Weekly Decision Report: TBML Risks and Australian Bank Controls

This report addresses trade-based money laundering (TBML), focusing on risks and mitigation strategies for Australian banks. It examines how money launderers exploit global trade, particularly through over/under invoicing and phantom shipments, to obscure the origin of funds. The report suggests controls like scrutinizing shipment documents and invoice accuracy. Furthermore, it discusses the role of industry typologies, including those from AUSTRAC, in formulating risk assessment methodologies for AML/CTF officers, emphasizing the evolving nature of money laundering and the need for robust controls to combat sophisticated techniques. The report provides a detailed analysis of TBML methods and potential countermeasures.

Running head: WEEKLY DECISION
Weekly decision
Name of the student
Name of the university
Authors note

1
WEEKLY DECISION
Table of Contents
Answer to question 1......................................................................................................2
Answer to question no 2.................................................................................................3
References......................................................................................................................4

2
WEEKLY DECISION
Answer to question 1
As per financial actions task force( FATF) defined the trade based money laundering
as a process of distinguishing the process of crimes and moving the value through the use of
the trade transactions in order to legitimise the illicitm transactions. Hence this scheme is
highly related on the complexitiy of the global trade as a mean of obscuring the true origin of
the funds. Hence the procedds of thr trade based money laundering can move towards the
financial systems straight out of the buyer to seller payment. Hence the banks basically trade
of the letter of credit and the documentary change (McCarthy et al. 2015). Hence the
common practise for TBML are as follows-
One of an important area to view the trade based money laundering is related to the
over and under invoicing of the goods and services. Hence this scheme involves the collusion
between the company buyer and seller who are often working for the parent company. Thus
rathe than over invoicing the company goes for under involcing since the price for this goes
for below market price. Here the buyer receive the additional profit for the difference
between the fair market value and the purchase price end. Hence the Australian banks can
look to control the effectiveness of money laundering by look on the under and over
involcing of the goods and services (Hopton 2016. ).
Another common technique that often occurs for this case is the phantom shipment
which often occurs when the exporter or buyers buys the goods which are not sent. Hence
they could be making the payments of those goods as if they had been shipped and received
by creating and shipping false transit documents for the goods and services. Hence for the
Australian banks to control the money laundering it is important to check the validity of the
shipment documents at the time of import or export of goods (Caldera et al. 2016).

3
WEEKLY DECISION
Answer to question no 2
The money laundering is an evolving activity. Although this process is needed to
legitimize the procedds related to money laundering (Brenig et al., 2015). Hence the global
and regional regulators have equally implemented the straight measures towards the anti
money laundering and the terrorist financing. Hence due to the implementation of this
process the money launders are using some sophisticated technologies and methods like
TBML especially since it is very tough to set the tone over the illicit funds. Hence it is said
that the money laundering had laundered billions of dollars over the past few decades. Hence
this process calls for controls of trade finance as well as the scopes to improvement. Thus it is
important implement robust controls by the banks in Australia , prolification of funds and the
other complince issues.

4
WEEKLY DECISION
References
Brenig, C., Accorsi, R. and Müller, G., 2015, May. Economic Analysis of Cryptocurrency
Backed Money Laundering. In ECIS.
Caldera, J., Hain, J.M. and Sherlock, K., IDM Global, Inc., 2016. Enhanced automated anti-
fraud and anti-money-laundering payment system. U.S. Patent Application 14/846,169.
Hopton, D., 2016. Money laundering: a concise guide for all business. Gower.
McCarthy, K.J., van Santen, P. and Fiedler, I., 2015. Modelling the money launderer:
Microtheoretical arguments on anti-money laundering policy. International Review of Law
and Economics, 43, pp.148-155.