The importance of allocating sufficient resources to AML/CFT regimes during the COVID-19 pandemic

FATF President Statement

Paris, 23 October 2020 - The COVID-19 pandemic, continues to have a profound impact on our society. Since the FATF’s May 2020 report on the challenges, good practices and policy responses to new money laundering and terrorist financing threats and vulnerabilities, arising from the COVID-19 crisis, the FATF has worked to update its understanding of the impact of this global crisis. The FATF has found that the analysis in the COVID-19-related Money Laundering and Terrorist Financing Risks and Policy Responses report remains relevant.

Criminals continue to exploit the pandemic, with mounting cases across the globe of counterfeiting of medical goods, investment fraud, adapted cyber-crime scams and exploitation of economic stimulus measures put in place by governments. At the same time, the pandemic has severely impacted some government and private sectors’ ability to implement measures to detect, prevent and investigate money laundering and terrorist financing. Over half of the responses to a survey conducted across the Global Network, report an impact on government’s ability to detect, investigate, prosecute or disrupt money laundering activity.

The FATF, its members and observers, the FATF-style regional bodies and members of the global network are continuing to work together to understand the impacts of the pandemic on money laundering, terrorist financing and on the operation of anti-money laundering and counter-terrorist financing (AML/CFT) systems.

A recent survey conducted across the Global Network, as well as a series of webinars on COVID-19 in July and September, indicate that the findings from the FATF’s earlier report remain relevant. However, the impact of the pandemic, and nature of the risks, the resilience of national AML/CFT regimes, and the risks faced by private sector all vary significantly from country to country, due to different approaches to confinement, social distancing measures, and available infrastructure.

It remains critical that jurisdictions continue to actively identify, assess, and understand how criminals and terrorists can exploit the COVID-19 pandemic, and apply a risk-based approach to ensure that measures to prevent or mitigate the risks are commensurate with the money laundering and terrorist financing risks identified.

Rising unemployment, increases in remote transactions and the accelerated implementation of stimulus programs represent vulnerabilities that criminals may exploit over the coming months. Increases in the circulation of cash in economies as a result of economic uncertainty, and the closure of borders are also likely to impact money laundering activity.

New technologies have helped the private sector adapt to the pandemic, for example using digital forms of identity to enable non-face-to-face interaction with customers. Other digital solutions could support information sharing, and detection and analysis of suspicious activities. Work under the German of the Presidency of the FATF will seek to drive forward the digital transformation of AML/CFT systems, helping ensure their resilience in future and building their efficiency.

Effective sharing of information between public and private sector entities, including through the use of public-private partnerships, has become even more crucial in ensuring that AML/CFT systems can adapt to the changing environment and continue to operate effectively.

Ensuring citizens remain safe from harm caused by criminal activity including money laundering and terrorist financing should remain a priority for all governments around the world. Competent authorities must continue to be provided with the appropriate resource to enable them to function effectively, in light of the evolving threats posed by criminals, and the constraints on resource faced as a result of the effects of the pandemic.

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