Strategic Analysis Report on Trade-Based Money Laundering (TBML)

The UAE is recognized as a country with a diverse and multicultural population, a secure and stable economy, and strong institutions. It has an accessible financial system, a dynamic market, a strategic geographic location between Asia, Europe, the Middle East and Africa and its well-developed international trading and financial hub. Criminals can exploit the UAE's inherent characteristics in several ways for ML/TF, including its trade system.

TBML is the process of disguising the proceeds of crime and moving value using trade transactions to legitimize their illegal origin or finance their activities (The aim is not the movement of goods but rather the movement of money, which trade transactions facilitate).

The report found 6 emerging typologies associated with possible trade-based money laundering (TBML) activities:

1.    Use of back-to-back letters of credit
2.    Presentation of fictitious documents
3.    Phantom shipments (or fictitious trades)
4.    Over or under-invoicing
5.    Accounts used as a pass-through
6.    Use of shell and front companies

Click here to read the full report.