Paris, February 25
The Financial Action Task Force has published a major new paper that highlights the growing threat of cyber-enabled fraud and its increasing intersections with money laundering, terrorist financing, and proliferation financing, urging countries to bolster global standards and cooperation to counter the evolving digital crime landscape.
According to the FATF's latest publication, Cyber-Enabled Fraud -- Digitalisation and Money Laundering, Terrorist Financing and Proliferation Financing Risks, fraud has become "one of the most widespread and damaging profit-motivated forms of crime, generating large volumes of illicit proceeds through the exploitation of victims around the world."
The report notes that in some jurisdictions, such as the United Kingdom, fraud accounts for more than 40% of all crimes, while Singapore has seen a 61% increase in cyber-enabled fraud cases in just two years.
The FATF paper underscores that digitalisation, technological advancement and the borderless nature of online platforms have expanded opportunities for criminals to commit fraud, then quickly transfer illicit funds across jurisdictions, complicating efforts to trace and recover those proceeds. The paper identifies that 156 jurisdictions, or 90% of those assessed by the FATF, now view fraud as a major ML risk, amplifying concerns about how cyber scams can feed into broader financial crime networks.
FATF President Elisa de Anda Madrazo is quoted in the report saying: "As fraudsters continue to adapt and accelerate their scams, we need to keep pace to safeguard people's money and protect victims from the effects of damaging losses." She emphasised the importance of fully leveraging the FATF toolkit to prevent fraudsters from exploiting gaps in global standards.
The paper outlines several areas where the FATF Standards can be strengthened to better tackle cyber-enabled fraud, including payment transparency measures to improve traceability of funds, enhanced asset recovery tools to freeze and reclaim illicit proceeds, and stronger regulation of virtual assets which are increasingly abused to facilitate fraud and laundering. It also calls for improved beneficial ownership transparency, as organised fraud networks often hide activities behind shell companies to obscure illicit flows.
Importantly, the FATF highlights the need for intensified domestic and international cooperation, urging countries to share information quickly with partners and to integrate anti-fraud efforts more fully into existing anti-money laundering and counter-terrorist financing frameworks. It also notes that some financial intelligence units and banks are now deploying advanced technologies such as machine learning models on transaction datasets to detect anomalies associated with fraud and associated financial crime.
As cyber-enabled fraud continues to grow in scale and sophistication, the FATF has committed to focusing significant resources on the threat over the coming years. Next month, FATF representatives will participate in the Global Fraud Summit in Vienna, organised alongside INTERPOL and the UN Office on Drugs and Crime (UNODC), to push for coordinated global action and to highlight operational strategies for preventing, detecting and recovering proceeds of fraud.
- ANI
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