“Transferring value through legitimate trade transactions has become increasingly attractive avenue for money launderers (ML) and terrorist financiers (TF), as they are able to easily obscure their transactions in significant volumes of international trade and escape detection,” SBP said in ‘Framework for Managing Risks of Trade Based Money Laundering and Terrorist Financing’ on its website on Tuesday. “The main methods by which such people (ML/TF) transfer value through legitimate trade transactions are under invoicing, over invoicing, short/over shipment, obfuscation of type of goods/services etc” it added. The prime objective of this framework is to strengthen the trade related Anti-Money Laundering (AML)/ Combating Financing of Terrorism (CFT) regime and conserve foreign exchange, the central bank said. It also instructed the banks to adopt technology-based solutions and enhance capabilities of their staffers through regulator trainings to detect the likely money laundering and terror financing transactions through the banking channels. “Authorized Dealers (ADs which mostly are the banks) shall allocate adequate resources to create awareness of the ML/TF risks associated with trade transactions with specific focus on typologies of TBML, common red flag indicators and the measures to mitigate trade-based money laundering (TBML) risks,” SBP said.

Source: The Express Tribune October 16, 2019 03:22 UTC