Trade-Based Money Laundering: The Paper Trail

Marc-Alain Galeazzi spoke to Global Trade Review about trade-based money laundering, and how the manual financing of trade documentation creates challenges for compliance staff at financial institutions and exposes banks to fraud.

"The way a bank's transaction monitoring program often works is to detect deviations from the past pattern of a client's activity," Marc-Alain said. "But if you have a person reviewing transactions, and every document is very different, it is harder to figure out where the relevant information is and where the patterns are."

Documents are not necessarily standardized, with different companies across different markets likely to take contrasting approaches to layouts and information included. At the same time, each bank has its own policies and procedures for handling those documents.

"That makes it difficult for somebody to review these transactions and understand whether everything is consistent with what they would expect," Marc-Alain added.

Read the full article.