Trade-based money laundering costs billions
According to US officials, international drug criminals are laundering hundreds of billions of USD in profits through the schemes of trade-based money laundering.
A new report was issued by the United States’ State Department’s Bureau of International Narcotics and Law Enforcement Affairs. It indicates that trade-based money laundering schemes are at an all-time high. A Justice Department official noted that fighting black market cash laundering through intentionally undervaluing or overvaluing exports is a top priority.
At a recent anti-money laundering conference in Miami, principal deputy chief at the Department of Justice criminal division Lester Joseph said that trade-related laundering is one of the priorities of the Obama’s administration.
According to a professor of finance at Florida International University, John Zdanowicz, who analyzes trade data for abnormally priced products, the banking system is the front door of money laundering. He said that “the government has done a pretty good job of closing the front door, but the back door - international trade - is wide open”. Zdanowicz thinks that it is easy for criminals who work with overseas partners to intentionally undervalue exports and then to sell them for full price.