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IOM Publishes Trade-Based Money Laundering Notice

by Jason Gorringe, Lowtax.net, London
21 August, 2015

The Isle of Man Customs and Excise Division has published a notice concerned with the use of real or bogus trade as cover for the movement or laundering of illicit funds, from a variety of frauds, generally referred to as trade-based money laundering.

In recent months a number of bodies have highlighted the growing and continued risk from trade-based criminal activity. For example, studies by the Financial Action Task Force have concluded that trade-based money laundering represents an important channel of criminal activity, which is likely to become attractive to criminals as other means of money laundering become less attractive due to tighter controls and the exchange of information in regulated sectors.

The Isle of Man Government issued the notice in order to help raise awareness of the risks and to highlight the fact that it is not only banks and other regulated financial institutions that are at risk of being used in money laundering. Anyone involved in trade, particularly cross-border trade, or setting up or administering trading companies, importers, exporters, freight forwarders, and carriers can be at risk of being used in trade-based money laundering.

The notice contains a number of case studies and indicators (or red flags), which demonstrate that trade-based money laundering and other trade-based financial crime goes beyond the obvious under- or over-pricing of consignments, false description of goods, or using paperwork for fictitious shipments.


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