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UAE central bank sees COVID-19 increasing money-laundering risks By Reuters


© Reuters. FILE PHOTO: High-rise towers in Dubai, United Arab Emirates June 18, 2019.REUTERS/Christopher Pike/File Photo


DUBAI (Reuters) – The United Arab Emirates central bank sees increased risks of illicit financial flows emerging from the COVID-19 pandemic, including money-laundering and terrorism financing, it said in a report published on Sunday.

According to the report the number of money-laundering services that are not licensed has increased since the last coronavirus epidemic.

E-commerce has seen a dramatic increase due to widespread lockdowns. It stated that illicit criminals are using e-commerce to hide their money and funds because they cannot move goods or funds during pandemics.

According to the bank, “money mules”, people who get illicit funds to their bank accounts and then withdraw or wire them elsewhere and take a commission, has increased. The majority of accounts are from low-income individuals in Africa and Asia.

According to the bank, fraud risk was linked to this pandemic. For example, individuals or companies submitting false claims in order to be eligible for government support.

The bank added that they have observed an increase in fraud threats as a result of COVID-19 spreading in communities. Cyber criminals are using both digital and traditional channels to remote perpetrate cyber-enabled fraudulent attacks on a large scale and in a fast changing environment.

This report is coming as the central bank intensifies efforts to fight illicit financial flows.

Financial Action Task Force (an intergovernmental monitoring group for anti-money laundering) stated that it needed major and fundamental improvements to keep the UAE from being placed on its “greylist”, which places countries under greater surveillance.

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