Cybercrime is listed as one of the main money laundering techniques to move and conceal illicit proceeds and promote criminal activity in the United States, according to the 2022 National Risk Assessment (NRAs) on Money Laundering (NMLRA) from the US Department of the Treasury.
The NMLRA is part of a series of NRAs just released which also include Terrorist Financing (NTFRA) and Proliferation Financing (NPFRA)
According to the NMLRA, incidents of cybercrime have significantly increased since the 2018 NMLRA, particularly as cybercriminals and malicious foreign state actors have taken advantage of the COVID-19 pandemic through phishing schemes and exploitation of remote applications to conduct ransomware attacks and Business Email Compromise (BEC) fraud.
It added that other cybercriminal groups have deployed malware to harvest data, which they have monetised through online marketplaces or direct exploitation:
“Cybercrime presents a significant illicit finance threat: the size, reach, speed, and accessibility of the US financial system make US financial institutions attractive targets to traditional criminals, cybercriminals, terrorists, and foreign state actors. Among other critical infrastructure targets, these actors target financial institutions’ websites, systems, and employees to steal customer and commercial credentials and proprietary information, defraud institutions and their customers, and disrupt business functions.”
Other crimes that generate the largest amount of illicit proceeds laundered in or through the United States include fraud, drug trafficking, human trafficking and corruption, according to the assessments.
The documents highlight the most significant illicit finance threats, vulnerabilities, and risks facing the United States.
They take into account changes to the illicit finance risk environment resulting from the COVID-19 pandemic, ransomware, domestic violent extremism, corruption; the increased digitization of payments and financial services; and the enactment of significant new requirements to the US anti-money laundering/countering the financing of terrorism (AML/CFT) framework.
Other findings were that the Democratic People’s Republic of Korea (DPRK), followed by Iran, continue to pose the most significant proliferation finance threats to the US:
“Since the 2018 NPFRA, China and, to a lesser extent, Russia, have expanded their efforts to illegally acquire US-origin goods. Proliferation finance networks continue to misuse correspondent banking relationships and establish multiple front and shell companies to facilitate financial activity and conduct their trade.”
“They continue to generate significant revenue from the maritime sector, in violation of international and US law. These networks are also increasingly exploiting the digital economy, including through the systematic mining and trading of virtual assets, and the hacking of virtual asset service providers.”
With respect to foreign terrorist groups, the most common form of financial support from US-based individuals continues to be the transfer of small sums (several hundred to tens of thousands of dollars) to facilitators outside of the US working on behalf of ISIS and its affiliates, Al-Qaida and its affiliates, and Hizballah.
The 2022 NTFRA analyses for the first time the funding methods that support domestic violent extremists (DVE). The US Treasury notes that while many DVE attacks are self-funded, DVE networks may raise funds through solicitations to supporters, commercial ventures, or criminal activity.
“The National Risk Assessments underscore the US government’s commitment to protecting our economy and financial system from exploitation by a variety of criminal actors and national security threats.” said Brian E Nelson, Under Secretary for Terrorism and Financial Intelligence.
“By better understanding the current risk environment, we can more effectively guard the integrity of the US financial system.”
In the coming weeks, The Treasury said it will release the 2022 National Strategy for Combatting Terrorist and Other Illicit Finance, a plan directly informed by the analysis contained in the risk assessments.
To access the 2022 National Money Laundering Risk Assessment, click here.