Some analysts have suggested that chaos in the illegal narcotics trade’s supply chains and financing operations due to coronavirus pandemic impacts may push drug barons towards trade-based money laundering (TBML) operations (Trade-based Financial Crime, 24 April 2020).
But data recently released suggests that the proceeds of illicit drugs that are accumulating in major US cities and along the border with Mexico show that the impacts of the coronavirus have actually curtailed TBML operations.
Supply chains disrupted
Federal authorities in Los Angeles seized more than US$3 million in three separate seizures of suspected drug proceeds in recent weeks according to a report in the Los Angeles Times.
It says that business closures, particularly in the Los Angeles fashion district, have disrupted the supply chains on which the drug cartels’ TBML operations rely.
Under scrutiny
Textile dealers in Los Angeles have been under close scrutiny for trade-based financial crime over recent years.
The US treasury department’s Financial Crimes Enforcement Network (FinCEN) issued in 2014 a geographic targeting order (GTO) that imposed additional reporting and recordkeeping obligations on certain trades and businesses located within the city’s fashion district.
The GTO is intended to enhance law enforcement’s ongoing efforts to identify and pursue cases against persons and businesses engaged in often trade-based laundering of US dollars to Mexico and Colombia on behalf of prominent drug trafficking organisations.
The Los Angeles Times article, Dirty money piling up in L.A. as coronavirus cripples international money laundering, can be found here.
Categories: Trade Based Financial crimes News
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