Financial crime authorities are upping efforts to tackle trade-based money laundering (TBML), urging lenders to watch for complex corporate structures or trade flows, circular payment arrangements and inconsistencies in documentation. The warnings feature in new guidance from the Financial Action Task Force (FATF), an influential global standards-setting body. The document was produced in collaboration with the Egmont Group, an international organisation of various countries’ financial intelligence units. The guidance sets out several risk factors for TBML, which involves criminals moving illicit funds through the international trade system in order to disguise their origin. It says financial institutions should consider whether an importer or exporter’s corporate structure “appears unusually complex and illogical, such as the involvement of shell companies or companies registered in high-risk jurisdictions”. They should also assess its ownership model, staff arrangements and registered addresses. The guidance emphasises that banks should continue to monitor the underlying trade activity itself. Risk factors include trading activity that is outside a company’s typical profile, such as the sale of atypical goods or the use of shipping routes that are inconsistent with the wider industry. In terms of trade finance, it warns of traders making “unconventional or overly complex use of financial products,… continue reading
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Source: CTRM Center