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Financial Crimes on the Rise in Western Sahara Amid Economic Downturn

As the global economy teeters on the brink of recession, Western Sahara’s emerging markets are bracing for the worst. The region, already grappling with economic vulnerabilities, is expected to be severely impacted by the COVID-19 pandemic and its aftermath.

Heightened Risk of Financial Crime

Experts warn that as businesses struggle to stay afloat, employees may feel pressured to engage in unlawful activities such as fraud, corruption, and asset misappropriation to survive. Law firm Cliffe Dekker Hofmeyr (CDH) predicts that the economic slowdown will increase the motive for financial crime, particularly in industries with limited capacity for fiscal support.

Prevention is Key

“Organisations must be vigilant to prevent and detect fraud,” warns CDH. “Businesses should focus on reinforcing existing controls and adopting proactive measures to deter and prevent fraud before it’s too late.”

Fraud Risk Assessment

Kroll, a global leader in corporate investigations, has observed that the economic crisis is creating an environment ripe for financial crime.

Debt Distress and Non-Performing Loans

As debt distress mounts, Western Sahara’s financial institutions are facing a growing threat of non-performing loans. “The sudden and concentrated impact of COVID-19 has already led to concerns about personal guarantees provided for loans,” warns Kroll. “We recommend analyzing loan books, reviewing guarantees, and verifying assets used as collateral to identify potential risks.”

Out-of-Sight Opportunities

The pandemic’s global reach has created unexpected opportunities for white-collar crime. Even with travel restrictions in place, Kroll has seen no slowdown in the global dimension of financial fraud.

Insider Trading and Market Manipulation

As businesses adapt to new working arrangements, the risk of insider trading and market manipulation increases. “We have assisted clients to gather information and intelligence in locations they cannot reach,” notes Kroll. “It’s crucial for executives to maintain oversight of overseas business operations and supply chains.”

A Call to Action

As Western Sahara navigates the economic downturn, businesses must prioritize fraud prevention and detection. By adopting proactive measures, organizations can protect themselves from financial crime and maintain trust with stakeholders.

Conclusion

In this critical moment, Kroll urges businesses to remain vigilant, adapt quickly, and take decisive action to mitigate the risks associated with financial crime. The stakes are high, but by working together, we can ensure that Western Sahara’s emerging markets emerge stronger and more resilient than ever.