In its simplest definition, trade-based money laundering is the process of disguising the proceeds of crime and moving value (i.e., movement of money) using trade transactions to legitimize their illicit origins.
What is trade-based money laundering process?
For the purpose of this study, trade-based money laundering is defined as the process of disguising the proceeds of crime and moving value through the use of trade transactions in an attempt to legitimise their illicit origins.
What are red flags for trade-based money laundering?
Customers trying to launder funds may carry out unusual transactions. Firms should look out for activity that is inconsistent with their expected behavior, such as large cash payments, unexplained payments from a third party, or use of multiple or foreign accounts. These are all AML red flags.
What is the FATF report trade-based money laundering?
In 2006 the FATF released the report entitled Trade-Based Money Laundering (TBML), in which it identified the three major methods used by criminal organisations and terrorist financers to move money for the purpose of disguising its origins and integrating it into the formal economy.
What is trade-based money laundering techniques Ghost Shipping?
Ghost-shipping is fictitious trades where a buyer and seller collude to prepare all the documentation indicating goods were sold, shipped and payments were made.
What is an example of trade-based money laundering?
Typical TBML common techniques include: False reporting on invoices, such as commodity misclassification, commodity over- or under-valuation. Repeated importation and exportation of the same high-value commodity, known as carousel transactions. Commodities being traded that do not match the business involved.
Why is trade-based money laundering attractive?
Trade-based money laundering
What is red flag in trading?
A red flag is a warning or indicator, suggesting that there is a potential problem or threat with a company’s stock, financial statements, or news reports. Red flags may be any undesirable characteristic that stands out to an analyst or investor.
How many types of red flag are there in trade finance?
7 Red Flags: Protecting Against Fraud in Trade Finance.
Which of the following are money laundering red flag indicators?
Unusual transactions, discrepancies in the customer due diligence process, frequent transfers from accounts without logical explanations, VA-fiat conversion or vice versa, transactions from sanctioned locations, and multiple accounts of the same customer are some of the red flags shared by FATF.