Money laundering during the Corona crisis:
31% of the offenses at the money laundering base in 2020 were fraud, deception and forgery.
In addition, there has been a significant increase in the number of fraudulent offenses that are committed mainly through the online space.
This is according to data from the Authority for the Prohibition of Money Laundering and Terrorist Financing, which publishes the annual report for 2020, which reveals the situation of economic crime during the Corona period.
In light of the challenges of the corona plague and the consequent increase in risks to the financial system, there has been a significant increase in the number of "reports of unusual activity", ie activity that is not typical of the customer's normal activity patterns and may be related to money laundering or terrorist financing.
In 2020, more than 112,000 reports of unusual activity were received, an increase of about 10% relative to 2019. The source of about 86% of the unusual reports is in the banking system and financial service providers (47% and 39%, respectively), and approx. 14% of other reporting sectors.
According to the data, the leading area of criminal activity linked to the commission of money laundering and terrorist financing offenses in 2020 is fraud, deception and forgery, which constitutes almost a third of the volume of offenses identified - 31.5%.
In addition, the area of tax offenses, including the use of fictitious invoices, continues to be a significant area of activity with about 18.5%, along with bribery and public corruption which constitutes 14.1% and terrorist acts and terrorist financing which constitutes about 9%.
With the transition to online consumerism, the criminal elements have also switched to digital activity // Photo: Reuters,
Among the major trends observed during 2020, the Corona Year, there has been a significant increase in the volume of fraud offenses committed in the online space.
As is well known, the corona crisis has led to the acceleration of the transition from traditional banking to "technological" banking, an increase in the use of electronic means of payment, online and digital banking, online lending, the purchase of virtual assets and more.
Along with these changes, the criminals also "moved to work from home" - the terrorist organizations and criminals not only did not reduce activity during the crisis, but also used it to increase their activity, taking advantage of diverting the attention of various actors and undermining public safety.
The most prominent patterns of money laundering in 2020 were international activity with about 15.7%, activity through financial service providers accounted for about 10.7%, cash activity about 8.8%, real estate activity about 8.3%, accounting activity about 6.8%, And lending and credit use activities with about 6.6%.
There was a significant increase in reports of unusual activity in the financial service providers sector ("changers").
This is an increase of about 13% compared to 2019 in the number of reports and a relative increase of about 860% in the last five years, to 39% of the total unusual reports in 2020. To illustrate, the number of unusual reports, ie reports indicating concern about the nature of activity The customers, who reported financial service providers in 2013, was about 400 and in the past year it was about 44,000 reports.
Digital fraud, illustration // Photo: GettyImages,
In addition, the report includes a description of cases in which the Authority participated, detailing the methods of money laundering and financial intelligence research conducted by the Authority and enabling the perpetrators' perception of the required restrictions. The issues presented in the report cover a wide range of areas and include international cooperation with financial intelligence units around the world, fraudulent offenses, human trafficking, the use of the "hawala" method for money transfers between countries and even detail the methods of professional money launderers.
This year, the Authority led moves to promote the fintech industry and improve the financial inclusion of innovative and advanced financial services in Israel, which will enable innovative players to integrate into the Israeli economy and even compete with traditional banking entities.
After extensive work throughout 2020, in February 2021 a money laundering order was issued to financial service providers, which will apply the anti-money laundering regime, to all its obligations, also to virtual currency service providers from its entry into force this coming November.
By doing so, these bodies will be able to officially become part of the community of legitimate players.
Activities in 2020 focused on online fraud, the growth of the gray market in light of the difficult economic situation, activities of extortion sponsorship with emphasis on Arab society, fight against criminal organizations, fictitious invoice, couriers, and successfully provided quality intelligence to all police investigations, tax authorities and bodies. Security in the analysis of terrorist financing cases.
According to the head of the Anti-Money Laundering and Terrorist Financing Authority, Dr. Shlomit Wegman-Ratner: "The past year has been challenging for the PA and the State of Israel: the criminals have also moved to 'work from home', with the Corona virus creating 'business opportunities' for criminals.
This year, too, the authority has carried out and supported dozens of economic investigations, in Israel and around the world, which have led to indictments, arrests and forfeiture of criminals on a huge scale. "
The year 2020 marks the twentieth anniversary of the enactment of the Anti-Money Laundering Law.
The Authority notes that for 20 years, the State of Israel has managed to advance from the bottom of the FATF blacklist to the forefront of the fight against money laundering and terrorist financing, today being one of a handful of member states of the prestigious FATF and one of the most effective anti-money laundering and terrorist financing regimes in the world.