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Trade-Based Money Laundering: Trends and Developments

Image culled from Financial Crime News

Trade remains weakly regulated for money laundering in-spite of widespread evidence of its vulnerability and use. Trade-based money laundering (TBML) trailed the pandemic, with numerous counterfeit COVID-19 equipment being sold, alongside fraudulent transactions, phantom shipping of goods and misinvoicing. To ensure long-term guidance, the FATF, in partnership with the Egmont Group of Financial Intelligence Units (Egmont Group), released a document titled “Trade-Based Money Laundering: Trends and Developments” in December 2020. 


Recognising the opportunity for money laundering and terrorist financing through trade and trade financing processes, the document noted that its key finding is the need for: 

“Greater awareness about all aspects of the trade process, including how different financing processes are managed, would likely increase opportunities to detect and successfully disrupt [trade-based money laundering and terrorist financing] TBML/TF” 

Indeed, this symbolises the need for a reactive regulatory framework based on thorough understanding which is best achieved through public-private collaboration. 

See document here