Typologies of TBML means various methods used to launder money through trade transactions. The definitions and purposes of various methods are summarized as follows:
Trade-Based Money Laundering (TBML) involves various methods
to move illicit funds through trade transactions. Here are some common
typologies, along with their definitions and purposes from the perspectives of
both importers and exporters:
1. Over-Invoicing
Definition: The exporter submits an inflated invoice
to the importer, generating a payment that exceeds the value of the shipped
goods.
- Purpose
for Importer: To transfer additional value to the exporter, often to
move illicit funds out of the country.
- Purpose
for Exporter: To receive excess funds, which can be used to legitimize
illicit money1.
2. Under-Invoicing
Definition: The exporter submits a deflated invoice
to the importer, shipping goods with greater value than declared.
- Purpose
for Importer: To receive goods at a lower declared value, potentially
evading taxes and duties.
- Purpose
for Exporter: To transfer value to the importer, often to facilitate
the movement of illicit funds1.
3. Multiple Invoicing
Definition: The exporter issues multiple invoices for
the same shipment to justify multiple payments.
- Purpose
for Importer: To make multiple payments for the same goods, transferring
additional value to the exporter.
- Purpose
for Exporter: To receive multiple payments for the same shipment,
facilitating the laundering of illicit funds1.
4. Over/Under-Shipment of Goods
Definition: The exporter ships more or fewer goods
than agreed upon, misrepresenting the quantity in the shipping documents.
- Purpose
for Importer: To receive more goods than declared (under-shipment) or
to transfer additional value to the exporter (over-shipment).
- Purpose
for Exporter: To receive excess funds (over-shipment) or to transfer
value to the importer (under-shipment)1.
5. Misclassification of Goods
Definition: Incorrectly declaring the type or quality
of goods to evade detection or duties.
- Purpose
for Importer: To receive goods at a lower duty rate or to disguise the
true nature of the goods.
- Purpose
for Exporter: To facilitate the movement of illicit funds by
misrepresenting the goods1.
6. Phantom Shipments
Definition: Creating fictitious shipments with no
actual goods being moved.
- Purpose
for Importer: To justify payments for non-existent goods, transferring
value to the exporter.
- Purpose
for Exporter: To receive payments for non-existent goods, laundering
illicit funds1.
7. Misrepresentation of Quality
Definition: Goods shipped to importers are
misrepresented on official documentation as being of a higher quality.
- Purpose
for Importer: To justify higher payments for goods, transferring
additional value to the exporter.
- Purpose
for Exporter: To receive excess funds by misrepresenting the quality
of goods1.
These methods exploit the complexities of international
trade to move and legitimize illicit funds. By understanding these typologies,
businesses and regulators can better detect and prevent TBML activities.
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