Trade-Based Money Laundering

Chapter 6Misuse of the International Gold Trade

The transfer of value through the misuse of the international gold trade is one of the oldest and most pervasive forms of international money laundering in the world. And in terms of total monetary value, some of the largest money laundering schemes in history have involved gold. Because of its unique nature—it is both a commodity and a de facto bearer instrument—it is often used to both store and transfer funds. Gold is used in all three stages of money laundering: placement, layering, and integration. It is attractive to both criminal and terrorist organizations. Gold also plays an important role in alternative remittance and underground financial systems such as the black market peso exchange, hawala, and fei-chien. In short, there is nothing else like it out there.¹

As the reader has seen, just about any commodity can be used in TBML. I could launder money with a shipment of apples! However, if a criminal organization wanted to launder lots of dirty money or transfer significant value via trade, gold is one of the favored commodities. Its intrinsic value is high and so is its value to mass. It is a very efficient laundering vehicle.

Why Gold Is so Popular with Money Launderers

To fully understand why gold's unique properties make it so popular with money launderers, one must consider a wide variety of factors.

Gold Has Been a Haven of Wealth Since Antiquity

Since the dawn of recorded history, in diverse locales and cultures, ...