UAE Central Bank Warns of Increased Money Laundering during Pandemic

The UAE Central Bank warned in a report on Sunday of increased risks of illicit financial flows arising from the pandemic, including money laundering and terrorist financing.

The report stated that the use of unlicensed money service providers for money laundering increased during the coronavirus breakout, as well as the use of e-commerce for money laundering.

“The spread of closures has led to a significant increase in e-commerce, due to the limited ability to move funds and goods during the pandemic, illicit actors are turning to e-commerce as a tool for money laundering,” the bank said.

It added the number of "money mules" - people who receive illicit money in their bank accounts to hold or withdraw and transfer it elsewhere- has increased, with accounts in most cases belonging to low-income inpiduals from Africa and Asia.

The bank has identified fraud risks associated with the pandemic such as companies or inpiduals making false claims to qualify for government incentive support measures.

“We have recently noticed a growing threat of external fraud, particularly with cybercriminals taking advantage of traditional and digital channels, to commit fraud online on a large scale in a rapidly evolving environment,” the bank said.

The Financial Action Task Force  said last year that "substantial and significant improvements" were needed to avoid placing the UAE on the "grey list" of countries under increased surveillance.