News
Trade-based Financial Crimes a Huge Hole in Enforcement Net, Says Analyst
By Brian Orsak
printThat global trade is a murky business is nothing new. Criminals were exploiting tax systems, limited record keeping and loose border controls long before there were banking compliance officers. But as efforts to stem financial crime have increased exponentially in recent years, governments and international organizations, such as the Paris-based Financial Action Task Force, have made tentative steps to address the problem. Furthermore, technological developments offer governments unprecedented ability to address the trade-based crime. There's only one problem, according to Nikos Passas, a professor who studies financial crime at Boston-based Northeastern University: governments aren't utilizing available tools. The failure of...
TO READ THE FULL STORY
Related News
Although investigators have little empirical insight into how often criminals exploit trade to transfer illicit value, the scope of trade-based money laundering is likely "overwhelming," according to John Cassara, a former U.S. Treasury Department official.
A long-negotiated economic treaty finalized Monday will require global banks to review billions of dollars in subsequent trade transactions for potential links to financial crimes, according to analysts.
A $400 million settlement with an Israeli bank accused of facilitating tax evasion and an ongoing probe into loan fraud and AML violations at a Citigroup affiliate seemingly have little in common, but they share at least one trait: the exploitation of a typically low-risk, trade-finance instrument.
There has been modest success in a decades-long effort to minimize the exploitation of gold. In many instances, money launderers have successfully transferred illicit proceeds through gold by simply tweaking its reported value in customs documents and other records.
An expected U.N. plan to tackle illicit financial flows and other global problems could make curbing the manipulation of trade invoices an international priority.
Long considered one of the toughest illicit finance schemes to crack, trade-based money laundering is on the rise in response to stricter regulatory oversight of financial institutions, U.S. investigators said Monday.
Criminals are exploiting inadequate safeguards in free trade zones to launder money, evade taxes and illegally ship material used to build weapons of mass destruction, according to an intergovernmental group.
The use of loan service businesses to cover costs while waiting for payments for goods or services is increasingly being exploited by money launderers based in Latin America, say analysts.
The U.S. Treasury Department's financial intelligence unit issued guidance Thursday on how to spot and report transactions tied to trade-based money laundering, a type of crime on the rise.
U.S. government investigators have become aware of a new subset of money laundering that takes advantage of the international market for professional services, according to a report issued by the U.S. State Department.
Financial institutions providing credit in international transactions should check for suspicious activity pointing to trade-based money laundering, a banking consortium said Thursday.
A government indictment released Wednesday charging an international network with sending electronics that can be used for weapons to Iran puts more pressure on banks to ensure their customers aren't aiding terrorism.
Evidence that high-profile terrorist groups are increasingly seeking to move money for their operations under the guise of legitimate trade has spurred financial experts to push for greater regulation, compliance professionals say.
Marc Hambach, an assistant director of the Dubai Financial Services Authority and head of its AML department, spoke with reporter Brian Orsak about the process of developing regulations for one of the fast growing financial hubs in the world.
Bank consultants say they are concerned that the cost of complying with Bank Secrecy Act (BSA) regulations for trade finance transactions could force some banks out of that line of business.
The Bush Administration is seeking a 7 percent budget increase next year for the U.S. Immigration and Customs Enforcement that includes about $4 million for units that investigate bulk cash smuggling and trade finance-related money laundering.
U.S. Immigration and Customs Enforcement official Kevin Delli-Colli spoke with Fortent Inform reporter Matt Squire on Nov. 28 about bulk cash smuggling and what banks should be looking for when it comes to trade transactions.