Bill of Exchange

• Criminals attach overstated or fictitious invoice details to bills of exchange, obligating payment for goods or services that do not match the actual shipment.
• Acceptance of these inflated bills by financial intermediaries facilitates layering, as laundered funds appear to be part of legitimate trade settlements.

Criminals issue multiple bills of exchange referencing the same shipment or service. Each bill obligates a payer to settle amounts that, in reality, have already been financed or paid elsewhere. This replication allows them to draw funding from several banks, obscuring the original transaction and accumulating multiple streams of illicit revenue.

• In documentary collection schemes, a bill of exchange is drawn for goods purportedly in transit, though they do not actually exist.
• Participating banks release funds upon receiving these documents, unaware that the shipment is fabricated.
• Without robust verification of the underlying cargo, the bill of exchange payment seamlessly integrates illicit proceeds into seemingly legitimate trade flows.

• Criminals fabricate or inflate bills of exchange, backed by falsified invoices and shipping documents, to deceive banks into granting credit or early payment under fictitious trade deals.
• Once the financing or discount is approved, they subsequently repay the bill of exchange with illicit proceeds disguised as legitimate trade settlements, effectively integrating tainted funds into the financial system.
• The paper-intensive, cross-border nature of bill of exchange transactions allows criminals to layer illicit funds through shell companies, complex webs of front entities, and repeated documentary transfers, making it difficult for investigators to trace the transactions’ true origin or purpose.

• Under documentary collection manipulations, criminals present a Bill of Exchange in conjunction with fraudulent or misleading shipping documents.
• The bank releases funds based on these documents without fully verifying the actual shipment or the authenticity of cargo details.
• This reliance on paperwork gives criminals a direct avenue to obscure the true nature of the transaction and integrate illicit proceeds into legitimate trade flows.

• Overstated bills of exchange legitimize payments that exceed the actual value of goods, enabling criminals to embed illicit funds within trade transactions.
• The gap between the billed amount and the real shipment value represents concealed illicit proceeds.
• By falsifying or omitting supporting documents, launderers obscure the true nature of shipments, complicating due diligence efforts.

• Forgers modify payment amounts, beneficiary details, or due dates, circulating a falsified financial obligation.
• Since bills of exchange are accepted as valid trade liabilities, these alterations legitimize otherwise illicit funds disguised as proceeds from normal business transactions.