FIU warns COVID-19 upheavals might beget new financial cyber crimes

New Delhi, Mar 22 (PTI):
The “upheavals” generated by the spread of COVID-19 pandemic can become a “breeding ground” for new variants of electronic and cyber crimes in the coming days, the head of India’s Financial Intelligence Unit (FIU) has said in a latest report. The federal organisation had last year created a special unit to deal with high-risk or important suspect transactions. “Financial year 2019-20 was a rather challenging year for the global economy on account of COVID-19 pandemic,” FIU-India Director Pankaj Kumar Mishra wrote in the recently released annual report for the agency (2019-20). “The upheavals generated by COVID-19 might prove to be a breeding ground for novel modus operandi and crimes such as electronic frauds and cybercrimes,” he said. The report has also been submitted to the Union finance ministry under which the agency functions.
The FIU acts as an interface between the financial sector of the country and law enforcement agencies for collecting, analysing and disseminating information, particularly about suspicious financial transactions pertaining to money laundering and financing of terrorism.
The FIU chief added that the reporting entities, like banks and other financial institutions, must further “strengthen their systems in order to identify new methods and trends which are emerging in times of this pandemic crisis”.
The report said that the FIU received a slightly higher number of suspicious transaction reports (STRs) at over 5.47 lakh during 2019-20 as compared to about 3.23 lakh in 2018-19.
An STR, generated by the reporting entities like banks and other financial intermediaries, is defined as a transaction involving financing of the activities relating to terrorism including transaction involving funds suspected to be linked or related to, or to be used for terrorism, terrorist acts or by a terrorist or a terrorist organisation or those who finance or are attempting to finance terrorism .
Also, transactions done under circumstances of unusual or unjustified complexity or appear to have no economic rationale or bona fide purpose can be categorised under an STR. The FIU gathers these reports on the basis of legal powers given to it under the Prevention of Money Laundering Act (PMLA).
After analysing the STRs, it disseminates these reports to various law-enforcement agencies in the country such as the CBI, Enforcement Directorate (ED), Income Tax Department, Directorate of Revenue Intelligence, Intelligence Bureau, Military Intelligence, and various state police units among others.

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