Trade-based money laundering (TBML) has emerged another systematic way of cleaning dirty money through the process of concealing the proceeds of trade-related earning through illegal trade transactions. It can also involve abuse of the financial system through fraudulent transactions such as wire transfer. The basic styles of TBML include; over and under-invoicing of goods and services, multiple invoicing of goods and services, over and under shipments of goods and services and lastly falsely described goods and services.
A complex TBML technique is revealed in the eighth-grade chain trade involving how the Columbian drug cartel initiated the TBML through smuggling of illegal drugs into the US, where the money realised is being sold to peso broker in Columbia who later paid the drug cartel with pesos from his Columbian bank account, the chain later ends with the purchase of goods such as personal computers, consumer electronics and household appliances from the US by the Columbian importers who later sold the goods to pay the peso broker. Bangladesh is mulling on Pre-shipment Inspection (PSI) for export-import business to check TBML as it has been observed that the country has been paying in the currency for fictitious imports. As TBML may arise as a result of inadequate infrastructure of the bank, inaccurate assessment of the customer before taking him on board, poor identification and handling of TBML alert while doing trade, banks have been advised to be serious in TBML risk assessment and mitigation at enterprise level and also to develop rigid database of theirs and interlink it with the entire process of trade.
