Financial institutions implementing a risk-based approach must roll out speci� c anti-money laundering and counter-terrorist financing training programs for their traditional trade � nance, international supply chain � nance, correspondent banking and global payments businesses.

Financial intelligence units, law enforcement and the national security establishment must offer current training in major financial crime risks and methods, including trade-based money laundering.

The Financial Crime Training series from ManchesterCF o� ers training program blocks that can be assembled by a � nancial institution or public-sector agency to create a successful training program con� guration.

The training program is sold on a subscription basis, including annual updates and additional languages beyond the core of English, French and Spanish. An annual global licence fee keeps costs simple to track.

FINANCIAL CRIME TRAININGTRADE-BASED MONEY LAUNDERING

1. Fundamentals 2. Misconceptions 3. Regulatory Environment 4. Risk Management 5. Variable Physical Goods 6. Free-Trade Zones 7. Variable Pricing of Goods 8. Black Market Peso Exchange 9. False Standby Letters of Credit 10. O� shore Financial Centres 11. Terrorist Resourcing 12. Supply Chain Finance 13. Correspondent Banking 14. Detection

1. Course manual (hardcopy and digital)2. Computer-based training3. Seminars/webinars5. Examination

Components

All � nancial institutions that have implemented trade-based money laundering training from ManchesterCF have reported that suspicious transaction reporting has risen as a direct result of the training program.

The training program version for � nancial intelligence units can include primers on the mechanics of traditional trade finance and supply chain finance products in international banking.

S e m i n a r s a n d w e b i n a r s f r o m e x p e r i e n ce d ManchesterCF professional instructors are available in English.

Regulators no longer accept mediocre training. Compromises are expensive in the long run and can damage reputations.

Chapter Headings

ManchesterCF provides � nancial crime risk management training programs, advisory services and project management to � nancial institutions, � nancial intelligence units and public-sector agencies around the globe.

ManchesterCFSuite 501125-720 King Street WestToronto, Ontario Canada M5V 3S5+1.416.388.6051www.manchestercf.cominfo@manchestercf.com@ManchesterCF

trade Based Money Laundering

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Course: Trade-Based Money Laundering Menu

TRADE-BASED MONEY LAUNDERING

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IntroDuction

Section A: Fundamentals; Misconceptions; Regulatory Environment

Section B: Risk Management; Variable Physical Goods; Free Trade Zones; Variable Pricing of Goods; Black Market Peso Exchange; False Standby Letters of Credit

Section C: Offshore Financial Centres; Terrorist Financing; Supply Chain Finance; Correspondent Banking; Detection

Knowledge Assessment

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Introduction - Start

Section A: Fundamentals; Misconceptions; Regulatory Environment

Trade Based Money LaunderingClick on the START button or the next button to begin.

Course: Trade-Based Money Laundering Introduction - Start Page 1 of 5

Course: Trade-Based Money Laundering Introduction - Learning Objectives Page 3 of 5

Introduction - Learning Objectives

!At the end of this course module you will be able to:

 

• Understand the fundamentals of trade-based money laundering

• Recognise patterns of trade-based money laundering

• Manage the risks associated with trade-based money laundering

Course: Trade-Based Money Laundering Section B - Variable Physical Goods Page 7 of 24

!Variable Volumes By varying the volume of goods in a shipment, an exporter can add or subtract value from the shipment by either increasing or decreasing the volume of goods relative to the volume of goods described in the transaction documentation.

If a money launderer wishes to transmit value overseas, they can increase the volume of goods in the shipment above the figure quoted on the documentation.  If the money launderer wishes to receive value from overseas, they can decrease the volume of actual goods in the shipment below the figure quoted on the documentation.

Use of variable volumes by a money launderer involves more risk than mislabelled goods, as either customs officials or international trade inspection firms can easily count the number of units in the shipment and compare the calculation to the volume listed in the international trade documentation.

5. Variable physical Goods

Example

Course: Trade-Based Money Laundering Section B - Variable Physical Goods Page 7 of 24

!Example – Variable Volumes Red Ltd. must transmit $100,000 worth of value to Blue Inc. and has decided to employ the trade-based money  laundering technique of variable volumes.

Red Ltd. prepares a shipment of footballs to Blue Inc.  The shipment documentation describes 100,000 footballs at $10 per ball.  As the actual number of footballs in the shipment is 110,000 the true value of the shipment is greater than what is listed in the documentation by $100,000.

!!!!!!!!!!!Customs officials in the Indigo Islands would be hard pressed to count all the footballs to ensure the number of footballs matches the shipment's documentation.

110,000 footballs

$100,000

5. Variable physical Goods

Course: Trade-Based Money Laundering Section C - Offshore Financial Centres Page 3 of 15

10. Offshore Financial Centres

International Business Corporations Many offshore financial havens sell international business corporations (IBCs) to overseas investors. The corporations are registered in the offshore financial haven under strict secrecy laws, as revealing the names of shareholders or even directors can be against the law.

The majority of offshore financial havens impose one important restriction on IBCs is that they are not permitted to conduct business within the domestic market of the offshore financial haven itself.

Although IBCs often have important uses in the legitimate economy, they are often abused by money launderers seeking secrecy in their financial dealings. Trade-based money laundering transactions become far more complex once one or more IBCs are involved as either importer, exporter or middle-man.

Example

Course: Trade-Based Money Laundering Section C - Offshore Financial Centres Page 3 of 15

10. Offshore Financial Centres

!Example – Use of an International Business Corporation In order to confuse investigators in Redistan, Red Ltd. needs to launder $1.3-million in dirty money through an offshore entity.

Red Ltd. acquires Blue Inc., an international business corporation licensed to conduct business outside of the Bismarck Islands, an offshore financial centre located in the Indian Ocean.  IBCs can be purchased "off the shelf" in the Bismarck Islands.

Red Ltd. receives a purchase order for $1.3-million worth of goods from Blue Inc., yet the shipment is destined for Yellow Co., a firm in Goldonia who wishes to purchase the goods legitimately.

Red Ltd. ships the goods to Yellow Co. in Goldonia and Blue Inc. receives payment from Yellow Co.  Blue Inc. then defaults on its payment to Red Ltd., who then books the transaction as a tax-deductible credit loss in its accounts.

Red Ltd., through its beneficial ownership, still controls the proceeds from the export transaction, but the proceeds from the sale now reside in the offshore financial centre of the Bismarck Islands, free from the prying eyes of investigators in Redistan.

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Continue

!Red Flags

• Product volumes in transaction documentation are inconsistent and contain a variety of errors.

• Method of shipping does not match the volumes mentioned in the documentation.

• Inspection certificates are from unknown firms or contain mistakes.

• The logic behind partial shipments is inconsistent and does not make good business sense.

!

Course: Trade-Based Money Laundering Section B - Variable Physical Goods Page 8 of 24

5. Variable physical Goods

For further information on this Financial Crime Training (Trade-Based Money Laundering) computer-based training module and other modules in the series, contact ManchesterCF - www.manchestercf.com

ICA Specialist Certificate inTrade Based Money Laundering

Given the complexities and variants of international trade transactions, financial institutions and their corporate clients can face a variety of trade-based money laundering risks throughout their operations. Breaches in anti money laundering compliance can cost millions, if not billions. A recent review by the UK regulator, the FCA, revealed that many firms were not taking adequate measures to mitigate the risk of money laundering and terrorist financing in their trade finance business.

The ICA Specialist Certificate in Trade Based Money Laundering is designed to address key Anti Money Laundering (AML) and Counter Terrorist Financing (CTF) concepts, and the practical issues encountered within the international trade environment.

The qualification will enable you to demonstrate an understanding of:

• The AML context and its relevance in developing good practice• Typologies and techniques• Particular AML & CTF issues• The vulnerabilities of specific services and products

What will you learn?When you undertake the course, in addition to the essential concepts of AML & CTF, you will cover the following areas:

• The fundamentals of trade based money laundering • Risk management • Variable physical goods • Variable pricing of goods • Black market peso exchange

Who is the course suitable for?The course is suitable for anyone who has a professional or personal interest in broadening their knowledge by studying the money laundering and terrorist financing risks inherent in the international trade environment. This will include:

• Senior practitioners who are keen to enhance their existing expertise by learning about another distinct sphere • Senior managers within the international trade environment who wish to certify their knowledge • Operational staff, working specifically within the international trade environment, who need to understand the inherent risks they face • Regulators or Consultants working within the international trade space • MLROs, Compliance Managers, Risk Managers, CDD Managers • Anyone with an interest in the subject matter

• Terrorist resourcing• Proliferation finance• Correspondent banking• Country sanctions• Risk controls

• The need for effective customer due diligence• How to recognise suspicious transactions and relationships• What constitutes effective AML controls• How to approach risk assessments for money laundering

ICTB455

Can the course be taught in-house?An in-house option is available for organisations enrolling a minimum of 15 people onto the course. Benefits include a face to face delivery option and the potential to include bespoke material.

Contact us at ict@int-comp.com for more details.

What does it cost?£450 (includes applicable taxes). If there are multiple enrolments from a firm, discounts may apply.

Get in touch at ict@int-comp.com for details.

Does this count towards ICA CPD?Specialist Certificate courses count as 15 hours of ICA CPD credit.

Entry requirementsThe qualification is specifically designed to be detailed yet accessible. Prior subject matter knowledge will be useful, but is not essential.

The AML focussed Specialist Certificate series from ICA all commence with a brief introductory unit, designed to introduce AML key concepts to those students who are less familiar with the broader context. From there, the more indepth issues are examined.

However, to get the most from the course, a good basic standard of English (particularly reading) is required.

For more information:� +44 (0) 121 362 7534 � ict@int-comp.com� www.int-comp.org

Awarded in association with:

How will you be assessed?At the end of the online course you will take a one hour multiple choice exam of 15 short-form questions. The pass mark

is 70%.

You are not permitted to access any material (off or online) throughout the duration of the exam so although you will not be supervised, you will be required to confirm your understanding of and agreement to this prior to taking the exam.

How and where you can study?The course is fully online so can be studied at any time, wherever you are in the world.