Australia's government agency for detecting, deterring and disrupting financial crime has published guidance providing indicators and behaviours to help financial service providers - particularly those engaged in trade financing - to detect and report suspicious financial activity.

The guidance by the Australian Transaction Reports and Analysis Centre (Austrac) is also intended for government agencies and aims to help users understand and identify trade-based money laundering (TBML).

Overview

Preventing trade-based money laundering in Australia includes case studies as well as indicators that can be used to identify if TBML could be occurring.

The indicators and behaviours in Austrac's latest financial crime guide can be used by financial service providers to review their profiling and transaction monitoring programmes to target, identify and stop TBML associated financial transactions.

The guide was developed in partnership with the Australian Border Force by the Fintel Alliance, a public-private partnership led by Austrac that brings together government, law enforcement, private and academic organisations.

Suspicious matter reporting

Financial service providers should use a combination of indicators highlighted in this report and business knowledge to conduct further monitoring and identify if there are reasonable grounds to submit a suspicious matter report (SMR) according to Austrac.

If providers identify possible indicators of TBML or other criminal activity through financial transactions and determine they should submit an SMR and include clear behavioural and financial indicators in their report. This will help Austrac and its law enforcement partners to respond and take action.

Documented trade finance

The guide has a specific section on documented trade finance provided by financial institutions to facilitate the payment of goods through invoice financing and payment guarantees, typically encompassing 'documentary trade' such as letter of credit and document collections, trade finance loans, payable finance and receivables finance.

It provides examples of TBML techniques employed by criminals in this area, including falsified documents and evidence, inflated or deflated values of goods compared to market value and significant price differences for the same or similar goods previously traded by the customer with no logical explanation for the price difference.

Austrac's guidance, Preventing trade-based money laundering in Australia, can be found here.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.