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Fintelekt-ABA Webinar 5

Trade-Based Money Laundering: Emerging Risks and Mitigation Strategies

February 5, 2020

Fintelekt Advisory Services and Asian Bankers Association hosted its fifth webinar on February 5, 2020 on the topic of Trade-Based Money Laundering: Emerging Risks and Mitigation Strategies.

The hour-long session, which was free to attend, received record participation from banks in Asia and was attended by more than 200 participants from 26 countries.

The webinar was moderated by Arpita Bedekar, Director – Strategy and Planning, Fintelekt Advisory Services. The speakers were Lakshmi Kumar, Policy Director, Global Financial Integrity, Jane Lee, Business Solutions Specialist, Accuity, Shafath Mujawar, Faculty Member, Fintelekt Advisory Services.

Speakers used a variety of examples and case studies to elucidate trends in trade mis-invoicing, prevalent and emerging areas of risk within TBML, challenges in detecting TBML activities, growing regulatory expectations and mitigation strategies that need to be put in place by banks.

Some key takeaways from the webinar are as follows:

  • Around 80 per cent of global trade is open account trade involving no trade documentation. AML monitoring and controls set up by banks are therefore in a position to identify and intercept a very small proportion of the remaining global trade.
  • Regulation and supervisory efforts for each country need to be tailored to the nature of trade (open account or documentary trade) and sectors predominantly involved in trade within the country.
  • Some of the areas of high risk within TBML are trade mis-invoicing, forged or duplicate documents, services-based money laundering and dual use goods
  • Illegal trade in wildlife and in arts and antiquities are emerging typologies which allow criminals to move large values across jurisdictions
  • The absence of beneficial ownership information across institutions involved in the trade value chain makes it difficult to identify related party transactions
  • Free Trade Zones are high risk areas for TBML, due to inadequate regulatory oversight and weak procedures to inspect goods and register legal entities
  • Complexities in trade transactions such as multiple counterparties require banks to invest in robust due diligence
  • Banks and financial institutions should screen on a continuous basis to avoid the risk of sanctions non-compliance in vessel movements, name changes, ship-to-ship transfers and illicit shipments.
  • The complex trade eco-system coupled with dynamic regulatory changes requires banks to put in place a robust TBML programme that includes governance, training, technology and monitoring, quality assurance and internal audit to stay compliant and mitigate the risks.

A recording of the webinar is available on https://www.youtube.com/watch?v=VKAwjki8VmI

A schedule of upcoming Fintelekt-ABA webinars during 2020 is available on www.fintelekt.com/webinars