Money laundering via unlicensed providers up during pandemic - Central Bank

Report also cites fraud, bribery, corruption, charity and disaster fraud as risks to financial institutions  

  
General view of Central Bank of The U.A.E. on January 3, 2017 in Dubai, United Arab Emirates.

General view of Central Bank of The U.A.E. on January 3, 2017 in Dubai, United Arab Emirates.

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The use of unlicensed money service providers (UMSO) for money laundering (ML) has increased during the COVID-19 pandemic, according to a report released by the UAE Central Bank on Sunday. 

The new report, published in cooperation with other UAE government and financial bodies, cited that money laundering, as well as terrorist financing, fraud, bribery and corruption, among others, are the risks faced by financial institutions during the health crisis . 

The report also identified the methods of mitigation, identification and resolution implemented by selected financial institutions to address such risks. 

“This report is part of our ongoing efforts to address money laundering and terrorist financing-specific trends and typologies emerging from the COVID-19 pandemic in the financial sector,” said Khaled Mohamed Balama, central bank governor.   

“Although these risks are still in the early stages of identification, CBUAE, alongside the concerned supervisory authorities, have released this report as key reference on pandemic-related typologies and indicators to the financial institutions, so they remain abreast of and be able to mitigate these emerging risks, which ultimately contribute to safeguarding the integrity of the UAE financial system.” 

Professional money laundering

In its report, the central bank said that the use of professional money laundering (PML) services is also likely going to increase during COVID, as criminals who have previously relied on self-executed money laundering schemes may now be seeking the help of PMLs.   

In addition, the e-commerce boom brought about by the pandemic has allowed criminal actors to use fake e-store shop fronts as money laundering tools. 

There has also been an increase in the incidences of customers being reported for "money mule" activity, the report said.   

(Writing by Imogen Lillywhite; editing by Cleofe Maceda ) 

Imogen.Lillywhite@refinitiv.com

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