers. These use quite a lot of strategies, together with these that don’t require the bodily motion of money or items.
“Criminals who’ve beforehand relied on self-executed cash laundering schemes might now be looking for the assistance of PMLs,” the report mentioned.
The widespread lockdowns resulted in a major surge in e-commerce. Due to individuals’s restricted potential to maneuver funds and items throughout the pandemic, “illicit actors are turning to e-commerce as a money-laundering device”, the report mentioned.
Criminals can use faux digital storefronts that appear to be reliable retailers. They could additionally use “pass-through firms” or “transaction laundering” – illicit companies utilizing a reliable service provider’s platform to course of illicit funds.
“That is known as ‘cash laundering of the digital age’, which is extraordinarily tough for monetary establishments to detect,” the report added.
The Central Financial institution mentioned that the variety of “money-mules” used to launder ill-gotten funds additionally elevated, which is a direct results of monetary misery.
The usage of digital currencies can also be intensifying throughout the Covid-19 pandemic, as criminals incomes digital currencies illegally would finally search for methods to transform third-party proceeds into money or different belongings.
Different Covid-related dangers embrace elevated and unexplained cross-border fund flows to high-risk jurisdictions, terrorist organisations trying to elevate funds beneath the guise of Covid-related reduction actions, on-line exploitation of impoverished or financially distressed communities, and compelled labour.
“Citizenship by Funding schemes supplied by nations positioned within the Caribbean area pose potential financial-crime dangers to the monetary sectors within the UAE,” the report mentioned.
“Though CBI schemes could also be pursued for reliable functions, particularly visa-free entry to the EU, the UK and different nations, CBI schemes pose corruption, sanction, cash laundering and tax-evasion dangers.”
The rising reliance on know-how and distant working fashions have additionally uncovered digital vulnerabilities, as a result of phishing assaults, hacking, malware intrusions and fraud stemming from potential data breaches containing private knowledge, are on the rise.
“This is a vital issue to deal with the place paperwork containing confidential buyer and/or monetary data are shared between employees by way of a distributed work atmosphere,” the report mentioned.
“Organisations ought to put together for doable enterprise disruption and proactively assess their cyber-hygiene practices adopted by their distant workforce, enterprise-wide.”
Up to date: September nineteenth 2021, 2:34 PM