Trade Based Money Laundering (TBML)
Introduction
& Overview
According to the Indian
Regulators from 2009 to
2013, more than 1500 cases
of money laundering have
been reported, out of which
65 per cent cases are of trade
based money laundering
Key Focus
Areas
Review transaction
documents for red flags
Mechanisms for reporting
suspicious transactions
TBML is a growing trend in the financial and international trade industries, with characteristics often
including misrepresentation of price, quantity or quality of imports and exports, specifically for cross borders
transactions. It is one of the most common and expansive areas of money laundering activity, while also one
of its least understood components
An article published in BSA News Now on September 09, 2016 referred that financial institutions may become
implicated in trade based schemes when they settle, facilitate, or finance international trade transactions
“Cash is not a prerequisite under TBML methodologies”
The scope of due diligence should be identifying and monitoring transactions outside the ordinary course of
business and detecting the involvement of all transaction parties and beneficiaries
Screening & extensive Appropriate tools &
Ongoing training
background check technology
Recordkeeping and Designation of an AML Independent testing of the
retention compliance officer program
Trade Based Money Laundering (TBML)
• Review & Escalation
• Business Level Risk • Intermediaries/Third
Procedures
Challenges Assessment Parties Risk
Assessment • Reports &
• Customer Level Risk
Documentation
Assessment • Management Oversight
• Roles &
• Coverage • Red Flags
Responsibilities

Red Flags
Some of the red flag checks of potential Unrelated third Unusual
Misclassified Carousel Inconsistent Double
TBML activity which banks can potentially party shipping packaging invoicing
commodity transactions
look for introduction in their pre & post payments routes
transaction screening

Common
Bank
Methods Import/Export & Pre - Shipment Loans
Guarantee

Terrorist organizations engage in a variety of criminal

activities, ranging in scale and sophistication from Structured Trade Financing Project Financing
low-level crime to serious organized crime. They use
a legitimate trade to disguise their criminal proceeds Line of Credit & Letters Financing under open
from their unscrupulous sources of Credit account transactions
Trade Based Money Laundering (TBML)
According to Regulators, Indian Revenue officials have sought strong penal measures, streamlining of multiple export
TBML Cases incentives schemes, special fast track economic offence courts, an integrated approach towards TBML, and
international cooperation
There is no “one size fits all” approach

Former EXIM Bank Officials EXIM Bank defrauded of USD 11 Bank Granted Loan without any Lebanese Canadian Bank into
Sentenced | Tanzania million | United States Collateral | Vietnam Money Laundering Network |
Lebanon

In May 2016, former officials of Exim
Bank of Tanzania were sentenced for
authorizing the withdrawal of money
from a bank account, knowing that the
money is the proceeds of a predicate
offence of theft. According to the media
articles, various tour operators
deposited money into the account as
payments for several tourist services.
The officials also allegedly diverted the
money into various individuals’ bank
accounts.
In March 2016, Guillermo A. Sanchez-
Badia pleaded guilty to participating in a
scheme to defraud two commercial
lenders and the Export-Import Bank of
the United States (EXIM) out of more
than USD 11 million. He, along with his
co-conspirators, created false invoices
and shipping documents for sales of
merchandise to obtain a loan
guaranteed by the EXIM and further
used the loan amount to pay-off for the
invoices that were earlier sold to
commercial lenders
In May 2015, two executives of Vietnam
Export Import Commercial Joint Stock
Bank were arrested for allegedly
approving a loan worth US$ 6.9 million
to the Vietnam-based Gia Phat Thanh
Limited Company without any collateral.
According to the police, in 2012, one of
the executives signed a financing
contract to provide credit to the
company. Later, the company defaulted
on the loan
In February 2011, Beirut-based
Lebanese Canadian Bank was accused
by the Barack Obama Administration, of
laundering money on behalf of an
international drug ring which has ties to
Hezbollah. The sales revenues of used
cars and other consumer goods were
mixed with drugs proceeds to distinguish
the proceeds from its origin and then
funneled the proceeds to Lebanon
through Hezbollah-controlled money
laundering channels.
 CONTACT FOLLOW
www.amlmaps.com/contribute Sarabjeet Singh www.amlmaps.com
Partner
amlmaps@bmradvisors.com +91 124 669 5044 https://twitter.com/amlmaps
sarabjeet.singh@bmradvisors.com
We invite the AML & FCC community to
contribute new cases or suggest https://www.facebook.com/amlmaps.bmradvisors/
Abhishek Bali
modifications to existing money
Senior Vice President
laundering records.
+91 124 669 5033
You may send these to our team, along abhishek.bali@bmradvisors.com
with the relevant source (media,
regulatory, government etc.), Once
updated, we will send you a confirmation
by email.

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