Trade-Based Money Laundering

Chapter 11Conclusions and Recommendations

Get Serious about TBML

In 2005, I wrote my first book, Hide & Seek: Intelligence, Law Enforcement and the Stalled War on Terror Finance. The final chapter of the book contained a number of “steps forward.” The first recommendation was, “Get Serious about TBML.” It should come as no surprise that, years later, I have exactly the same conclusion and priority recommendation!

I would like to quote from the earlier recommendation in Hide & Seek: “The misuse of trade should be the next frontier in anti–money-laundering programs. Just as a generation ago the United States promoted financial transparency, today it is time to promote trade transparency. International trade is a back door for money laundering, illegal value transfer, customs fraud, tax cheating, and various alternative remittance systems.”¹ That earlier prescription is in fact the theme of this book.

Nothing has changed my mind in the intervening years: trade transparency should be the new priority in AML/CFT enforcement. In Chapter 1, we discussed the magnitude of international money laundering. Worldwide estimates are in the trillions of dollars. As demonstrated, if we honestly examine the sheer volume of illicit proceeds laundered and the increasing recognition that tax evasion is another form of money laundering, our success rate as measured by the one meaningful bottom-line metric—convictions—is pitiful.

So it is time to question the effectiveness of our current countermeasures. ...