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Trade-based money laundering: not just a bank’s burden

Americas / 15-05-17 / by
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US regulators are clamping down on trade-based money laundering, but they should look further than banks to combat the practice. Melodie Michel explains why.

Financial crime was at the forefront of the agenda at the 2017 annual conference of the Bankers Association for Finance and Trade (BAFT): on top of a number of banks’ compliance officers and compliance technology providers, speakers included representatives of the Federal Bureau of Investigation (FBI) and US Drug Enforcement Administration (DEA). These specialists helped the audience understand what trade-based money laundering (TBML) and terrorist financing look like on the ground, and how authorities tackle these cases.

“It’s far more complex than any other type of financial investigation and it requires a lot more co-operation across agencies and across national jurisdictions,” Mark Giuffre, assistant special agent in charge at the DEA, told GTR about TBML on the sidelines of the conference.

The illegal activity, which has received an increasing amount of attention from the media and lawmakers in the past couple of years, uses international trade to disguise and transfer the fruits of illegal activity. Trade misinvoicing (purposely over or undervaluing goods being sent on trade documentation), for example, helps fund up to US$2.2tn a year, according to a March 2017 study by Global Financial Integrity (GBI).

Banks are a crucial link in the physical and financial supply chain that handles illicit trade – but they are only one component. Exporters, importers, freight forwarders, shippers, ports and customs authorities are all interlinked parts of this ecosystem, all contributing to trade in one way or another. Why, then, does it seem like regulators are placing the burden of combatting TBML solely on banks?

According to Ross Delston, independent attorney and expert witness, it has to do with the know your customer (KYC) and your customer’s customer “dilemma” within banks. “No question: regulators, at least in the US, are increasingly focused, and I would say paranoid about this issue,” he explains. “There are many reasons for that, particularly when you look at the banks. One is that in the best of circumstances, the bank typically only knows one party to the transaction, for example if it issues an LC, they know their customer but they don’t know their customer’s customer. And there are a lot of transactions, for example discounting bills or drafts issued under other LCs where the bank doesn’t know either party. That’s a big dilemma for banks and therefore, for regulators.”

For his part, Stephen Alsace, senior director of sanctions, global AML group at Canadian bank CIBC, believes banks are “potentially unfairly burdened” with the responsibility of detecting and preventing TBML alone. “I guess it’s convenient for the banks to be burdened with it because we’re doing it with sanctions screening and other areas. But why isn’t it the importer/exporter or the shipping company that has to file suspicious transaction reports?” he asks.

Lack of information

The argument that banks and associations like BAFT are trying to make with regulators is that they only have the ability to detect illicit activity on a very small proportion of trade, as just 20% of all trade is documentary-based. “There’s a difference between trade finance and TBML. They often get confused and we think that’s a very important issue because trade bankers can only do so much to combat financial crime and money laundering issues,” explains Stacey Facter, senior vice-president of trade products at BAFT.

“They’re a good place to start but they only see a limited subset of activity, and the activity they see is what comes through from a documentary trade basis. With the 80% of open account trade, it’s almost impossible for a trade finance banker to see what’s going on, because they don’t have all the documents to show what the issues are and look at the red flags” she adds.

Even when they do have access to documents, bankers don’t necessarily have all the information they need to know that illegally-acquired money is being transferred. A roundtable discussion held by compliance service provider Pelican during the conference revealed that bankers feel like they don’t know enough about the products traded to determine how they should be priced. A suit, for example, can cost anywhere between US$300 and US$10,000, and trade documentation doesn’t include which kind of suit is being exported, making it difficult for banks to contest pricing.

“One of the issues is that not all of the information needed to make an assessment is submitted by the parties. For example, it isn’t enough to know that shrimp is being exported: you have 12 grades of shrimp. You have to know the specific grade and the amount. Often, all of that information is not available, not just to the bank but in the electronic system itself,” says Delston.

This has led some banks to practically exit certain sectors, such as used car trade, where accurate pricing is impossible to determine. “When we onboard clients, we’ll ask the name of their company and the type of business they’re engaged in, and they may provide vague answers like import/exports or they may even say things like furniture to begin with. In one of the cases we had, the client said that [they were in the furniture business] back in 2016, and then we started seeing in the bills or payment settlements, which were then indicative, that they were dealing with used cars or attending auto auctions. When we do find that we shut them down because it’s very high-risk and usually associated with money laundering,” Alsace says.

Another issue is that banks don’t have full access to the Customs and Border Protection (CBP) data used in TBML investigations. Giuffre tells GTR that the speed at which information is shared between federal agencies has increased tremendously over recent years, but that the most important piece of the puzzle is CBP information.

“I cannot imagine, for example, being on the bank trade finance side without having access to the detailed records that, for example, CBP customers and border patrol has on the commerce going across borders. We’re in the department of justice, so with trade-based money laundering investigations we find ways to work closely with CBP to have access to that information instantaneously, which is critical,” he says.

This problem seems easy enough to fix: regulators could simply require the disclosure of more specific information on trade documentation, and give banks expanded access to CBP data. But according to Delston, this would involve customs departments ramping up their requirements, “which they don’t like to do”. It would also involve increased inspections of the quantity and quality of goods being shipped, not only to help detect misinvoicing, but also for safety reasons. A case in point, the misreporting of container weight is suspected to have participated in the sinking of the container ship MOL Comfort after the vessel broke in half in bad weather in 2013 off the coast of Yemen, and shipping experts believe the practice to be a widespread industry issue.

Cross-sector collaboration

Some countries are more advanced than the US in involving all trade counterparties in the fight against TBML: the UK’s Joint Money Laundering Intelligence Taskforce (JMLIT), for example, includes the government, the British Bankers Association (BBA), the National Crime Agency (NCA) and more than 20 UK and international banks, with the aim of improving intelligence sharing in the fight against money laundering.

Between May and July 2016, the JMLIT contributed to the following operational outcomes: 37 arrests of individuals suspected of money laundering, the instigation of 186 bank-led investigations into customers suspected of money laundering, the identification of 137 suspicious accounts, the heightened monitoring by banks of 165 accounts, the closure of 114 bank accounts suspected of being used for the purposes of laundering criminal funds, and the restraint of £145,000 of suspected criminal funds. The taskforce is also developing two alerts on money laundering methodologies that are currently being used by criminals to launder their criminal proceeds through UK banks.

The NCA is now working with counterparts around the world to help the development of similar initiatives. But in the US progress is likely to be slow, not least because of stringent privacy laws blocking information sharing.

Facter points out: “One of the major stumbling blocks for identifying money laundering issues is the inability for us to share information across borders, even within our own financial institutions because of confidentiality and privacy issues. This keeps us from talking about the typologies, the criminal activities that have been identified from one jurisdiction to another. The industry is working very hard to let the regulators, whether it’s the Financial Action Task Force (FATF) or the Basel Committee, know about these issues so that there could potentially be something done about it.”

One way this could be improved is through industry associations, which are trying to come up with ideas on how to share information without having to breach privacy or as Facter calls it, “watering down the information to a point that it can be shared”.

Some hope the awaited application of blockchain technology in trade finance could also provide more transparency and collaboration in the sector. But in the meantime, there are things banks can do now to improve the detection of TBML, on their side at least.

“My suggestion is to incorporate the red flags into their daily work, in a way that’s not just waiting for an escalation but looking for suspicious transactions, and also to ramp up training, because often it’s the operations team, the back office and trade finance people who are viewing documents and Swift messages, and not the compliance people who see the transactions. Often the compliance people won’t understand the underlying trade transaction, so it’s really up to the operations people to take on the major responsibility,” advises Delston.

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Privacy Policy

Our privacy commitments

This Privacy Policy outlines the information we may collect about you in relation to your use of our websites, events, related publications and services (“personal data”) and how we may use that personal data. It also outlines the methods by which we and our service providers may (subject to necessary consents) monitor your online behaviour to deliver customised advertisements, marketing materials and other tailored services. This Privacy Policy also tells you how you can verify the accuracy of your personal data and how you can request that we delete or update it.

This Privacy Policy applies to all websites operated by Exporta Publishing & Events Ltd (as indicated on the relevant website).

This privacy statement does not cover the activities of third parties, and you should consult those third-party sites’ privacy policies for information on how your data is used by them.

Any questions regarding this Policy and our privacy practices should be sent by e-mail to or by writing to Data Protection Officer at, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, United Kingdom. Alternatively, you can telephone our London headquarters at +44 (0) 20 8673 9666.

Who are we?

Established in 2002 and with offices in London and Singapore, Exporta Publishing & Events Ltd is the world’s leading trade and trade finance media company, offering information, news, events and services for companies and individuals involved in global trade.

Our principal business activities are:

  • Business-to-Business financial publishing. We provide a range of products and services focused on international commodities, export, supply chain and trade finance markets including magazines, newsletters, electronic information and data
  • Organisers of seminars, conferences, training courses and exhibitions for the finance industry

Exporta Publishing & Events Ltd is a company registered in the United Kingdom with company number 4407327 | VAT Registration: 799 1585 59

Data Protection Policy

This Data Protection Policy explains when and why we collect personal information about people who visit our website, how we use it, the conditions under which we may disclose it to others and how we keep it secure.

Why do we collect information from you?

Our primary goal in collecting personal data from you is to give you an enjoyable customised experience whilst allowing us to provide services and features that will meet your needs.
We collect certain personal data from you, which you give to us when using our Site and/or registering or subscribing for our products and services. However, we also give you the option to access our Sites’ home pages without subscribing or registering or disclosing your personal data.

We also collect certain personal data from other group companies to whom you have given information through their websites (including, by way of example, Exporta Publishing & Events Ltd and subsidiaries, in accordance with the purposes listed below). Should we discover that any such personal data has been delivered to any of the Sites, we will remove that information as soon as possible.

Why this policy exists

This Data Protection Policy ensures Exporta Publishing & Events Ltd:

  • Complies with data protection law and follow good practice
  • Protects the rights of staff, customers and partners
  • Is open about how it stores and processes individuals’ data
  • pretexts itself from the risk of a data breach

We may change this Policy from time to time so please check this page occasionally to ensure that you’re happy with any changes. By using our website, you’re agreeing to be bound by this Policy.

Data protection law

The Data Protection Act 1998 described how organisations – including Exporta Publishing & Events Ltd – must collect, handle and store personal information. These rules apply regardless of whether data is stored electronically, on paper or on other materials. To comply with the law, personal information collected must be stored safely, not disclosed unlawfully and used fairly.

The Data Protection Act is underpinned by eight important principles. These say that personal data must:

  • Be processed fairly and lawfully
  • Be obtained only for specific, lawful purposes
  • Be adequate, relevant and not excessive
  • Be accurate and kept up to date
  • Not be held for any longer than necessary
  • Processed in accordance with the rights of data subjects
  • Be protected in appropriate ways
  • Not be transferred outside the European Economic Area (EEA), unless that country of territory also ensures an adequate level of protection

How do we collect information from you?

We obtain information about you when you use our website, for example, when you contact us about products and services, when you register for an event, register to receive eNewsletters, subscribe or register for a trial to our GTR magazine/website.

 Types of Personal Data Held and its Use

1.      Customer Services and Administration

On some Sites, Exporta Publishing & Events Ltd collects personal data such as your name, job title, department, company, e-mail, phone, work and/or home address, in order to register you for access to certain content, subscriptions and events. In addition, we may also store information including IP address and page analytics, including information regarding what pages are accessed, by whom and when.

This information is used to administer and deliver to you the products and/or services you have requested, to operate our Sites efficiently and improve our service to you, and to retain records of our business transactions and communications. By using the Sites and submitting personal information through the registration process you are agreeing that we may collect, hold, process and use your information (including personal information) for the purpose of providing you with the Site services and developing our business, which shall include (without limitation) the purposes described in the below paragraphs.

2.      Monitoring use of our Sites

Where, as part of our Site services, we enable you to post information or materials on our Site, we may access and monitor any information which you upload or input, including in any password-protected sections. Subject to any necessary consents, we also monitor and/or record the different Sites you visit and actions taken on those Sites, e.g. content viewed or searched for. If you are a registered user (e.g. a subscriber or taking a trial), when you log on, this places a cookie on your machine. This enables your access to content and services that

are not publicly available. Once you are logged on, the actions you take – for example, viewing an article – will be recorded (subject to any necessary consents). We may use technology or a service provider to do this for us. This information may be used for one or more of the following purposes:

  • to fulfil our obligations to you;
  • to improve the efficiency, quality and design of our Sites and services;
  • to see which articles, features and services are most read and used
  • to track compliance with our terms and conditions of use, e.g. to ensure that you are acting within the scope of your user licence;
  • for marketing purposes (subject to your rights to opt-in and opt-out of receiving certain marketing communications) – see paragraph 3 below;
  • for advertising purposes, although the information used for these purposes does not identify you personally. Please see paragraph 5 below for more details;
  • to protect or comply with our legal rights and obligations; and
  • to enable our journalists to contact and interact with you online in connection with any content you may post to our Sites.

Please see paragraph 5 below for more information on cookies and similar technologies and a link to a page where you can turn them on or off.

3.      Marketing

Some of your personal data collected under paragraphs 1 and 2 above may be used by us to contact you by e-mail, telephone and/or post for sending information or promotional material on our products and/or services and/or those of our other group companies.
We give you the opportunity to opt-out of receiving marketing communications. Further detail can be found on the applicable Site and in the footer of each marketing communication sent by us, our group companies or service providers. See also “Consents and opt-outs” section below.
We will not share your information with third parties for marketing purposes.

4.      Profiling

We may analyse your personal information to create a profile of your interests and preferences so that we can contact you with information relevant to you.

5.      Cookies and similar technologies

All our Sites use cookies and similar technical tools to collect information about your access to the Site and the services we provide.

What is a cookie?

When you enter some sites, your computer will be issued with a cookie. Cookies are text files that identify your computer to servers. Cookies in themselves do not identify the individual user, just the computer used.

Many sites do this whenever a user visits their site in order to track traffic flows, recording those areas of the site that have been visited by the computer in question, and for how long.

Users have the opportunity to set their computers to accept all cookies, to notify them when a cookie is issued, or not to receive cookies at any time. Selecting not to receive means that certain personalised services Exporta Publishing & Events Ltd offers cannot then be provided to that user.


Why do we use cookies?

  1. Log In – Where we provide log in mechanisms for site users a cookie is created at login and for the duration of the session. Each cookie contains a unique reference number only (no personal information) which is used to confirm you are authorised.
  2. Analytics – To allow us to keep track of traffic to our website we use cookies. The cookies simply tell us if you have previously visited our website so we can get more accurate figures for New vs Returning visitors.

Find and control your cookies

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We may use cookies to:

  • remember that you have used the Site before; this means we can identify the number of unique visitors we receive to different parts of the Site. This allows us to make sure we have enough capacity for the number of users that we get and make sure that the Site runs fast enough
  • remember your login session so you can move from one page to another within the Site;
  • store your preferences or your user name and password so that you do not need to input these details every time you visit the Site;
  • customise elements of the layout and/or content of the pages of Site for you;
  • record activity on our Sites so that we understand how you use our Sites enabling us to better tailor our content, services and marketing to your needs;
  • collect statistical information about how you use the Site so that we can improve the Site; and
  • gather information about the pages on the Site that you visit, and other information about other websites that you visit, so as to place you in a “market segment”. This information is only collected by reference to the IP address that you are using, but does include information about the county and city you are in, together with the name of your internet service provider.

Most web browsers automatically accept cookies but, if you prefer, you can change your browser to prevent that, or to notify you each time a cookie is set. You can also learn more about cookies in general by visiting which includes additional useful information on cookies and how to block cookies using different types of browser. Please note however, that by blocking, deleting or turning off cookies used on the Site you may not be able to take full advantage of the Site.

6.      E-mail tracking

E-mail tracking is a method for monitoring the e-mail delivery to those subscribers who have opted-in to receive marketing e-mails from GTR, including GTR Africa, GTR Asia, GTR Americas, GTR Europe, GTR Mena, GTR eNews, Third party e-mails and GTR Ventures.

Why do we track e-mails?

So that we can better understand our users’ needs, we track responses, subscription behaviour and engagement to our e-mails – for example, to see which links are the most popular in newsletters. They enable us to understand the consumers journey through metrics including open rate, click-through rate, bounces and unsubscribes. Any other purposes for which Exporta Publishing & Events Ltd wishes to use your personal data will be notified to you and your personal data will not be used for any such purpose without obtaining your prior consent.

How do you track GTR eNewsletters?

To do this, we use pixel GIFs, also known as “pixel tags” – these are small image files that are placed within the body of our e-mail messages. When that image is downloaded from our web servers, the e-mail is recorded as being opened. By using some form of digitally time-stamped record to reveal the exact time and date that an e-mail was received or opened, as well the IP address of the recipient.

7.      Consents and opt-outs

You can give your consent to opt-out of all or any particular uses of your data as indicated above by:

  • Indicating at the point on the relevant Site where personal data is collected
  • Informing us by e-mail, post or phone
  • Updating your preferences on the applicable Site or eNewsletter (unsubscribe and preference options are available in the footer of each eNewsletter)

To turn cookies and similar technologies on and off, see the information in paragraph 5 above. Any questions regarding consents and opt-outs should be sent by e-mail to or by writing to Data Protection Officer at, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, United Kingdom. Alternatively, you can telephone our London headquarters at +44 (0) 20 8673 9666.

8.      Disclosures

Information collected at one Site may be shared between Exporta Publishing & Events Ltd and other group companies for the purposes listed above.

We may transfer, sell or assign any of the information described in this policy to third parties as a result of a sale, merger, consolidation, change of control, transfer of assets or reorganisation of our business.

9.      Public forums, message boards and blogs

Some of our Sites may have a message board, blogs or other facilities for user generated content available and users can participate in these facilities. Any information that is disclosed in these areas becomes public information and you should always be careful when deciding to disclose your personal information.

10.  Data outside the EEA

Services on the Internet are accessible globally so collection and transmission of personal data is not always limited to one country. Exporta Publishing & Events Ltd may transfer your personal data, for the above-listed purposes to other third parties, which may be located outside the European Economic Area and/or with a different level of personal data protection. However, when conducting transfers, we take all necessary steps to ensure that your data is treated reasonably, securely and in accordance with this Privacy Statement.

Who has access to your information?

Confidentiality and Security of Your Personal Data

We are committed to keeping the data you provide us secure and will take reasonable precautions to protect your personal data from loss, misuse or alteration.

However, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our Site; any transmission is at your own risk. Once we have received your information, we will use strict procedures and security features described above to try to prevent unauthorised access.

We have implemented information security policies, rules and technical measures to protect the personal data that we have under our control from:

  • unauthorised access
  • improper use or disclosure
  • unauthorised modification
  • unlawful destruction or accidental loss

All our employees, contractors and data processors (i.e. those who process your personal data on our behalf, for the purposes listed above), who have access to, and are associated with the processing of your personal data, are obliged to keep the information confidential and not use it for any other purpose than to carry out the services they are performing for us.


Everyone who works for or with Exporta Publishing & Events Ltd has some responsibility for ensuring data is collected, stored and handled appropriately. Each team handling personal data must ensure that it is handled and processed in line with this policy and data protection principles. However, the following people have key areas of responsibility. The board of directors is ultimately responsible for ensuring that Exporta Publishing & Events Ltd meets its legal obligations.

Name of Data Controller

The Data Controller is Exporta Publishing & Events Ltd. Exporta Publishing & Events Ltd is subject to the UK Data Protection Act 1998 and is registered in the UK with the Information Commissioner`s Office.

How to access, update and erase your personal information

If you wish to know whether we are keeping personal data about you, or if you have an enquiry about our privacy policy or your personal data held by us, in relation to any of the Sites, you can contact the Data Protection Officer via:

  • By writing to this address: Data Protection Officer, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, UK
  • Telephone: +44 (0) 20 8673 9666
  • E-mail:

Upon request, we will provide you with a readable copy of the personal data which we keep about you. We may require proof of your identity and may charge a small fee (not exceeding the statutory maximum fee that can be charged) to cover administration and postage.

Exporta Publishing & Events Ltd allows you to challenge the data that we hold about you and, where appropriate in accordance with applicable laws, you may have your personal information:

  • erased
  • rectified or amended
  • completed

Disclosing data for other reasons

In certain circumstances, the Data Protection Act allows personal data to be disclosed to law enforcement agencies without the consent of the data subject. Under these circumstances, Exporta Publishing & Events Ltd, will disclose requested data. However, the Data Controller will ensure the request is legitimate, seeking assistance from the board and from the company’s legal advisors where necessary.

Changes to this Privacy Statement

We will occasionally update this Privacy Statement to reflect new legislation or industry practice, group company changes and customer feedback. We encourage you to review this Privacy Statement periodically to be informed of how we are protecting your personal data.

Providing information

Exporta Publishing & Events Ltd aims to ensure that individuals are aware that their data is being processed, and that they understand.

  • How the data is being used
  • How to exercise their rights

To this end, the company has a privacy statement, setting out how data relating to individuals is used by the company. This is available on request and available on the company’s website.

Review of this policy

We keep this Policy under regular review. This Privacy Statement was last updated in April 2018.