Similarities Between Money Laundering and COVID-19
October 20, 2020
Author: Atty. Emily Sampedro Morales

emily.sampedro@fexlaw.com

 

 

While the whole world is fighting to stop COVID-19, (which is an aggressive virus that emerged in China at the end of 2019 and that in a few months has become a global pandemic, whose characteristics and medical impacts are still are determining and whose havoc so far has caused a global socio-economic crisis), money laundering remains a central enabler of organized crime. The pandemic caused by coronavirus has caused officials specialized in the prevention and fight against money laundering to be working remotely, which undoubtedly reduces their ability to collect, process, analyze and evaluate cases of this crime; therefore, it makes it a very difficult task to perform in the same way that, For officials or front-line physicians it is necessary to control the fulfillment of isolation and confinement measures to stop the spread of the disease. Now, like this peculiarity, what other characteristics do COVID-19 and Money Laundering have in common?

Thus, money laundering and COVID-19 are threats of easy contagion, difficult to detect and of global impact, so it is imperative that nations worldwide enforce the rules rigorously, so that effective results can be obtained. On the other hand, the four phases to combat money laundering are: identification, measurement, control and monitoring, in particular the same number of phases that have been defined globally to combat COVID-19, which are: preparation, containment, community contagion and sustained transmission.

The easy contagion in money laundering can be understood as the possibility of loss that an entity may suffer, directly or indirectly, due to the action or experience of a related party; for example, it can be said that there will be contagion if the shareholder of an important company is involved in a case of money laundering and for that reason the organization, without having anything to do with it, suffers the adverse consequences of this illegal conduct. In the same way with COVID-19 a person may have complied with all the rules and follow all the controls to avoid contracting the virus; However, if a person from your family, work or social environment has acted irresponsibly and has not followed the rules for health care, they may be a carrier of the virus and transmit it to their relatives or friends.

Difficult to detect is another similarity that COVID-19 and money laundering have. At present, there are several reasons why it is difficult to detect COVID-19 cases, among them one of the most important is the similarity of the symptoms associated with it, with other diseases that cause respiratory affectations, so this has caused the existence of false alarms and confusion that corrode the health system; In the same way, the health authorities have declared that many of the cases of COVID-19 have been of people who do not have symptoms, carriers of the virus without knowing it, which makes its detection more difficult, the only way to know for sure that a person is infected by the disease is performing the respective medical tests, which now have a high cost.

Something similar happens with money laundering, for the detection of cases, compliance officers usually use alert signals, which allow identifying unusual operations by clients, employees, suppliers, partners, among others. It usually happens on occasions that said behaviors of the obligated subjects are justified and, as with the symptoms of other diseases that are not COVID-19, they end up wearing out the asset laundering prevention system; Likewise, compliance officers may believe they know precisely what this crime consists of and how to detect it (symptoms), but they can only be sure of its existence when the judicial authorities present the respective evidence. Therefore, in the case of money laundering, not every action should be reported,

Money laundering and the COVID-19 virus are global threats, since they can affect anytime and anywhere. Money laundering is a global crime, whose purpose is to try to give illicit money the appearance of legality, it begins with the commission of a crime that produces profits of illegitimate origin which must enter the formal economy so that the offender can use them, and thus also avoid being investigated. When this happens, criminals infect various sectors of the economy, then a distortion is generated in macroeconomic calculations and makes it impossible to carry out effective public policies among other negative consequences for the states. In the same way, COVID-19 spreads around the world, causing widespread panic,

In both cases, only responsibility and rigorous obedience to the rules will allow us to face them effectively, it is also imperative to comply with the mandates of the authorities, both those issued to prevent money laundering and those aimed at preventing the growth of cases of COVID-19. Compliance officers will have to carefully execute controls established in the regulations to identify possible money laundering operations, while citizens will have to heed the recommendations related to quarantines, social isolation and other measures necessary for health care. If the rules and precepts established by the specialized authorities are followed and carried out, it will be possible to face these two global threats, which undoubtedly put us all at risk.

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