Global Threat Assessment
by John Cusack
Despite the limitations presented in estimating criminal activity designed to be hidden, the results in the Global Threat Assessment present a bleak picture.
Criminal markets are generating more illicit funds than at any other time in our history, with ever more harmful effects inflicted against every Country, against billions of people and against our increasingly fragile environment.
We are witnessing the transformation of organised crime into very big business, leveraging networks to connect criminal actors, adopting poly criminality, embracing new cyber tools and opportunities afforded by the transformation to digital.
How big, which Countries, by what Methods and by which Gangs, is summarised in this Global Threat Assessment, using over 100 publicly available studies or reports from credible sources, together with personal observations and recommendations from the author.
Extract from the Wolfsberg Group: The Wolfsberg Group, with the support of the International Chamber of Commerce (ICC) and the Bankers Association for Finance and Trade (BAFT), launched a short awareness video focussed on Trade-Based Money Laundering (TBML):
This supplements both the 2009 Wolfsberg Trade Finance Principles and the 2017 publication of a more comprehensive paper, produced in close collaboration with both the ICC and BAFT.
While TBML is a serious financial crime threat, and increasingly a means by which criminals launder billions of dollars each year, it is also one of the least understood. As the volume of trade finance transactions provided by non-bank entities (open account transactions) increases, the visibility that banks have of end to end trade finance activity decreases.
Over the two years since the publication of the 2017 Trade Finance Guidance, the working group made up from Wolfsberg members, BAFT and ICC began focusing more deeply on two important products that are prominent in global trade, namely open account trade and FI Trade Loans. For open account trade, which simply put is trading activity between buyers and sellers on their own terms without the need for traditional documentary trade finance products, there are fewer specific additional controls to be considered for an FI.
Naturally, where either buyer or seller is a direct customer of an FI, the usual transaction monitoring will be working to identity potentially suspicious or unusual transactions. For Bank-to-Bank Trade Loans, which is a popular and important trade finance product used to help fund another FI’s trade finance activities, these do present specific risks that we have highlighted, which include both TBML and sanctions risks. Continue reading