Trade-Based Money Laundering (TBML)
Exploitation of international trade transactions to transfer value across borders and obscure the origins of criminal proceeds. Methods include over/under-invoicing, multiple invoicing for the same goods, phantom shipments, and misrepresentation of goods or services.
What it is
Exploitation of international trade transactions to transfer value across borders and obscure the origins of criminal proceeds. Methods include over/under-invoicing, multiple invoicing for the same goods, phantom shipments, and misrepresentation of goods or services.
Control objective
Detect trade-based money laundering through analysis of pricing anomalies, shipment discrepancies, and payment patterns that deviate from legitimate trade norms, ensuring timely escalation and SAR submission.
Data required
- Invoice amounts, quantities, and unit prices
- Goods description and HS/tariff codes
- Shipping documents (bill of lading, packing lists)
- Counterparty details and jurisdictions
- Market reference prices for declared goods
- Payment terms and settlement patterns
- Historical trade volumes between counterparties
- Sanctions and PEP screening results for trade parties
Related typologies (Money Laundering)
Rapid Movement of Funds
Funds received and immediately transferred onward with minimal dwell time, suggesting the account is being used as a pass-through to layer illicit proceeds and obscure audit trails.
Structuring / Threshold Avoidance
Deliberate splitting of transactions to remain below reporting thresholds or monitoring triggers. Commonly associated with layering proceeds of crime or avoiding CTR filings.
Behavioural Change Indicators
Sudden or unexplained changes in a customer's transaction behaviour relative to their established profile, such as new geographies, increased volumes, or different payment types, potentially indicating account takeover or use for laundering.
Mule Account Activity
Accounts used to receive and rapidly disburse funds on behalf of criminal networks. Mule accounts are often opened by individuals who are recruited, coerced, or deceived into facilitating the movement of illicit proceeds.
Shell Company Indicators
Use of corporate entities with no genuine commercial activity to obscure beneficial ownership, layer funds, or create false invoicing chains. Shell companies are commonly used in trade-based money laundering and corruption schemes.