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Unveiling the Secrets: Case Studies of Trade-based Money Laundering

Understanding Trade-Based Money Laundering

Trade-based money laundering (TBML) is a complex scheme used for illicit financial activities, such as facilitating money flows, evading taxes, and disguising the origins of funds. This method of money laundering involves manipulating international trade transactions to move illicit funds across borders while making them appear legitimate. In this section, we will provide an overview of trade-based money laundering and explore the methods and techniques commonly used in such cases.

Overview of Trade-Based Money Laundering

Trade-based money laundering cases have been identified in multiple countries and are known for their complexity and sophistication. These cases often involve a combination of methods, including trade mis-invoicing , false trade documentation, and manipulation of commodity prices, among others. By exploiting the complexities of international trade, criminals can disguise the true nature of their transactions and move illicit funds across borders.

Trade-based money laundering can take various forms, including overvaluation of exports, undervaluation of imports, and multiple invoicing for a single shipment. These techniques allow criminals to manipulate the value or volume of goods declared in trade transactions, enabling the movement of illicit funds while creating a facade of legitimate trade ( FATF ).

Methods and Techniques Used in Trade-Based Money Laundering

To execute trade-based money laundering schemes, criminals employ several methods and techniques. These include:

Trade Mis-Invoicing: This method involves deliberately misrepresenting the value or volume of goods in trade transactions. Criminals may overvalue exports or undervalue imports to manipulate the movement of funds and obscure the illicit origins of the money.

Falsified Trade Documentation: Criminals often create false documentation, such as invoices, bills of lading, and customs declarations, to support fraudulent trade transactions. These falsified documents provide a cover for illicit financial activities and help legitimize the movement of funds.

Manipulation of Commodity Prices: Another technique employed in trade-based money laundering is the manipulation of commodity prices. Criminals may artificially inflate or deflate the prices of commodities involved in trade transactions, allowing for the movement of illicit funds while creating the appearance of legitimate business activities.

Trade-based money laundering cases can be highly intricate and require sophisticated methods to trace and identify illicit activities. Financial institutions and regulatory authorities play a crucial role in combating trade-based money laundering by being vigilant in detecting red flags and suspicious patterns related to these schemes ( Alessa ). By understanding the methods and techniques used, organizations can enhance their ability to detect and prevent trade-based money laundering and contribute to the fight against financial crime.

In the subsequent section, we will explore real-world case studies of trade-based money laundering, shedding light on notable instances where this method has been employed for illicit purposes.

Case Studies of Trade-Based Money Laundering

To gain a deeper understanding of the complexities and real-world implications of trade-based money laundering, it is essential to examine prominent case studies. Two significant cases that shed light on the intricacies of this illicit activity are the Bank of Credit and Commerce International (BCCI) case and the Black Market Peso Exchange (BMPE) case. Additionally, there are other noteworthy trade-based money laundering cases worth exploring.

The Bank of Credit and Commerce International (BCCI) Case

The Bank of Credit and Commerce International (BCCI) case stands as a stark example of trade-based money laundering. The BCCI utilized various methods, including false documentation, shell companies, fraudulent invoices, and overvalued goods, to move money for drug traffickers, terrorists, and organized crime figures. These illicit activities allowed the bank to launder billions of dollars ( Financial Crime Academy ).

The BCCI case highlights the importance of robust anti-money laundering measures and the need for financial institutions to exercise due diligence in detecting and preventing trade-based money laundering. The case led to significant regulatory reforms and increased scrutiny in the banking sector.

The Black Market Peso Exchange (BMPE) Case

The Black Market Peso Exchange (BMPE) is another well-known instance of trade-based money laundering. In this scheme, drug cartels in Latin America engage in trading their drug proceeds for goods in the United States. These goods are then sold, generating clean money and allowing the cartels to legitimize their illicit proceeds.

One fascinating aspect of the BMPE case is that legitimate businesses unknowingly become involved in the money laundering process. They sell goods at a discount to intermediaries, who then sell the goods to cartels in the U.S., facilitating the laundering of illicit funds. The international scope and impact of the BMPE can be seen in cases involving countries like Colombia, Mexico, and the Dominican Republic.

Other Noteworthy Trade-Based Money Laundering Cases

In addition to the BCCI and BMPE cases, there are several other noteworthy instances of trade-based money laundering. While the specific details and methodologies may vary, these cases illustrate the global nature of trade-based money laundering and its impact on various industries and economies.

One notable case is the involvement of Wachovia Bank, which allowed drug cartels in Mexico to launder nearly USD 390 billion through its branches between 2004 and 2007. The bank’s failure to control the source of funds and its facilitation of money laundering through different transactions resulted in a $160 million fine, highlighting the significance of robust anti-money laundering procedures in financial institutions.

These case studies serve as cautionary tales and emphasize the need for effective detection, investigation, and prevention of trade-based money laundering. By studying these examples, authorities, financial institutions, and regulatory bodies can enhance their understanding of the techniques employed and implement stronger measures to combat this illicit activity.

Red Flags and Indicators of Trade-Based Money Laundering

Trade-based money laundering (TBML) involves the exploitation of international trade transactions to facilitate illicit financial activities. Detecting and preventing TBML requires an understanding of the red flags and indicators associated with this form of money laundering. In this section, we will explore three key indicators of TBML: trade mis-invoicing, falsified trade documentation, and manipulation of commodity prices.

Trade Mis-Invoicing

One of the most common methods used in TBML schemes is trade mis-invoicing. This involves manipulating the value or volume of goods declared in trade transactions to either overvalue exports or undervalue imports, enabling the movement of illicit funds ( FATF ).

For example, in a trade mis-invoicing scheme, exporters may under-invoice goods to move money out of one country, while importers may over-invoice the same goods to bring the money back in, effectively legitimizing illicit funds ( Alessa ). By manipulating the value of goods shipped, criminals can transfer value across borders, disguising the true nature of the funds involved.

Falsified Trade Documentation

TBML strategies heavily rely on the manipulation of trade documents, including invoices, bills of lading, customs declarations, and shipping receipts. Criminals may falsify these documents to misrepresent the nature, quantity, or value of the goods being traded.

By falsifying trade documentation, money launderers can create a veneer of legitimacy for illicit funds. For instance, criminals may overstate the value of goods to move excessive funds across borders or understate the value to avoid detection by authorities. Monitoring and verifying the authenticity of trade documentation is crucial in detecting potential TBML activities.

Manipulation of Commodity Prices

The manipulation of commodity prices is another red flag of TBML. Criminals may artificially inflate or deflate the prices of goods involved in international trade transactions to facilitate money laundering. By manipulating prices, money launderers can manipulate the value of trade and disguise the true origin or destination of funds.

The manipulation of commodity prices can involve various techniques, such as overvaluation or undervaluation of goods, price padding, or misrepresentation of quality or quantity. These manipulations aim to create discrepancies between the declared value of goods and their actual market value, making it difficult for authorities to trace the illicit funds.

Recognizing these red flags and indicators is essential for financial institutions, regulatory bodies, and law enforcement agencies involved in combating TBML. By understanding the techniques employed by money launderers, stakeholders can implement effective measures to detect and prevent trade-based money laundering.

Challenges and Implications of Trade-Based Money Laundering

Trade-based money laundering poses significant challenges and has far-reaching implications for financial institutions, governments, and the global economy. Understanding these challenges and implications is crucial for effectively combating this illicit activity.

International Scope and Impact

Trade-based money laundering cases are complex and have been identified in multiple countries. This illicit practice transcends borders, making it difficult to detect and investigate. Criminal organizations exploit the global trade system to move illicit funds and disguise the origins of their illicit activities. The international nature of trade-based money laundering requires collaboration and information sharing among countries to effectively combat this threat.

The impact of trade-based money laundering extends beyond financial institutions and law enforcement agencies. It has detrimental effects on economies, as it undermines legitimate trade, distorts commodity prices, and hampers economic growth. Furthermore, trade-based money laundering can be used for various criminal purposes, such as facilitating illicit financial flows, evading taxes, and financing illicit activities, including terrorism. Recognizing the international scope and impact of trade-based money laundering is crucial in developing effective strategies to combat this illicit practice.

Detecting and Investigating Trade-Based Money Laundering Cases

Detecting and investigating trade-based money laundering cases present significant challenges due to the complex nature of these schemes. Criminals employ various techniques, such as trade mis-invoicing, falsified trade documentation, and manipulation of commodity prices, to obscure the illicit nature of their activities ( FATF ). These schemes can involve multiple parties across different jurisdictions, making it challenging to trace the illicit funds and identify the individuals involved.

Financial institutions play a crucial role in detecting suspicious trade transactions and reporting them to the appropriate authorities. However, identifying trade-based money laundering red flags amidst legitimate trade activities can be complex and requires robust monitoring systems and trained staff. Inadequate resources, limited expertise, and the evolving nature of trade-based money laundering techniques further hinder effective detection and investigation of these cases.

To enhance detection and investigation capabilities, financial institutions and law enforcement agencies must collaborate, share information, and employ advanced analytical tools. Training programs should be implemented to enhance the knowledge and skills of compliance and law enforcement professionals in identifying trade-based money laundering indicators. By strengthening detection and investigation efforts, authorities can disrupt trade-based money laundering networks and hold the perpetrators accountable.

The Role of Financial Institutions in Combating Trade-Based Money Laundering

Financial institutions play a vital role in combating trade-based money laundering. They serve as the frontline defense against illicit financial flows facilitated through trade transactions. It is essential for financial institutions to implement robust anti-money laundering (AML) programs and due diligence measures to mitigate the risks associated with trade-based money laundering.

Financial institutions should establish effective internal controls and monitoring systems to detect suspicious trade transactions and identify red flags indicating potential trade-based money laundering activities. These controls should include transaction monitoring, customer due diligence , and know-your-customer procedures tailored to identify trade-related illicit activities. Regular training and awareness programs for employees are crucial to ensure a high level of vigilance and compliance with AML regulations.

Collaboration and information sharing among financial institutions, regulatory authorities, and law enforcement agencies are essential in combating trade-based money laundering. Financial institutions should actively participate in public-private partnerships and information-sharing initiatives to enhance the effectiveness of their AML efforts. Reporting suspicious trade transactions to the relevant authorities is critical for investigations and the successful prosecution of trade-based money laundering cases.

By taking a proactive approach and implementing robust AML measures, financial institutions can contribute significantly to the collective efforts in combating trade-based money laundering. This collaboration between financial institutions, governments, and regulatory bodies is essential to safeguard the integrity of the global financial system and protect economies from the adverse effects of trade-based money laundering.

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U.S. Government Accountability Office

Trade-Based Money Laundering: U.S. Government Has Worked with Partners to Combat the Threat, but Could Strengthen Its Efforts

Some criminal and terrorist organizations use trade-based money laundering to disguise illicit proceeds and fund their operations. These kinds of schemes can rely on misrepresenting the price, quantity, or type of goods in trade transactions.

To help fight this practice, Immigration and Customs Enforcement’s Trade Transparency Unit has partnered with 17 countries to exchange and analyze trade data. The program has faced challenges. For example, other nations may collect trade data in different formats, making comparisons difficult.

We made 2 recommendations , including that ICE develop a strategy to make these partnerships more effective.

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What GAO Found

Different types of criminal and terrorist organizations use trade-based money laundering (TBML) to disguise the origins of their illicit proceeds and fund their operations. TBML schemes can rely on misrepresenting the price, quantity, or type of goods in trade transactions, but other methods are also used. For example, some drug trafficking organizations from Latin America have used a type of TBML scheme known as the Black Market Peso Exchange (BMPE) to launder funds. BMPE schemes involve merchants who—wittingly or not—accept payment in illicitly derived funds, often from third parties to a trade transaction, for exports of goods. In carrying out TBML schemes, criminal and terrorist organizations use various goods, including precious metals and automobiles (see fig.). U.S. officials and other sources have identified a number of countries as being at particular risk for TBML schemes. Available evidence indicates that the amount of TBML occurring globally is likely substantial. However, specific estimates of the amount of TBML occurring around the world are not available.

Examples of Goods Commonly Used in Trade-Based Money Laundering Schemes

Officials and reporting from relevant international bodies and selected partner countries, and knowledgeable sources recommended various practices for countries to consider to combat TBML, which GAO grouped into five categories: (1) partnerships between governments and the private sector, (2) training, (3) sharing information through domestic interagency collaboration, (4) international cooperation, and (5) further research on challenges to combating TBML.

The U.S. government's key international effort to counter TBML is the Trade Transparency Unit (TTU) program under the Department of Homeland Security's (DHS) Immigration and Customs Enforcement (ICE). ICE set up TTUs in 17 partner countries with the goal of exchanging and analyzing trade data to identify potential cases of TBML. While TTUs have played a role in some TBML investigations, the TTU program has experienced various challenges, including lapses in information sharing between ICE and the partner TTUs, differing priorities between ICE and partner TTUs in pursuing TBML investigations, and limitations in the data system that ICE and the TTUs use. However, ICE has not developed a strategy to increase the effectiveness of the TTU program or a performance monitoring framework to assess the results of its work with partner TTUs. As a result, ICE does not have a clear guide on how best to operate the TTU program and cannot make management decisions based on program results. In addition to the TTU program, the U.S. government collaborates with partner countries and international bodies through a range of other activities, such as developing international anti-money laundering standards, providing training and technical assistance, establishing information-sharing methods, and providing ongoing law enforcement cooperation.

Why GAO Did This Study

TBML involves the exploitation of international trade transactions to transfer value and obscure the origins of illicit funds. Various observers have noted that although TBML is a common form of international money laundering, it is one of the most difficult to detect due to the complexities of trade transactions and the sheer volume of international trade, among other things.

This report examines (1) what the available evidence indicates about the types and extent of international TBML activities, (2) the practices international bodies, selected countries, and knowledgeable sources have recommended for detecting and combating TBML, and (3) the extent to which ICE has effectively implemented the TTU program and steps the U.S. government has taken to collaborate with international partners to combat TBML. GAO analyzed U.S. agency and international body data and documentation, conducted a literature review, and interviewed U.S. officials and selected knowledgeable sources.

Recommendations

GAO recommends that DHS develop (1) a strategy to maximize TTU program effectiveness and (2) a performance monitoring framework for the TTU program. DHS concurred with the first, but did not concur with the second recommendation, citing data it already collects and challenges it faces. GAO continues to believe the recommendation is valid, as discussed in the report.

Recommendations for Executive Action

Full report, gao contacts.

Kimberly Gianopoulos Director [email protected] (202) 512-8612

Office of Public Affairs

Chuck Young Managing Director [email protected] (202) 512-4800

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Home Research/Analysis Trade-Based Money Laundering: A Global Challenge

Trade-Based Money Laundering: A Global Challenge

February 2, 2023

A new publication analyzing the scope and characteristics of global trade-based money laundering (TBML) finds that this illicit activity poses complex problems for law enforcement while also undermining global development. Indeed, while various estimates put TBML activity in the hundreds of billions, or even trillions of dollars annually, “a comprehensive mapping of known TBML [court] cases worldwide from 2011 to 2021” identified just US$60 billion in money laundering, according to the paper. Highlighting the development impact, the study noted that “when TBML goes unchecked, it has adverse effects on economies and societies as it perpetuates criminal activities …corruption, and tax evasion.”

The paper, Trade-Based Money Laundering: A Global Challenge , was co-authored by Global Financial Integrity (GFI), Fedesarrollo, Transparency International Kenya and Advocates Coalition for Development and Environment (ACODE) and draws on the technical and regional expertise of each of the organizations – based in the United States, Colombia, Kenya and Uganda, respectively. The study analyzes the numerous challenges of TBML from a global policy perspective.

The publication describes TBML as “disguising the proceeds of crime [by] moving value through the use of (legitimate) trade transactions.” The report provides an in-depth analysis of the most common TBML methodologies, which 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 percent of cases.

To better understand the scope and characteristics of TBML, the research team presents a comprehensive mapping of TBML cases worldwide during a 10-year period in which cases were identified using official, publicly available sources. Some 77 countries were affected by this activity. The United States, Mexico, Colombia, China and Hong Kong were among the most-affected nations.

In terms of the underlying criminal activity that generated laundered proceeds (i.e the predicate offenses), the most common included drug trafficking (43 percent of all predicate offenses mentioned), tax evasion/tax fraud (18 percent), other fraud or scams (7 percent) and corruption (6 percent). 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/transportation vehicles (24 percent of all types of products mentioned), metals and minerals (17 percent), agricultural products (13 percent), and textiles (11 percent).

The report concludes with an analysis of current policy efforts as well as recommendations for ways to bolster the fight against TBML going forward. These recommendations include:

• Conduct education campaigns and raise awareness of TBML and its risk factors. 
• Convene inter-agency task forces, since combating TBML requires close coordination among numerous government agencies.
• Implement national beneficial ownership registries as a means to prevent shell and front companies, a common thread in TBML cases worldwide.
• Ensure that beneficial ownership information extends to trade, especially foreign companies doing business in the country and shipping companies involved in international trade.
• While efforts have been made to strengthen international information exchange, ensure that this information exchange occurs in real time so that importing and exporting countries can respond more quickly. 
• Utilize new technologies to assess pricing of trade transactions, especially since misinvoicing was one of the most common methods of TBML identified. 
• Ensure that national anti-corruption strategies cover international trade and ports. 
• Strengthen supervision over free trade zones, which may have simplified tax processes but should nonetheless have appropriate, robust measures in place to combat TBML. 
• Since customs agencies are on the frontline in the fight against TBML, ensure that they have the adequate financial, human, and technological resources to do their job effectively.

This publication was produced as part of Capacity Building to Address Illicit Financial Flows and Boost Domestic Resource Mobilization, a project implemented by Global Financial Integrity in partnership with leading civil society organizations in Kenya, Uganda and Colombia and with the support of the Government of Norway. The project aims to curtail illicit financial flows (IFFs), which are illegal movements of money or capital from one country to another. Left unchecked, IFFs contribute to insecurity and deprive developing countries of much-needed resources and revenues. Through research, advocacy, and capacity-building, the project raises awareness of this issue and promotes effective policy solutions that leverage the expertise of civil society, governments, and international organizations.

Para leer el comunicado de prensa en español haga click acá.

How trade-based money laundering works and its impact on world finances

Trade-based money laundering relies on legitimate global trade channels to move and hide huge amounts of money. Image:  Unsplash.

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• Trade-based money laundering and associated tax evasion is big business.
• Financial losses from these crimes in developing countries totalled $9 trillion between 2008 and 2017.
• Global trade complexities make tackling this type of money laundering difficult, but not impossible.

Money laundering is big business, so big, that to handle the movement of enormous sums of money, fraudsters are increasingly turning to Trade-Based Money Laundering (TBML). In developing countries, TBML and associated tax evasion contributed to almost $9 trillion in losses between 2008 and 2017. Tackling TBML is complicated by cross-jurisdiction trade, multinational companies, and globalized trade pathways.

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How ai is transforming the fight against money laundering, 4 key steps to support cross-border payments and digital trade growth, the moving parts of tbml.

Money laundering, used to legitimize monies from some of the most grievous crimes, is classified by the Financial Action Task Force (FATF) into three main areas:

• Use of legitimate underlying financial systems, e.g. check and wire transfers.

• The physical movement of money, e.g. cash couriers.

• The physical movement of goods through the trade system (TBML).

TBML fraudsters use certain methods to facilitate the crime:

Invoicing scams

Mispricing, also called trade misinvoicing, is a common technique used in TBML. Goods invoices are deliberately misrepresented in terms of value, type, or volume. The technique involves over or under-invoicing and can also use a system of multiple-invoicing, also known as split-invoicing.

Phantom shipments

Some TBML scams use phantom shipments – shipments of goods that don’t occur, or that don’t exist. Fake documentation is generated as if the goods will be shipped. Foreign remittances are received by the exporters as part of import/export collusion. The whole process looks legitimate, money is exchanged, but no actual goods are shipped.

Over or under-shipment

This is allegedly the most common form of transactions used to facilitate TBML across borders. The seller ships more/less than the invoiced quantity or quality of goods thereby misrepresenting the true value of goods in the documents. The effect is similar to over/under invoicing.

The trick in the mechanisms used in TBML fraud is that they look legitimate. By appearing as real-world transactions and ticking the regulatory boxes, they can more easily go under the radar. Whatever mechanism is used to move money or hide funds, the ultimate outcome is to overcome structures put in place to prevent this type of fraud. Regulations and other structures attempt to prevent this type of sophisticated and highly obfuscated activity. However, some contradictions in these attempts may be thwarting the wider handling of TBML.

What is the World Economic Forum doing about digital trade?

The Fourth Industrial Revolution – driven by rapid technological change and digitalization – has already had a profound impact on global trade, economic growth and social progress. Cross-border e-commerce has generated trillions of dollars in economic activity continues to accelerate and the ability of data to move across borders underpins new business models, boosting global GDP by 10% in the last decade alone.

The application of emerging technologies in trade looks to increase efficiency and inclusivity in global trade by enabling more small and medium enterprises (SMEs) to repeat its benefits and by closing the economic gap between developed and developing countries.

However, digital trade barriers including outdated regulations and fragmented governance of emerging technologies could potentially hamper these gains. We are leading the charge to apply 4IR technologies to make international trade more inclusive and efficient , ranging from enabling e-commerce and digital payments to designing norms and trade policies around emerging technologies (‘TradeTech’).

Contradictions that oil the wheels of TBML

In a recent report, the Government Accountability Office (GAO) found that around 80% of international trade processed through financial institutions is performed using “open account” trade, i.e. one that is not financed by the bank. The GAO described this tactic as “one of the primary vulnerabilities of the US financial and trade systems”. The GAO goes on to describe how open account trade has inherent vulnerabilities – it uses standard anti-money laundering (AML) and sanction screening for payment processing. Suspicious Activity Reports (SARs) are required to be lodged with FinCEN as part of the process. This should, in theory, be enough to spot fraud. However, according to the GAO report, “Subject-matter experts and representatives of banks say a bank’s ability to identify indicators associated with TBML is limited for open-account transactions”. This contradiction is the pivot upon which TBML turns.

These mechanisms are recognized as weaknesses in trade processes and help drive TBML. The regulations themselves show this to be true. For example, in 2019, 1.15 million reports were submitted on money laundering; only 0.2% related to TBML – the figures do not add up, mismatching the actual figures for TBML-based fraud which currently stands at around 30% of all money laundering crimes. In terms of SARs, the lag time contradicts the ability to spot fraud on-the-fly. The recent FinCEN SAR leaks debacle demonstrates the issues with SARs.

Ill-gotten gains of TBML

The inability to spot fraud that flies under the radar of legitimate checks and measures leads to serious crimes and can ruin lives or worse. TBML laundered money leads to:

• Movement of corrupt funds: In the UK, alone, £100 billion of “dirty money” is moved each year.

• Human trafficking: At any one time there are over 40 million enslaved and 152 million in child labour around the world.

• Tax evasion: The global estimate of capital income tax evasion is around $189 billion per year – TBML may be used to help in avoiding sanction lists.

• Evasion of currency restrictions: FinCEN is aware of the use of TBML methods to evade current restrictions. FinCEN released an advisory on TBML activity involving “funnel accounts”. These are accounts where an individual or business account in one jurisdiction receives multiple cash deposits. These deposits are usually under the reporting threshold to avoid suspicion. The funds are then quickly withdrawn via a different location.

• Evasion of import duties on luxury goods: Similar to tax evasion, but luxury goods, such as watches and cars, are often also part of over or under-invoicing scams.

Hiding in plain sight

US Customs and Border Protection (CBP) recorded that on a typical day in 2019, around 79,000 containers and $7.3 billion worth of goods entered the US through ports of entry. This massive movement of traded goods offers fraudsters enormous opportunities to hide in plain sight. TBML is successful because it uses the very structures that have been put in place to prevent fraud: documentation, customer/invoicing processes, and open trade accounts are all twisted by fraudsters to hide or obfuscate the illegitimate movement of money. When trading partners transact, they do so without bank intervention – the trade flowing outside the normal confines of the payment system. It is this divergence of systems and processes that allows fraudsters to find a chink in the financial insitutions armour. The AML process needed to tease out the complex nature of TBML requires a smarter approach.

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Investigating Trade-Based Money Laundering

Trade-based money laundering is among the most sophisticated methods for cleaning dirty money. It involves a variety of schemes designed to obscure the documentation of legitimate trade transactions. It’s also one of the most difficult to detect, and a serious challenge for compliance officers and investigators.

Join financial crime compliance advisory and training specialist Michael Schidlow, as he examines one of the most lucrative forms of money laundering.

The webinar will cover:

• Trends in trade-based money laundering
• The use of shell companies to launder money
• Methods of comingling legitimate and illegitimate assets
• Common red flags of trade-based money laundering
• Investigative techniques to detect trade-based money laundering

Webinar Presenter

Michael schidlow.

Michael Schidlow is a financial crime compliance advisory and training specialist who has held leadership positions in the legal, compliance, and audit fields. Most recently, Schidlow has served as the director of financial crime risk training for HSBC’s Global Internal Audit function. He delivered training and guidance on anti-money laundering, sanctions, anti-bribery and corruption, and fraud. Schidlow also led emerging risk advisory, consulting on audit scoping and planning.

He is a Certified Fraud Examiner (CFE), Certified Anti-Money Laundering Specialist (CAMS), holds ACAMS Advanced Certification in AML Audit (CAMS-Audit) and is a licensed attorney.

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Trade Based Money Laundering - Case Studies

Bachir El Nakib  The Financial Services Businesses are not the only entities that confront money laundering risks, although law enforcement agencies efforts to combat money laundering have focused primarily on the financial system, money laundering poses a threat to non financial businesses as well, particularly those engaged in global trade. Trade Based Money Laundering is an important channel of criminal activities, and with the growth of global trade, TBML has became an attractive vehicle for moving dirty money.

It is useful to look at an actual case study concerning money laundering and fraud to get a better understanding of the techniques perpetrators use and to see them operate in a real-life situation. It is also useful to look at red flag indicators which, if monitored and incorporated into an institution’s anti-money laundering (AML) program, will be effective in combating the illegal movement of monies. There are three main methods by which criminals, money launderers and terrorist financiers move money through the placement, layering and integration stages: The first uses the financial system by means of multiple cash deposits, cheques, credit cards, investment products, insurance and wire transfers.

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