Trade Based Money Laundering (TBML)

Introduction

Trade-based money laundering training provides a comprehensive overview of the methods, risks, and controls associated with TBML. Participants will learn to identify, assess, and mitigate exposure.

• Trainer/Delegates

• Course objectives

• Course topics: Introduction to TBML

• Stages of TBML

• Principal methods of TBML

• TBML risk assessment

• TBML controls

Introduction to TBML

• Definition of TBML: Financial Action Task Force (FATF) Definition

How money is laundered:

• Using banks

• Smuggling

• Trade-Based Money Laundering

Extent of the TBML problem:

• Comparison of TBML with overall money laundering

Regulatory response:

• Catch and penalise criminals

• Protecting government revenue

Stages of TBML

TBML training breaks down the full lifecycle, showing how illicit funds are hidden, moved, and reintegrated through global trade flows:

• Placement: conversion of illicit money into goods

• Layering: goods moved across international borders

• Integration: goods resold in legitimate markets

Principal Methods

• Under/over invoicing

• Incorrect quantity of goods: Phantom shipment

Incorrect quality of goods or services

TBML using gold as goods

Informal money transfers:

• Hawala – falsifying money transfers

• Black Market Peso Exchange

Fraud in trade:

• Transfer pricing

• VAT fraud

• Falsifying documents

• Accommodation transactions

Case Studies:

• Company X under-invoicing to avoid tax

• Company Y is using Hawala to transfer funds from Country A to a Tax Haven country and make it appear legitimate by transferring back to Country A as business income

TBML Risk Assessment

This trade based money laundering course highlights the assessment of risk across clients, institutions, and transactions, using real-world case studies and red-flag indicators to strengthen detection and monitoring practices.

• Assessment of risk on trade transactions Knowing who the Client is? Financial Institutions/Correspondent Banks

• Non-Banking Financial Institutions

• Money Exchanges

• Casinos

• Politically Exposed Persons (PEPs)

• Businesses that sell on cash

• Charities

• Professionals – Lawyers

• Case Study 1:  Bank X failing to recognise the PEP factor in a client

• Case Study 2: Company ABC, running a chain of restaurants, uses bank accounts to launder money by making the cash deposits appear as sales revenue from restaurants

Recognising the red flags

Client behaviour is included in TBML training

Connected parties:

• PEPs

• Shell Companies

• High Risk Jurisdiction Companies

• Related Companies

Monitoring the Transactions:

• Analysing financial information: Aligned with normal business activities?

• Origin of inward and destination of outward remittances

Trade Documents:

• Frequent requests for amendments

• Missing documents

• Goods shipped through high-risk or sanctioned countries

Training brings risk assessment, red flag recognition, transaction monitoring, and document analysis together, providing a complete framework for identifying and preventing trade-based money laundering.

TBML Controls

• KYC Profile and TBML

• Customer Due Diligence

• 1st Line of Defence – Front Office

• 2nd Line of Defence – Risk/Compliance Unit

• 3rd Line of Defence – Internal Audit

• Training

Training Objectives

Sessions provide in-depth knowledge of the various TBML forms, drawing on real-world examples across financial crime. Training includes money laundering, bribery and corruption, sanctions breaches, terrorist financing, tax evasion, and fraud.

Upon completion of Redcliffe’s trade based money laundering training, participants will be able to:

• Describe the objectives, incentives and methods of trade-based money laundering

• Identify the key related risks to trade transactions from a money laundering perspective

• Mitigate key risks by establishing appropriate controls within any organisation

Training Course Summary

Trade based money laundering training is an intensive session. Participants receive a comprehensive overview of TBML.

We examine its intersection with wider financial crimes, including bribery, corruption, sanctions evasion, tax fraud, and terrorist financing.

Designed for professionals in banking and trade finance, the programme explores the objectives, methods, and risks of TBML, and offers practical strategies for risk mitigation and compliance. Through engaging lectures, case studies, and discussions, participants gain actionable insights into TBML risk assessment and control mechanisms.

TBML training is led by a seasoned industry expert and tailored to real-world challenges faced by credit officers, relationship bankers, and trade professionals.