Typologies report on money laundering and terrorist financing risks in the world of virtual assets

The report aims to present in an integrated manner an overview of the money laundering and financing of terrorism risks in the world of virtual assets and their service providers in MONEYVAL members. It includes an overview of the measures taken to regulate and supervise the virtual asset service providers, as well as some features of the identified risks that criminals use virtual assets service providers and virtual assets to launder proceeds of crime. MONEYVAL members continue to struggle with implementation of the FATF Recommendation 15, around 80% of the assessed members are only partially or not compliant with the FATF requirements.

The report also considers whether law enforcement agencies have adequate powers and tools to investigate, locate and impose interim measures in respect of virtual assets, and includes examples of types of virtual assets platforms used for financial support of criminal activity and of cases investigated by the relevant authorities.  It also highlights good practices and challenges in applying risk-based supervision of the sector.

This report was prepared by a team led by the Project Leader Mr David Baker (Isle of Man) with the support of experts from Gibraltar, Malta, Principality of Monaco, Slovak Republic and Slovenia, and was adopted by MONEYVAL in May 2023.


Typologies report on AML/CFT supervision in times of crisis and challenging external factors

The report aims to assist authorities to effectively carry out their anti-money laundering countering terrorist financing (AML/CTF) supervisory activities in times of crisis or challenging external factors. It is based on information collected from supervisors across MONEYVAL jurisdictions and other international actors on the measures they have taken to overcome the difficulties caused by the COVID-19 pandemic, including operational limitations, notably the physical movement restrictions impeding the execution of on-site visits, limited human resources and technical complications. It draws on earlier work conducted by MONEYVAL on the topic of COVID-19 risks.

To mitigate emerging money laundering and terrorism financing (ML/TF) risks, supervisors and reporting entities were prompted to rapidly increase digitalization of their core functions to maintain operational continuity. Business continuity plans proved to be a useful tool for supervisory authorities to swiftly overcome the crisis situations as well.

IT solutions, both software and hardware, were essential to access information from reporting entities on ML/TF risks and to enable shifting to remote supervision or hybrid inspections using video conferencing tools. In addition, supervisors used different communications channels, ranging from posting video clips and e-learning material to online webinars and trainings.

In order to ensure data security, new protocols were implemented, and staff were trained on issues related to cybersecurity and data protection. Other measures with positive results included setting-up of coordination committees when the AML/CTF supervision was dissipated amongst several supervisors.

Supervisors developed guidelines and/or regulations to permit the use of digital ID systems by reporting entities. Furthermore, they explored the exceptional use of simplified customer due diligence in low-risk scenarios, for reporting entities to on-board clients and facilitate the delivery of government benefits in response to the pandemic.

The report concludes that clear and direct communication on the ML/TF risks in challenging circumstances is an effective tool in continuing AML/CTF compliance by the private sector. At the same time, cross-border cooperation between supervisors could be enhanced by simplifying existing regulations and procedures relating to cross-border data exchange.

Following the publication of the report, MONEYVAL member states and territories will be invited to provide feed-back on the use of its findings in one year.


Typologies report on Money laundering and terrorism financing trends during the COVID-19 crisis

The report outlines preliminary conclusions on threats, vulnerabilities and best practices identified so far during the pandemic based on the information collected from its members. The report aims to assist policymakers, practitioners and the private sector in applying a more targeted and effective response to the emerging money laundering and terrorist financing risks in the European context.The findings indicate that the urgent need to acquire special medical equipment and supplies seems to have created some vulnerabilities for fraud, corruption and subsequent money laundering. Authorities in charge of supervising money laundering and terrorist financing threats have had to find innovative ways to carry out their tasks by using secure electronic means. The limits imposed to physical meetings in business relationships and the greater use of remote operations seem to have raised authorities´ concerns with regard to the full application of measures to adequately identify customers. Some findings of the report are also relevant for the general public as a source of information against potential criminal schemes, such as phishing emails, text messages containing links to malicious websites, attachments to obtain personal payment information and social engineering. International cooperation against money laundering and terrorist financing does not appear to have been negatively impacted by the measures against COVID-19.


Typologies rTypologies report on Laundering the Proceeds of Organised Crimeeport on Laundering the Proceeds of Organised Crime

The report examines the methods used by organised criminal groups to launder illegally earned funds and the challenges faced by financial intelligence units,  law enforcement agencies and prosecutors in investigating money laundering linked to organised crime groups. It analyses the main reasons and obstacles for relevant authorities to successfully prosecute organised crime groups and those who launder money on their behalf, as well as to achieve final confiscations of the proceeds from organised crime. With a view to assisting relevant authorities, it sets out possible measures that can be taken to improve the investigation and prosecution of organised crime and support the confiscation of proceeds. Specific typologies and trends are also included, together with red flag and indicators, for use by financial intelligence units in their analysis to assist identifying cases where organised criminal groups might be involved.


Typologies report on the use of online gambling for money laundering and the financing of terrorism purposesTypologies report on the use of online gambling for money laundering and the financing of terrorism purposes

The report provides an overview of the online gambling sector in MONEYVAL countries, including the extent and type of gambling offered and the ML/FT risks and vulnerabilities associated with online gambling and the methods of payment used. A list of typologies, red-flag indicators and vulnerabilities is presented, based on the experiences shared by public and private stakeholders with the project team. The report concludes that one of the major vulnerabilities is directly linked to unregulated online gambling. Additionally, given that online gambling, by its nature, is conducted anonymously, the use of false or stolen identities is less likely to be detected. The use of alternative payment systems to credit online gambling accounts systems may also augment the risk of ML/FT. Challenges also arise due to the cross-border nature of online gambling. The regulation and supervision of online gambling remain the strongest mitigating factors to prevent abuse.


Typologies report on the postponement of financial transactions and monitoring of bank accountsTypologies report on the postponement of financial transactions and monitoring of bank accounts

This report examines the experience of competent authorities in participating countries in effectively postponing suspicious financial transactions and monitoring bank accounts. It analyses the use of available procedures and mechanisms and sets out practical problems encountered by relevant authorities in this context. It includes a number of cases, red flags and indicators and formulates recommendations aimed at assisting competent authorities in making a more efficient use of their powers. The report concludes that the monitoring of bank accounts has proved to be an effective tool in tracing criminal assets, and that in cases of suspicion of terrorist financing, this is probably one of the most effective investigative instruments. Better knowledge of the methods and practices successfully used in this context by various financial intelligence units and law enforcement agencies and strengthened exchange of experiences and cooperation with the private sector can only lead to more effective financial investigations and successful identification, seizure and subsequent confiscation of proceeds of crime.


Criminal money flows on the Internet: methods, trends and multi-stakeholder counteractionCriminal money flows on the Internet: methods, trends and multi-stakeholder counteraction

This typology report is the result of a cooperative effort of MONEYVAL, the Council of Europe's Global Project on Cybercrime and the joint project of the European Union and of the Council of Europe against money laundering and the financing of terrorism in the Russian Federation. The report analyses the links between cybercrime and money laundering, the most frequently used methods and instruments for laundering criminal proceeds from cybercrime and through the Internet, as well as the risks and vulnerabilities posed by this type of money laundering. It sets outs a number of findings as regards cybercrime and money laundering and of available countermeasures and good practices, which could inspire policy makers and regulators or become elements of more systematic future approaches and strategies that are aimed at the prevention of money laundering and the financing of terrorism, and at the search, seizure and confiscation of proceeds of crime on the Internet.


Money laundering through Money Remittance and Currency Exchange Providers - StudyMoney laundering through Money Remittance and Currency Exchange Providers - Study

This joint FATF/MONEYVAL report contains information on money laundering and terrorist financing methodologies associated with the money remittance and currency exchange sector. Apart from providing a useful general overview of the sector of money transfer remittances and currency exchange providers, the regulatory framework, the supervision and sanctioning regimes, the report sets out identified money laundering and terrorist financing methods and techniques involving money remittance and currency exchange providers.

Several case studies described in this report illustrate that money remittance and currency exchange businesses have been both witting and unwitting participants in laundering activities, in all three stages of the process (placement, layering and integration), and in certain instances, for terrorist financing purposes. The identified risks of ML/TF through the sector detailed in the report are related to clients, owners or agents. The cases highlight also the links between money laundering in the money remittance sector and other criminal activities (e.g., fraud, trafficking in human beings, smuggling, drug trafficking, economic crime).