Trade Based Money Laundering and Correspondent Banking Risk

The International Chamber of Commerce in 2018 called Trade Based Money Laundering (TBML) the least understood financial crime method, estimating that hundreds of billions of US dollars pass through TBML schemes each year. Any firm providing financial support to trade finance in any form needs to have a thorough understanding of the risks of TBML and of Trade Related Terrorist Financing (TRTF) in order to manage and mitigate those risks. Correspondent banking (CB) is both a part of the trade based financing chain and is also an important activity in its own right. Any firm involved in CB relationships must be alert to the increasing regulatory and sanctions based scrutiny in this area.

This course uses a practical, hands-on approach to help participants to understand the risks inherent in TBML and TRTF, and CB, by using a risk-based approach to identify, manage, and mitigate those risks. It is appropriate for compliance professionals, client facing staff and operations staff working within trade financing business. The use of case studies, our trainer’s experience and expertise and a highly interactive format have all led to this being one of the most popular courses on TBML, TRTF and CB.

This course is appropriate for compliance/AML professionals, client facing staff and operations staff working within trade financing business.

After attending this course, participants will be able to:

• Explain the global threat of Trade Based Money Laundering and Terrorist Financing
• Apply relevant government and regulatory expectations in relation to Trade Based Money Laundering and Terrorist Financing as well as accepted best practice
• Using a risk-based approach, identify and mitigate correspondent banking risk in the trade financing supply chain
• Describe and identify simple and complex TBML and TRTF typologies
• Identify red flags relating to each stage of the trade supply chain
• Use practical prevention and detection techniques to Trade Based Money Laundering and Terrorist Financing
• Consider and apply appropriate actions when Trade Based Money Laundering and Terrorist Financing does occur

Why TBML and TRTF matters

• Global organised crime, its size nature and impact on the vulnerable
• The expectations of relevant global and local regulatory bodies
• Laws and regulations
• Guidance and best practices
• The impact of getting it wrong

The money laundering and terrorist financing risks in the trade supply chain

• Common terminology and documentation, including incoterms
• The payment ladder and relative risks
• Due diligence in the supply chain
• Reasons for abusing the global trade system
• Risk assessment and mitigating actions
• Sanctions risk
• Dual-use goods and proliferation finance

Correspondent banking risk in Trade

• What is correspondent banking?
• The money laundering and terrorist financing risks of correspondent banking
• The role of correspondent banking in trade
• Due diligence and red flag implications

Simple typologies

• Mispricing: over, under and multiple invoicing, uboating, value gaps
• Short, over, and phantom shipping, and obfuscation

Identifying and managing red flags

• Customer red flags
• Document red flags
• Transaction red flags
• Payment red flags
• Shipment red flags

More complex typologies

• The Black Market Peso Model
• Transshipment
• Use of free trade zones
• Tax evasion

Best practice and managing suspicious activities

• Lines of defence
• Management information
• Best practice due diligence controls
• Best practice operations questions and controls
• Identifying, reporting and investigating suspicions

Have the flexibility to deliver your In-House training in-person by one of our trainers at your premises, or virtually via Zoom, Teams or Webex.

Find out more about your Virtual or In-Person training experience below.