The Banking Executive Magazine - Septmber Issue 2021

MONEY LAUNDERING VIA UNLICENSED PROVIDERS UP DURING PANDEMIC The use of unlicensed money service providers (UMSO) for money laun- dering (ML) has increased during the COVID-19 pandemic, according to a report released by the UAE Central Bank. The report, published in cooperation with other UAE government and fi- nancial bodies, cited that money laundering, as well as terrorist fi- nancing, fraud, bribery and corrup- tion, among others, are the risks faced by financial institutions during the health crisis. The report also identified the meth- ods of mitigation, identification and resolution implemented by selected financial institutions to address such risks. “This report is part of our ongoing ef- forts 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, UAE Central Bank, alongside the con- cerned supervisory authorities, have released this report as key reference on pandemic-related typologies and indicators to the financial institu- tions, 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” Khaled Mohamed added. 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 pre- viously 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 laun- dering tools. There has also been an increase in the incidences of customers being re- ported for "money mule" activity, the report said. ISSUE 153 SEPTEMBER 2021 the BANKING EXECUTIVE 13