Trade-Based Money Laundering

Chapter 8More Schemes and Facilitators

As noted in the preface of this book, TBML and value transfer are very broad topics. Included are a variety of schemes and facilitators that do not fit neatly into a clearly defined category. Yet they are often intertwined throughout TBML. So this chapter is a bit of a “catch-all” and includes some components of TBML that don't tidily fit anywhere else. They are important because they enhance understanding of the overall concept. These miscellaneous items include: barter trade; service-based laundering; free trade zones; the Afghan Transit Trade; the Tri-Border area, and carousel fraud.

Barter Trade

The concept of value transfer goes back thousands of years, long before the modern concept of coins, paper money, monetary instruments, or electronic blips in an electronic wire transfer. Historically, all commerce is based on exchange, and originally took the form of barter. One party in a transaction traded, exchanged, or swapped an item or commodity or service for another. Bartering is perhaps the most basic form of trade. “I'll trade you flour for sheepskins.” To this day, bartering enjoys many advantages and continues to be practiced around the world—particularly in areas where money is scarce, currency is frequently devalued, there is high taxation, or there are forms of economic and political uncertainty.

Today, barter trade is also growing in developed countries. It is often facilitated by the Internet and social networking sites that ...