Banking regulator the European Banking Authority (EBA) is warning financial institutions to be extra vigilant as the Covid-19 pandemic forces criminals to seek new ways of moving illicit funds and goods across borders.
The EBA is also warning national regulators that evidence is emerging of new criminal activity linked to the deadly spread of the virus. “As most economies are facing a downturn, financial flows are likely to diminish. However, experience from past crises suggests that in many cases, illicit finance will continue to flow,” says a statement from the EBA, the EU’s most senior regulator for compliance with money laundering rules.
“For example, there is already some evidence of increased levels of cybercrime, Covid-19-related frauds and scams targeting vulnerable people and companies, of fake fundraising campaigns and of criminal networks selling rationed goods at a higher price.”
The regulator said banks processing payments linked to trade transactions should take additional measures to establish whether unexpected flows – particularly linked to customers or regions badly affected by the virus – are of legitimate origin.
At the same time, supervisors at national level are encouraged to adjust supervisory activities in a pragmatic and risk-sensitive way, for example by postponing on-site examinations where not deemed essential and by making greater use of virtual meetings and inspections.