Mayfair Compliance is one of the few consultancies in the world delivering reliable, up-to-date strategies to combat trade-based money laundering (TBML).

Our consultants boast a mix of industry experience and academic expertise that bring high levels of certainty to understanding TBML - the ever-increasing movement of illicit money across borders via seemingly bona fide trade transactions.

With the sheer volume and value of trade-based deals processed through the global economy daily, trade-based money laundering (TBML) is arguably the hardest form of money laundering to manage and prevent. However, facilitating trade-based transactions remains a key product offering for financial service providers hoping to remain relevant in an increasingly competitive financial services sector. Understanding the fundamental risks to both your own company as well as to that of your clients is an essential first step in providing a respected, turnkey trade-based transaction services. Additionally, clients need to be certain that their transnational transactions are being conducted with the highest degree of circumspection and professionalism.

It is interesting to delve into the current literature regarding TBML, which attempts to clearly define for instance, what constitutes a reasonable suspicion that a transaction is illegal or involves illicit funds, as well as at what point that financial service provider is obliged to report that suspicion to the authorities.

Letters of credit as a financial mechanism have been lauded as the keystone of international trade – particularly on a granular level where medium and small-scale transactions account for the majority of global trade. Letters of credit enable a requisite degree of trust between international buyers and sellers, who by definition are in different countries, and are unlikely to have developed a trust-based business relationship. The issuance therefore of letters of credit by banks attracts scrutiny from authorities, and the processes and procedures must be impervious and pristine in order to meet with most TBML regulations. It is essential for the evolving bank or financial service provider to understand the mechanics of trade-based transactions and the associated risks.

The banking and financial services sector must address other TBML pressure points. These include the screening of personnel, understanding the disparities between regulatory frameworks by country, as well as how to correctly read and interpret trade-based documentation. Documentation for such transactions come from a multitude of sources, and require special training to interpret – from shipping and customs documents, to safety and inspection certificates, freight and handling documentation as well as the plethora of foreign exchange forms and documents required.

Developing rational, achievable and manageable protocols with regard to Letters of credit, as well as other processes involved in trade-based transactions, is one of Mayfair Compliance’s core strengths. We have a number of TBML experts available to work with your teams to establish what your TBML risk is, and what your responsibilities are in terms of your region or country’s TBML regulations. We will further design and implement staff and management training programmes designed around the specific needs and organisational realities of your company.

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