Shipping Document Manipulation

Fraudulent transport documents obscure the true nature and value of transactions, concealing illicit funds and ownership.

Criminals forge or manipulate shipping documentation to add complexity to trade-based transactions, creating additional layers that obscure the true origin of illicit funds behind seemingly legitimate trade flows.

Criminals exploit the reliance on shipping documents within trade finance—bills of lading, invoices, and manifests—to secure financing or clear customs for nonexistent or misrepresented goods. The inherent complexity and volume of trade finance transactions often lead to limited scrutiny, allowing forged or inflated documentation to pass undetected. As a result, illicit operators can layer funds under the guise of legitimate trade transactions, capitalizing on the vulnerability to document-based fraud.

Provides real-time and historical commodity pricing information, enabling direct comparison between declared values in shipping documents and actual market rates. This supports AML detection by uncovering over-invoicing and under-invoicing schemes often used to obscure illicit fund movements in trade transactions.

Provides official records needed to verify cross-border shipments (e.g., bills of lading, manifests, shipping logs, invoices). This data directly supports AML detection by:

• Tracking version histories of shipping documents to identify suspicious or excessive amendments that may indicate document tampering.
• Checking for insufficient or imprecise product details, missing or contradictory invoice information, and repeated or duplicated shipping document identifiers.
• Verifying whether listed carriers, routes, and packaging methods align with the declared goods.
• Ensuring essential supporting documentation (e.g., purchase orders, contracts) is present.
• Detecting inconsistencies between declared cargo and a party’s typical business scope.

These checks help expose forged or manipulated shipping records used to disguise illicit funds.

Apply heightened scrutiny to customers or transactions exhibiting anomalies in trade documentation, such as multiple or conflicting versions of bills of lading, unexplained invoice adjustments, or shipments linked to high-risk jurisdictions. Require additional documentation, including purchase orders, cargo inspection reports, and certifications, and verify the authenticity of freight forwarders and beneficiaries linked to these trades. By demanding deeper verification, institutions limit the opportunity for forged shipping records to justify illicit fund movements.

Conduct thorough due diligence on freight forwarders, shipping agents, and related intermediaries to ensure they maintain robust protocols for verifying goods and documentation. Assess their track record, regulatory compliance, and operational transparency to confirm they do not enable or overlook manipulated shipping records. By collaborating only with trusted and compliant service partners, institutions reduce the risk of exposure to forged or fraudulent documentation.

Cross-check declared cargo and shipping details against publicly available shipping schedules, vessel or flight tracking data, and customs records. Confirm the existence, routes, and timing of shipments to detect fabricated or 'ghost' cargo. Validate whether the listed shipping companies and freight forwarders legitimately operate in the claimed trade routes and handle the stated goods. This independent validation uncovers discrepancies indicating falsified shipping documentation.

Implement systematic checks of shipping documents (e.g., bills of lading, manifests, invoices) by cross-referencing details such as product type, quantity, and routing with recognized freight data, customs records, or industry benchmarks. Identify inconsistencies like repeated use of identical documents for different shipments, illogical shipping routes, or mismatches in declared versus actual packaging. By pinpointing anomalies early, financial institutions can detect forged or manipulated paperwork tied to fraudulent trade flows.

• Criminals submit forged shipping documents (e.g., falsified bills of lading and invoices) to meet the documentary requirements of a letter of credit.
• Once these fraudulent papers appear to satisfy the bank's conditions, funds are released, facilitating the layering of illicit proceeds under the pretense of legitimate trade transactions.
• The reliance on documentary checks makes letters of credit vulnerable to manipulated shipping records that are challenging to validate across complex supply chains.

• Criminals generate inflated or fictitious invoices that accompany manipulated shipping documents, claiming payment for goods that are misstated or do not exist.
• This enables launderers to layer illicit proceeds under the guise of legitimate receivables in cross-border trade, as banks may release funds based on these forged invoices.
• The false invoicing conceals the actual nature and value of shipments, hampering financial institutions' ability to identify anomalies in trade transactions.

• By presenting counterfeit or altered shipping documents, criminals trigger the release of funds from the importer's bank.
• The reliance on documentary evidence—often unchecked in detail—allows misrepresented shipments to remain undetected.

• Illicit actors manipulate bills of lading and related papers to meet documentary requirements for payment, even when goods are fake or grossly overstated.
• The issuing bank may release funds upon reviewing these forged documents, unwittingly facilitating money laundering.

• Criminals may present falsified bills of lading or manifests to freight forwarders, masking the true nature, quantity, or existence of goods.
• Multiple or inconsistent versions of shipping documents can be submitted for the same cargo, making it harder to detect fraudulent shipments or ghost shipping schemes.

• Offenders can alter or fabricate trade documents (e.g., invoices, certificates of origin) to inflate shipment values or conceal nonexistent goods.
• Such manipulations facilitate the layering of illicit proceeds, as each falsified record creates an appearance of legitimate trade transactions.

• 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 slip forged shipping records into logistical workflows when service providers handle customs clearance and other formalities.
• Such tampered documentation obscures the authenticity and value of shipments, enabling fraudulent layering in complex global trade chains.

• Criminals misrepresent shipping documentation to claim extended or early payment terms for nonexistent or false shipments.
• Inflated or duplicated bills of lading can hide the actual nature or value of goods, securing unwarranted financing.

• Fraudsters create inflated or fictitious shipping invoices, supported by forged paperwork, to receive advances from financiers.
• This technique enables them to convert illicit proceeds quickly, claiming they stem from legitimate trade receivables.

Trade finance institutions provide letters of credit, supply chain financing, or documentary collection services reliant on shipping documentation. Criminals exploit these institutions by:

• Presenting falsified or inflated paperwork to trigger payment or credit for nonexistent shipments.
• Using multiple versions of documents to inflate values or legitimize ghost shipments, hampering straightforward verification.

This undermines the institution’s ability to detect suspicious transactions, channeling illicit proceeds under the guise of legitimate trade finance.

Import-export companies may be complicit or unwittingly involved by:

• Submitting manipulated shipping documents (e.g., inflated invoices) to financial institutions.
• Claiming legitimate trade operations while disguising or inflating the value and quantity of goods.

This tactic obscures the movement of illicit funds within cross-border transactions, complicating banks' verification processes.

Illicit operators carry out shipping document manipulation by:

• Presenting forged or altered bills of lading, manifests, or invoices to trade finance institutions and customs officials.
• Creating ghost shipments to justify illicit fund flows under seemingly genuine trade deals.

These practices deceive financial institutions into believing the transactions are legitimate, hindering the effective detection of money laundering activities.

Document forgers specialize in producing or altering shipping records, including invoices or bills of lading, to:

• Fabricate credible trade documentation that secures financing or customs clearance.
• Conceal the absence or misrepresentation of actual goods, enabling the layering of illicit proceeds.

Their work undermines financial institutions' reliance on official documents for due diligence, aiding criminals in creating a veneer of legitimate trade activity.

Trade intermediaries, including freight forwarders or customs brokers, handle logistics and critical documentation. They may be exploited to:

• File or transmit forged bills of lading, manifests, or certificates on behalf of criminal clients.
• Overlook or fail to verify mismatched data in repeated or circuitous shipping paperwork.

Their intermediary role can inadvertently shield the underlying fraud from financial institution scrutiny, as documentation often appears routine at face value.