Trade-Based Money Laundering

Since the onset of the global fight against money laundering, criminals have heavily exploited the financial system and physical money movement to launder their criminal proceeds. It was soon recognized that criminals misused the trading system, adding complexity to their schemes and concealing the origin of funds by mixing them with legitimate trade. The Financial Action Task Force (FATF) has identified the global trade system, with its interconnected supply chains, as vulnerable to money laundering and terrorist financing. Over the years, FATF has released several publications highlighting the risks associated with trade-based money laundering (TBML).

In 2020, FATF and the Egmont Group emphasized the role of Financial Intelligence Units (FIUs) in analyzing TBML-related Suspicious Transaction Reports (STRs) and developing sophisticated analyses of TBML patterns and schemes. This strategic analysis aims to enhance the understanding of risks for FIUs, other authorities, financial institutions, and the public, offering insights into TBML methods and their scale.

The UAEFIU report underscores the importance of strategic analysis in identifying TBML risks and aiding in the prioritization of inspections by customs services. By updating risk indicators and shedding light on emerging trends, the report serves as a vital tool for enhancing the detection and prevention of TBML activities.

Click here to view the full report.