International trade‐based money laundering: the Malaysian perspective

Haemala Thanasegaran and Bala Shanmugam

Journal of Money Laundering Control, 2007, vol. 10, issue 4, 429-437

Abstract: Purpose - The purpose of this paper is to highlight the dangers posed by money‐laundering activities undertaken by criminals through the international trade mechanism, from the Malaysian perspective. Design/methodology/approach - This is to be achieved by providing a description of the money‐laundering process in general and, more specifically, the international trade‐based money‐laundering mechanism. This is followed by an account of the development of international trade in Malaysia and related control mechanisms undertaken, so as to highlight the scope available to curb money laundering via the international trade mechanism in Malaysia. Findings - The research showed two things: first, that the common techniques of laundering money via international trade involve over‐ and under‐invoicing of goods, multiple invoicing of goods, over‐ and under‐shipment of goods, falsely described goods and complex trade approaches; and second, the unfortunate state of affairs pertaining to the lack of data/information available on the existence and workings of such activity in the Malaysian context (which has in part hampered the aims of this paper). Practical implications - Nevertheless, this paper has the practical implication of being something of a wake‐up call to the Malaysian policymakers (and the policymakers of developing countries), in that awareness of the impending challenges brought about by money laundering to international trade is crucial in tackling the menace. Originality/value - This paper's call for increasing awareness and identification of international trade‐based money laundering and improving international cooperation and interaction makes it a useful read for policymakers, academics and students alike.

Keywords: Money laundering; International trade; Terrorism; Malaysia; Imports; Exports (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:13685200710830916

DOI: 10.1108/13685200710830916

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