3. Money Laundering
Criminals launder 2-5% of global GDP annually (USD 1.7-3.8 Trillion)
80% of illicit flows from developing countries use trade-based
schemes
2012 - USD101 Billion illicitly smuggled into China via export over-
invoicing, and an additional US$54 billion flowed in illegally in the first
quarter of 2013 alone
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4. Example Practices
Over/under invoicing
Multiple invoicing
Over/under shipment
Misrepresentation of goods
Cash / money exchange networks to circumvent banking controls
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5. Financial Crime – Regulatory Response
Massive fines and settlements
Cease & desist orders / ongoing monitoring
Suspension of clearing authority
Revocation of export licenses
Personal accountability for executives
Cross-jurisdiction cooperation
Extension of regulatory authority
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6. Trade Transparency Units
Designed to examine international transactions to identify trade
anomalies and financial irregularities indicative of TBML, customs
fraud, contraband smuggling, tax evasion, and contravention of
international sanctions.
TTUs are active in USA, Argentina, Brazil, Colombia, Mexico, Panama,
Paraguay, and the Philippines.
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7. Financial Crime – Bank Response
Board level priority
Increase in compliance staff, investment in IT
De-risking: 1 in 3 surveyed banks exited correspondent relationships
68% of banks declined transactions due to AML/KYC concerns
61% of banks noted AML/KYC requirements are a significant
impediment to providing credit
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