Back to the complete issue
Sunday, 4 April 2021

The lockdown has been good to money launderers

Money laundering has flourished during the covid-19 pandemic: While the pandemic has put a dent on much business activity worldwide, lockdown measures have presented criminals with the ideal situation to commit laundering offences, said the US’s Financial Action Task Force — the intergovernmental watchdog for financial crime — according to a Financial Times video (watch, runtime: 02:42). The UK reported a 20% y-o-y increase in suspicious activity reports in FY2019-2020, while January of that year saw a 116% rise in case submissions from the country’s anti-laundering agency, according to a National Crime Agency report.

How has lockdown helped launderers? Money laundering generally takes the form of bulk money smuggling, bank transactions, or export trade transactions. The latter two methods appeared to increase during the pandemic, as criminals took advantage of banks moving customer interactions online by exploiting difficulties in verifying customer identity. With the pandemic also leaving many businesses in financial need, criminals began to use legitimate, but failing businesses as a front for illegal activity.

What are countries doing to prevent this? The US introduced the Anti-Money Laundering Act last year which obliged banks and other financial institutions to take stricter measures to detect suspicious activity while also giving more power to authorities to demand documents from foreign banks. In the EU, a central money laundering supervisor has been created by the European Central Bank to increase enforcement, and has adopted an Anti-Money Laundering Action Plan that coordinates the exchange of information between more than 50 authorities concerned with combating money laundering.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.