Reaching beyond banks: how to target trade-based money laundering and terrorist financing outside the financial sector

Ross S. Delston and Stephen C. Walls

Chapter 4 in Handbook of Research on Counterfeiting and Illicit Trade, 2017, pp 52-76 from Edward Elgar Publishing

Abstract: Anti-money laundering and combating the financing of terrorism (AML/CFT) measures have succeeded in restricting the two traditional avenues of money laundering, namely, the abuse of financial intermediaries and the physical movement of money across borders. Consequently, international criminal and terrorist organizations have turned to trade-based money laundering (TBML) to conceal and legitimize their funds, as this is a channel that remains relatively untouched by international AML/CFT efforts. This abuse of the global trade network has received increasing recognition from the Financial Action Task Force, the international standard-setter, as the next front in AML/CFT. Because TBML methods may be used not only to launder money, but also to finance international terrorism, facilitate weapons proliferation, and conceal and transport weapons of mass destruction (WMDs), this article proposes a far-reaching solution—that those in the international supply chain be required by law to adopt AML/CFT safeguards to protect their businesses, including filing suspicious activity reports, identifying their customers, and designating an AML/CFT compliance officer.

Keywords: Business and Management; Economics and Finance; Law - Academic (search for similar items in EconPapers)
Date: 2017
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