FATF report highlights importance of customs services in TBML fight

Customs services play the role of sentinels for illicit trade activity according to the recently published report by the Financial Action Task Force (FATF) in collaboration with Egmont Group to help the public and private sector with the challenges of detecting trade-based money laundering (TBML – Trade-based Financial Crime, 11 December 2020).

Trade-Based Money Laundering: Trends and Developments says customs authorities are in a unique position for detecting the use of international shipments for illicit purposes, although their efforts to do this must be tempered by the need to handle an ever-increasing volume of international trade and balance the analysis and inspection of cargo shipments with the need to clear shipments quickly.

Capacity concerns

This means that it is important to ensure that customs services have sufficient capacity to examine shipping documentation and financial intelligence provided by domestic financial intelligence units (FIUs) and law enforcement agencies (LEAs).

This, the report suggests, can be addressed by establishing dedicated units or divisions within customs services to focus on this area and thus ensure that counter-TBML efforts are maximised or provide for closer inter-agency cooperation.

Synchronised collaboration

Close collaboration between customs agencies and FIUs greatly enhances the collective capacity to identify TBML by linking suspicious trade activity with suspicious financial activities the report says.

It says it is particularly important that customs authorities, FIUs and LEAs synchronise their anti-money laundering and counter financing of terrorism efforts, especially in countries with elevated TBML risk.

Case study

One example of good practice in terms of inter-agency cooperation provided by the report comes from Peru, where the FIU provides in-house internships for Peruvian customs authority officials.

This allows, for example, for an official specialised in customs operations to develop skills while working as an intern at the FIU, developing knowledge on financial analysis, and preparing financial intelligence reports that will be ultimately sent to the intern’s agency.

Using this approach aims to help the expert understand how both agencies work.

FATF’s Trade-Based Money Laundering: Trends and Developments report can be found here.



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