An analyst who specialises in the means through which some states under authoritarian rule, terrorists, and criminals use free markets to restrict freedom has warned of the dangers of state-sponsored trade-based money laundering.

In a piece for The Hill news website, Clay Fuller argues that the most pressing national security threats to the US exist at the intersection of authoritarian rule and illicit finance.

Origin disguised

Fuller, a Jeane Kirkpatrick fellow at the American Enterprise Institute, believes regimes including Russia, China, North Korea and Iran structurally depend upon illicit funds and use sovereign legitimacy to create illicit financial networks that penetrate free economies.

He suggests one example of this is China’s trans-shipment of steel by moving goods into a country and then disguising their origin to avoid tariffs at a final destination.

High form of TBML

This is a high form of trade-based money laundering, or value obfuscation, which lower-level criminal networks, terrorist organisations and rogue states replicate, expand and use at the expense of the US, Fuller argues.

He is calling for a more active approach to illicit finance and that beneficial ownership data is a powerful tool in fighting it.

Legislation needed

Fuller is pushing for progress to be made in the passage into law some of the 20 pieces of legislation designed to curb illicit finance that are currently in draft form. At least half of these he says call for some form of beneficial ownership reporting.

The American Enterprise Institute is a conservative leaning Washington based think tank.

The full article by Clay Fuller can be found here.

Categories: Trade Based Financial crimes News