Trade Finance

• Criminals can falsify the declared price or quantity of goods in financed transactions, inflating invoices to legitimize illegal proceeds.
• Colluding import–export parties can present inconsistent shipping and invoice documents to obscure true transaction values.

• Criminals reuse or slightly amend the same invoice and supporting documentation to secure repeated credit or settlement across multiple trade finance arrangements.
• This tactic layers illicit funds behind legitimate-appearing trade deals, making detection more difficult for financial institutions and regulators.

• Malicious actors inflate invoice values for cross-border shipments, securing inflated payments under various trade finance instruments.
• The excess funds are labeled as legitimate trade settlements, obscuring the true nature of the transaction.

• Criminals can inflate or understate invoice values and quantities in trade finance applications, obscuring the true flow of illicit capital.
• Reliance on self-reported documentation across multiple jurisdictions provides opportunities to layer funds through repeated false invoicing or misrepresented shipments.

• Presentation of forged bills of lading or export documents to trigger payouts under letters of credit or documentary collections.
• Submission of counterfeit shipping or insurance records to mask the true nature and value of goods, complicating AML checks.

• Criminals leverage forged settlement documents to obtain financing for purported international trade, concealing the actual movement of illicit funds.
• Inflated or fictitious invoices enable launderers to extract funds from trade finance instruments while obscuring real financial flows.

• Criminals manipulate trade finance instruments, such as letters of credit or documentary collections, to disguise netting of cross-border obligations.
• Inflated or falsified invoices and shipping documents effectively hide the real value transfers for Hot Transfer arrangements.
• Robust trade-based AML controls are crucial for identifying and mitigating such misrepresentations.

Documentary credits, collection, and supply-chain-finance products underpin the inflated invoices and over/under-valued shipments used by import-export fronts to shift value internationally under a veneer of legitimate trade.

• Criminals can falsify or manipulate import/export invoices and other underlying documents, disguising the true nature or recipient of funds.
• By over- or under-invoicing goods, they legitimize large transactions under the pretense of genuine trade.
• Exploiting complex trade finance instruments (e.g., letters of credit) creates layers that obscure beneficial ownership and hamper AML efforts.

• Perpetrators repeatedly re-invoice or create phantom trade transactions, funneling funds back and forth among related entities.
• By improperly using letters of credit or other trade instruments, they generate circular flows that mask the origin of illicit proceeds.

• Offenders may submit fraudulent documentation (e.g., invoices, bills of lading) to financial institutions, misrepresenting criminal proceeds as payments for goods or services.
• By incorrectly labeling illicit transactions as import/export expenses, they circumvent scrutiny and disguise the true purpose of funds under legitimate trade activities.

• Criminals leverage trade finance instruments (e.g., invoices, letters of credit) in free trade zones to manipulate the declared value of goods and repeatedly re-export them, concealing the true origin of funds.
• These over- or under-invoiced transactions obscure payment trails and hinder AML detection.

• Criminals may over- or under-invoice shipments of valuable commodities, leveraging trade finance instruments to legitimize false valuations.
• By manipulating invoice amounts and related documentation, they obscure the true value of the smuggled goods and integrate illicit proceeds into the financial system.

• Criminals can obtain letters of credit or documentary collections under false pretenses to move precious metals or gemstones internationally, obscuring their true origin.
• By under- or over-invoicing the value of shipments, illicit funds are introduced into legitimate trade channels under the guise of standard import/export transactions.

• Criminals artificially inflate diamond shipment values and repeatedly re-export the same parcels to secure multiple rounds of trade financing, layering illicit proceeds under legitimate trade transactions.
• Falsified or exaggerated invoices lead financial institutions to extend credit or payment guarantees, effectively injecting illegal funds into the financial system.

• Criminals can falsify or inflate trade invoices related to environmental or natural resource products, allowing them to embed illicit proceeds within seemingly legitimate cross-border transactions.
• By exploiting letters of credit or documentary collections, they disguise the illicit origin of funds and layer them across multiple jurisdictions.

• Criminals submit forged or inaccurate shipping documents to financial institutions when seeking financing for purported imports or exports.
• Overvalued or nonexistent goods can be presented as valid collateral, enabling fraudulent access to funds under the guise of legitimate trade.

• Criminals forge or inflate shipping documents, invoice amounts, or bills of lading to secure trade finance for non-existent or grossly overvalued goods.
• They layer funds across multiple jurisdictions by claiming cross-border trade deals, making verification difficult for financial institutions and regulators.

• Criminals submit fictitious shipping records or invoices to obtain financing for goods purportedly in transit, although no actual shipment exists.
• By presenting falsified bills of lading, they justify large fund transfers or repeated draws on letters of credit, layering illicit funds under the guise of legitimate trade transactions.

• Fraudulent or unverified guarantees and related credit instruments within the trade finance framework disguise the source of funds.
• Rapid issuance of multiple trade finance facilities across jurisdictions confuses AML checks, allowing illicit funds to be layered and presented as legitimate trade transactions.

• Criminals can falsify or inflate trade transactions under legitimate trade finance facilities to justify large fund movements.
• By presenting fabricated or manipulated documentation, they obtain financing that appears legitimate and obscure illicit fund origins.

• Criminals present fictitious or inflated bills of exchange and related trade documents to obtain financing or early payment.
• They then repay these obligations with illicit funds disguised as legitimate trade settlements, integrating illegal proceeds into the financial system.

• Criminals exploit partial due diligence among co-lenders in syndicated trade loans, submitting fabricated or inflated shipping documents and invoices to secure higher financing amounts.
• By leveraging limited oversight across participating banks, they obscure beneficial ownership and layer illicit funds through multiple accounts and disbursements.

• Criminals create multiple sets of trade documents with inflated or falsified values, exploiting structured finance processes in reciprocal transactions.
• They may cycle identical goods or partially ship consignments repeatedly, obscuring the true origin of funds across various jurisdictions.

• Criminals exploit trade finance instruments to inflate or understate invoice values, masking true goods or service costs in foreign exchange transactions.
• Advanced or partial payment structures, often arranged through documentary channels, fragment the payment flow and obscure the ultimate source of funds.
• False or misleading trade documentation further complicates due diligence, facilitating layering across multiple jurisdictions.

• Criminals leverage trade finance instruments to justify over- or under-invoicing, artificially shifting or obscuring illicit funds.
• Misrepresented shipping documents and inflated administrative costs enable additional payments or concealment of profits under the guise of legitimate trade transactions.

• Over- or under-invoicing of oil and fuel shipments can be structured through trade finance instruments (e.g., letters of credit), disguising illicit proceeds as legitimate trade payments.
• Multiple cross-border transactions exploit inconsistent AML controls, allowing profits from falsified oil invoices to flow between jurisdictions undetected.

• Criminals exploit trade finance instruments to over- or under-invoice commodities, obscuring the true value of goods.
• They use free trade zones and complex routing to complicate audits, hiding the origin and ownership of illicit funds.

• Criminals misuse trade finance by manipulating financial instruments (e.g., documentary credits) with inflated or nonexistent shipment values.
• They forge or alter supporting documents to layer illicit proceeds under legitimate trade transactions, hiding true beneficiaries and complicating AML checks.

• Criminals embed manipulated inter-company prices in standard trade finance instruments (e.g., letters of credit) to move illicit funds cross-border.
• Inflated or under-declared invoice values appear routine but systematically shift proceeds among related entities.

• Over- and under-invoicing can embed illicit flows linked to sanctioned entities into otherwise legitimate trade.
• Complex trade-based transactions reduce transparency, allowing sanctioned parties to move funds undetected.

• Criminals inflate or understate the value of cross-border shipments to offset or camouflage the intrusion of drug money into legitimate trade transactions.
• Complex instruments like letters of credit and trade loans are exploited to shift proceeds across jurisdictions, making suspicious activity more difficult to detect.

• Instruments like supply chain financing or factoring can be misused through falsified invoices, disguising the true origin and value of illicit goods.
• Funds are layered by cycling through multiple trade finance solutions, masking any link to unauthorized commodity transactions.

• Criminals use trade finance instruments to disguise illicit arms transactions as legitimate imports or exports.
• Over-invoicing, under-invoicing, and false beneficiary details are employed to cloak the actual nature of goods and obscure the flow of funds.

• Criminals obtain letters of credit or other trade-financing instruments based on fabricated invoices and shipping records.
• Repeatedly rotating the same goods (or nonexistent goods) through multiple transactions allows them to collect funding or rebates multiple times (e.g., carousel fraud).

• Criminals exploit instruments such as letters of credit and documentary collections to legitimize phantom import and export activity, masking repeated circulation of identical goods or services.
• Assists in presenting cross-border transactions as genuine, supporting fraudulent VAT rebate claims.

• Illicit operations involving timber, wildlife products, or other natural resources exploit trade finance instruments to secure payments or credit.
• Falsified documentation (e.g., invoices, shipping records) conceals the true source and nature of the goods, enabling funds derived from environmental crimes to appear legitimate.

• Falsified or inflated invoices can misrepresent timber shipment values, facilitating cross-border movement of illicit proceeds.
• Instruments like letters of credit and guarantees legitimize exports while concealing the unlawful origin of funds derived from illegal wood harvesting.

• Criminals manipulate trade finance instruments (e.g., letters of credit) to legitimize international payments for illegally sourced wildlife.
• Over- or under-invoicing disguises the true nature of shipments, undermining financial institutions’ ability to detect criminal proceeds.

• Overstated export values and misrepresented trade documentation allow perpetrators to claim unjustified export-related tax rebates.
• Loans, letters of credit, or other financing instruments may mask inflated invoices supporting phony rebate applications.

• Inflated invoices are submitted within trade finance applications, allowing criminals to secure excessive funding or credit lines beyond the genuine cost of goods.
• The mismatch between actual goods and declared value remains hidden under standard trade finance documentation, enabling overvalued exports to appear legitimate.