Domestic Authorities Warn of Sophisticated Money Laundering Techniques
In a bid to crack down on illicit funds, domestic authorities have issued a stern warning about the increasing use of sophisticated money laundering techniques. The authorities revealed that criminals are using various methods to conceal their identities and launder funds, including:
- Identity fraud
- False identification
- The use of “gatekeepers” such as lawyers and accountants
New Payment Technologies and Virtual Assets Pose Growing Threat
The report also highlighted the growing threat posed by new payment technologies, virtual assets, and life insurance products. Criminals are using these platforms to move illicit funds across borders and obscure their origins.
Other methods used by money launderers include:
- Overpayment of premiums
- Prepaid cards
- Tax evasion
- Non-financial businesses such as travel agencies and car dealerships
Risk-Based Approach Crucial in Identifying ML/TF Risks
The authorities emphasized the importance of a risk-based approach (RBA) in identifying and assessing money laundering and terrorist financing (ML/TF) risks. Firms are required to apply an RBA to understand their exposure to ML/TF risks and take proportionate measures to mitigate them.
While the use of an RBA is crucial, the authorities warned that no system can completely eliminate ML/TF risks. Firms must therefore remain vigilant and continue to implement robust AML/CFT measures.
FIs Must Prioritize Combatting ML/TF
The report underscored the need for financial institutions (FIs) to prioritize combating ML/TF. FIs are required to conduct a business risk assessment to identify areas that require prioritization in their efforts to combat ML/TF.
Conclusion
In conclusion, the domestic authorities’ warning serves as a stark reminder of the evolving nature of money laundering and terrorist financing. It is essential for financial institutions to stay ahead of the curve and implement robust measures to prevent the misuse of their services.