Trade-Based Money Laundering (TBML)
Definition
A typology that uses international trade transactions to transfer value across borders. Mechanisms include over-invoicing or under-invoicing goods, falsifying quantities or descriptions, multiple invoicing for the same shipment, and phantom shipments. TBML exploits the complexity and volume of global trade to make illicit transfers appear to be routine commercial settlements.
Related terms
- Integration
- The third stage, in which laundered funds re-enter the legitimate economy as apparently clean wealth. Common integration mechanisms include real estate purchases,...
- Layering
- The second stage, designed to sever the audit trail between the illicit source and the funds. Layering typically involves a rapid series...
- Placement
- The first stage of money laundering, in which illicit cash is introduced into the financial system. Methods include cash deposits, currency exchange,...
- Beneficial Owner
- The natural person who ultimately owns or controls a legal entity or arrangement, as distinct from the nominee or registered owner. Anti-money-laundering...
- Shell Company
- A legal entity with no genuine business operations, created to receive fraudulent payments. In vendor fraud, the fraudster controls the shell and...
- Smurfing (Structuring)
- Breaking a large cash sum into multiple smaller transactions, each below the mandatory reporting threshold, to avoid triggering Currency Transaction Reports or...
- Structuring (Smurfing)
- A placement-stage technique in which large cash amounts are broken into multiple smaller deposits or transactions, each deliberately kept below the threshold...
Explained in these topics
- Money Laundering: Placement, Layering, and IntegrationA method that moves value by manipulating import and export invoices, over- or under-stating prices or quantities to transfer value between parties while the t...
- Money Laundering Typologies and Audit IndicatorsA typology that uses international trade transactions to transfer value across borders. Mechanisms include over-invoicing or under-invoicing goods, falsifying...