Researchers optimistic about measures to curb TBML

Despite the formidable challenges of combatting illicit trade and trade-based money laundering (TBML), several ongoing initiatives give cause for cautious optimism according to one of the researchers working on a two-year project examining illicit trade and money laundering risks in free trade zones.

Anton Moiseienko, a research fellow at the Centre for Financial Crime and Security Studies, has taken a broad look at efforts to counteract illicit trade and TBML in an article published on the Royal United Services Institute for Defence and Security Studies (RUSI) website.

London based RUSI is the world’s oldest independent think tank on international defence and security

Taking advantage of trade

Moiseienko argues that criminal exploitation of the global trade system comes in two basic forms: trade in illicit or untaxed goods and TBML.

Both forms of criminality take advantage of the sheer scale of global trade he says, citing the World Trade Organisation which estimated that in 2017 the value of merchandise exports was US$17.73 trillion.

Beyond a bill of lading and self-declared information, no one knows quite what is inside the giant containers that ship goods around the globe, Moiseienko says. 

Minimal container screening

Less than 20 per cent of all shipping containers are screened each year, making it easy for criminals to trade in illicit or untaxed goods or operate TBML schemes.

Some efforts to counter these crimes have been made. Moiseienko cites the passing of legislation in 2012 by US Congress requiring all incoming shipping containers to be screened abroad, in their ports of departure.

He also looks at the development internationally of Trade Transparency Units (TTUs) that now exchange data and information around the world and that are making a difference by indicating trade mispricing.

GFI and Egmont

Moiseienko critiques the work of Global Financial Information, the Washington based non-profit research and lobby group against illicit financial flows that has attracted not only well-deserved admiration but also some scepticism surrounding its methodologies.

He also contemplates expanding the dozen countries that have established domestic trade transparency units, and calls for the creation of a TTU network similar to the existing Egmont Group of financial intelligence units (FIUs) that was created to provide FIUs around the world with a forum to exchange information confidentially to combat money-laundering and terrorist financing.

Anton Moiseienko’s article, Have Your Cake and Trade It: Is it Possible to Promote Legitimate Commerce While Reducing Illicit Trade? can be found here.

Categories: Trade Based Financial crimes News

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