Global TBML scope and characteristics analysed in new paper

A new paper analysing the scope and characteristics of global trade-based money laundering (TBML) has been published.

The paper, Trade-Based Money Laundering: A Global Challenge, was co-authored by Global Financial Integrity, Fedesarrollo, Transparency International Kenya and Advocates Coalition for Development and Environment and draws on the technical and regional expertise of each of the organisations, based in the US, Colombia, Kenya and Uganda, respectively.

TBML methodologies

The study analyses the numerous challenges of TBML from a global policy perspective. It also provides an in-depth analysis of the most common TBML methodologies.

These include over- and under-invoicing of goods; misrepresentation of goods being shipped; multiple invoicing of goods; over- and under-shipment or phantom shipments; the black market peso exchange, and the use of informal value transfer systems. Mis-invoicing was the most common methodology, representing 63 per cent of cases.

Mapping TBML

The report also includes a worldwide mapping of TBML cases during a 10-year period in which cases were identified using official, publicly available sources.

Some 77 countries were affected by this activity. The US, Mexico, Colombia, China and Hong Kong were among the most affected nations.

Predicate offences

Of the predicate offences that generated laundered proceeds, the most common included drug trafficking (43 per cent of predicate offences); tax evasion or fraud (18 per cent); other fraud or scams (7 per cent), and corruption (6 per cent).

The report found that almost any type of merchandise can be purchased to launder illicit proceeds used in TBML schemes. The most common included cars or other vehicles (24 per cent of all types of products mentioned); metals and minerals (17 per cent); agricultural products (13 per cent), and textiles (11 per cent).

Policy perspectives

The report concludes with an analysis of current policy efforts as well as recommendations for ways to bolster the fight against TBML in the future.

Recommendations include conducting education campaigns and raising awareness of TBML and its risk factors; convening inter-agency task forces, and implementing national beneficial ownership registries.

The paper, Trade-Based Money Laundering: A Global Challenge, can be found here.


Categories: Trade Based Financial crimes News

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