TBML challenges for bankers and enforcement officers examined

The problem of detecting and tackling money laundering has taxed bankers and law enforcement officers for decades according to one of the researchers working on a two-year project examining illicit trade and money laundering risks in free trade zones.

Jonathan Draper, a product strategist at BAE Systems, has taken look at how trade-based money laundering (TBML) adds a new dimension of complexity for financial institutions and law enforcement 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

60 interviews

Draper, along with co-author Anton Moiseienko, recently conducted over 60 interviews with bankers and law enforcement officers in the UK, Europe, North America, Middle East and Singapore.

With some notable exceptions, bank representatives shared that they have little or no capability to detect TBML behaviours unless they trigger existing ‘traditional’ money laundering transaction monitoring rules, which rely on identifying anomalous transactions.

Lack of awareness

Interviewees from the banking sector described low awareness and understanding of TBML typologies.

Attracting and retaining staff with the requisite expertise in both compliance and trade finance was universally cited as a major challenge.

Collaboration called for

Banks currently prioritise, investigate and report suspicious activity based on their own transactions and information, but organised crime groups and terrorists spread their activity across multiple banks and jurisdictions, thus evading detection.

Greater information sharing between banks could help with this but faces challenges relating to privacy and data protection. 

Jonathan Draper’s article, Addressing the Abuse of Trade for Money Laundering Purposes can be found here.

Categories: Trade Based Financial crimes News

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