Trade-based financial crime (TBFC) was a key agenda item at the 2017 annual conference of the Bankers Association for Finance and Trade (BAFT), where bankers called on more actors in the trade finance chain to help fight this type of criminality.

Bankers expressed concerns that they were shouldered with responsibility for detecting TBFC, and called for other parties in an international transaction – including exporters, importers, freight forwarders, shippers and ports and customs authorities – to cooperate more to combat financial crime.

Customs data

A key issue raised was that banks have limited access to customs data. But if the customs authorities shared this data, it could significantly help the detection of TBFC.

Bankers at the conference called on regulators to require the disclosure of more specific information on trade documentation used by customs authorities, and allow banks expanded access to customs data.

Misinvoicing

Some delegates suggested customs authorities would resist such requirements as they would involve increased inspections of the quantity and quality of goods being shipped.

But participants at the conference said this would help detect misinvoicing.

UK example

The conference heard that the UK provides a good example of cooperation between banks and the authorities with its Joint Money Laundering Intelligence Taskforce (JMLIT). It includes the government, the British Bankers Association, the National Crime Agency and more than 20 UK and international banks. Its aim is to share intelligence to combat money laundering.

Operational outcomes claimed between May and July 2016 by the JMLIT included 37 arrests of suspected money launderers; the instigation of 186 bank led investigations into customers suspected of money laundering; identification of 137 suspicious accounts; heightened monitoring by banks of 165 accounts; the closure of 114 bank accounts suspected of being used for the purposes of laundering criminal funds, and the restraint of £145,000 of suspected criminal funds.

Categories: Trade Based Financial crimes News