Pandemic Increases Risks of Illicit Financial Flows, UAE Central Bank Says

The UAE’s central bank sees increased risks of illicit financial flows emerging from the COVID-19 pandemic, including money laundering and terrorist financing, it said in a report released on Sunday.

The use of unlicensed monetary service providers for money laundering increased during the coronavirus crisis last year, according to the report, as well as the use of e-commerce to launder money, reports Reuters.

“Widespread lockdowns have resulted in a significant increase in e-commerce. Due to the limited ability to move funds and goods during the pandemic, illicit actors are turning to e-commerce as a tool for money laundering,” a- he declared.

The number of so-called “money mules” – people who receive illicit funds in their bank accounts to hold or withdraw them and transfer them elsewhere, taking a commission for their services – has increased, the bank said, with accounts belonging in the majority of cases to low-income people in Africa and Asia.

The bank has identified risks of fraud linked to the pandemic, such as companies or individuals submitting false statements to qualify for government support measures.

“As we continue to monitor and learn more about the spread of COVID-19 in our communities, we have recently observed an increased threat of external fraud, particularly with cybercriminals exploiting both traditional and digital channels, to remotely perpetrate large-scale cyber fraud attacks in a rapidly changing environment, ”the bank also said.

The report comes as the central bank steps up efforts to tackle illicit financial flows.

The Financial Action Task Force, an intergovernmental anti-money laundering observer, said last year that “fundamental and major improvements” were needed to prevent it from placing the UAE on its ” gray list “of countries subject to increased surveillance.

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