MENA trade-based financial crime reference guide launched

By Mark Ford on October 28, 2022

With a long tradition of trade, the Middle East and North Africa (MENA) region shares trade-based financial crime (TBFC) typologies with other global trading hubs, according to a new guide published by the MENA chapter of the Global Coalition to Fight Financial Crime (GCFFC) and the MENA Financial Crime Compliance Group (MENA FCCG).

But the region also exhibits its own specific typologies that reflect the unique risks in the region according to the MENA trade-based financial crime reference guide.

Objectives and scope

The guide aims to provide a single, accessible source of knowledge for compliance professionals, supervisory bodies, customs officials and law enforcement agencies.

It provides an understanding of how the trade system can be abused, what methods are available to detect these abuses, and how information can be deployed by the authorities to prevent further occurrences of TBFC.

Although the guide was created with a specific focus on how TBFC methodologies are experienced in the MENA region, the authors say it has universal relevance to all practitioners who deal with the international trade system.

Unique risks

Amongst TBFC typologies that reflect the MENA region’s unique risks is the area’s exposure to sanctioned countries such as Iran and Syria, which amplifies, for example, the region’s vulnerability to transshipment risks, such as when goods are transferred from one mode of transport to another such as from a vessel to a truck.

Iran’s geographical location makes it a natural conduit for international trade, and the guide provides a case study showing how in 2017, American Export Lines was able to evade sanctions by shipping cars to landlocked Afghanistan via Iran. Used and junked cars were exported to Iran by ship but then transferred to trucks for the onward overland journey across Iran to Afghanistan.

Additional risks

Iran and Syria are subject to either UN sanctions or unilateral sanctions imposed by the EU or individual states in respect of weapons of mass destruction (WMD) and their delivery systems is a major threat to international peace and security according to the guide.

It provides two case studies regarding targeted financial sanctions related to WMDs, both of which involve companies or individuals in the UAE with connections to Iran’s nuclear and ballistic missile programmes.

List-based sanctions

Countries frequently featured in list-based sanctions programmes are also discussed in the guide. These programmes target named individuals and entities associated with certain current or former governmental regimes that may threaten the stability of the country or region or commit large scale human right abuses.

Countries in or bordering the MENA region with designated individuals or entities in list-based sanctions programmes include Iran, Libya, Tunisia, Afghanistan, Lebanon, Egypt and Somalia.

An English version of the MENA trade-based financial crime reference guide can be found here.

An Arabic version of the MENA trade-based financial crime reference guide can be found here.