Expert summary of trade-based money laundering

A compliance expert has published a summary of the issues and characteristics of trade-based money laundering (TBML).

Hasan Zebdeh explains how TBML exploits the international trade system with the intention of transferring value and obscuring the true origins of illicit wealth.

Several methodologies

Zebdeh points out that TBML schemes vary in complexity but usually involve misrepresentation of the price, quantity, or quality of imports or exports as they transit across borders or through supply chains.

He explains how financial institutions may become implicated in trade-based schemes when they settle, facilitate, or finance international trade transactions.

This could be done, for example, through the processing of wire transfers, provision of trade finance, and issuance of letters of credit and guarantees.

Vast potential

While TBML is known to be growing in both volume and global reach and is one of the most common manifestations of international money laundering, Zebdeh argues it is less understood among academics and policymakers than traditional forms of money laundering.

He says that TBML provides vast potential for criminal organisations and terrorist groups to exploit the international trade system with relatively low risk of detection. Key traits of international trade have made it both attractive and vulnerable to illicit exploitation.

Compliance experience

Zebdeh is senior product development manager, compliance at EastNets, which provides financial institutions, corporate and government agencies with compliance, payment and cloud solutions and services.

He has almost ten years of banking, compliance, and financial crime prevention experience and served as a regional regulatory compliance assistant for the United Nations.

The full article can be found here.

Categories: Trade Based Financial crimes News

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