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. The updated paper exploring these areas was published in April 2019.
To view a Trade Based Money laundering Awareness Video see here.