Wednesday,October 21, 2020 / 3:16 PM / By CBN / Header Image Credit: Bloomberg

Changes in the trends of business activities andfinancial transactions precipitated by COVID-19 pandemic inadvertently led toincrease in financial crimes globally. This therefore requires financialinstitutions to adapt rapidly and keep abreast with emerging risks and otherdevelopments while taking proactive steps to address the new and emerging ML/TFrisks. This includes investing in robust data mining and artificialintelligence software to monitor transactions and also report suspicioustransactions.

The Nigerian Financial intelligence Unit (NFIU), asthe central repository of suspicious transactions and other financialinformation, had issued an Advisory based on comprehensive analysis of STRs andother information available to it. The Advisory identified increased financialcrimes such as, cybercrimes, frauds, counterfeiting and substandard goods;diversion of public funds and misuse of Non-Governmental Organisations (NGOs). Some vulnerabilities and Red flags highlightedin the Advisory are listed below for your information and necessary action, please:

Fraud

• E-commerce merchant with little or no historyor internet presence, suddenly receiving multiple payments from unrelated thirdparties.
• Individual(s)suddenly receiving multiple payments from unrelated third parties.
• Customer(s) suddenly engaging in the supply or purchase of medical supplies andpayment for goods and services associated with known brands, yet thebeneficiary is an individual not a corporate body.

Counterfeiting &Substandard Goods

• Unusual transactions dynamics from customer(s).Expect to see more transactions for medical supplies, equipment and medication.
• Payment for goods or services associated with aknown brand, yet beneficiary is an individual not a company.

Diversion of PublicFunds

• Unusual volume of transactions, largeand frequent cash withdrawals and deposits.
• Immediate disbursement of depositedfunds to multiple accounts.
• The account signatory also a public/civil servant.
• Funds transferred from government account topersonal account

NGOs

• Non-profit organizations suddenlyreceiving donations in favor of Covid-19 patients or victims.
• Customers' account with little or noactivity suddenly receiving funds from one or more unrelated third parties onlyfor the funds to be transferred to one or more unrelated thirds parties.
• NGOs under the guise of paying COVID-19 victimscould actually be paying members of a criminal gang or facilitating terroristfinancing.

You are therefore advised to update Alerts protocol inyour AML/CFT monitoring tools, in line with the red flags and emerging trendsarising from the COVID-19 related financial crimes.

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