CBUAE - Covid increases money laundering risks

The United Arab Emirates central bank sees increased risks of illegal financial flows emerging from the pandemic, including money-laundering and terrorism financing, it said in a report published on Sunday.

The report said that the use of unlicensed money service providers for money laundering has increased during the pandemic, as well as the use of e-commerce to launder money.

The 'money mules' — people who receive illicit funds into their bank accounts to hold or withdraw and wire elsewhere, taking a commission for their services — increased, the bank said, with accounts in the majority of cases belonging to low income individuals from Africa and Asia.

The bank identified fraud risks linked to the pandemic such as companies or individuals submitting false claims to qualify for government stimulus support measures.

“Widespread lockdowns have resulted in a significant surge in e-commerce. Due to limited ability to move funds and goods during the pandemic, illicit actors are turning to e-commerce as a money laundering tool," it added.

“As we continue to monitor and learn more about the spread of Covid-19 in our communities, we have recently observed heightened external fraud threat, especially with cyber criminals exploiting both traditional and digital channels, to remotely perpetrate cyber-enabled fraud attacks at scale in a rapidly evolving environment," the bank also said.