A new paper released today by BAFT—ABA’s foreign transaction banking subsidiary—called for increased partnerships between public and private entities to help curb the use of trade transactions to move illicit funds through the financial system.
“Some have likened trade-based money laundering not to looking for a needle in a haystack, but rather, looking for the bad needle in a stack of needles,” said BAFT President and CEO Tod Burwell. “That’s why it is so important to get all stakeholders involved in international trade working together to thwart financial crime.”
A recent study by Global Financial Integrity estimates that trade-based money laundering to and from developing and emerging countries was between 14 and 24 percent of their total trade from 2005 to 2014, making it a more than trillion dollar problem. The BAFT paper provides an overview of various types of trade-based money laundering schemes and identifies possible solutions for addressing the problem, including increased collaboration in information sharing and in the application of technology and data analytics.