Effects of trade misinvoicing on money laundering in developing economies

Bello Umar

Journal of Money Laundering Control, 2021, vol. 26, issue 1, 60-68

Abstract: Purpose - This study aims to define the concepts and determine the extent to which trade misinvoicing influences money laundering activities in developing countries. Design/methodology/approach - A qualitative research methodology was adopted using a descriptive synthesis of secondary data due to the heterogeneous nature of data sources (empirical evidence and content analysis). Findings - Analysis revealed that in recent times trade misinvoicing accounts for over 20% of international trade value between developing and developed countries, and trade misinvoicing has been identified as a trade-based money laundering mechanism. Research limitations/implications - Unavailability of homogenous data relating to trade misinvoicing among developing countries, different methods for measuring trade misinvoicing and inadequate high-quality research papers that led to the use of reports from reputable organisations. Originality/value - To the best of the author’s knowledge, this study is among the few research works to assess the effects of trade misinvoicing and how it influences money laundering activities in developing countries.

Keywords: Illicit financial flows; Trade misinvoicing; Money laundering; Developing nations; Export misinvoicing; Import misinvoicing (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-11-2021-0124

DOI: 10.1108/JMLC-11-2021-0124

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