Trade-based money laundering (TBML) has become one of the most challenging threats facing the financial system, as illicit funds can be hidden behind legitimate commercial flows.
According to IMTF, criminals manipulate invoices, customs declarations and shipping records to disguise the movement of money, using the sheer scale and complexity of global trade as cover. With trade volumes expanding, instant payments accelerating transfers, and geopolitical tensions reshaping supply chains, TBML has become the fastest-growing laundering method and a critical blind spot for regulators and institutions.
The destabilising impact of global shocks has pushed TBML into sharper focus. The Russia–Ukraine war, rising sanctions pressures and widespread supply chain disruption have made cross-border trade both more urgent and more vulnerable. These pressures are amplified by the speed at which payments can now be settled, creating opportunities for illicit flows to slip through undetected. For institutions handling high-value transactions, even a single incorrect document or manipulated invoice can allow millions to be obscured within routine commercial activity, making anti-TBML controls an essential component of modern AML frameworks.
Three interconnected factors are driving the urgency to address TBML: its vast scale, its central role in sanctions evasion, and increasing regulatory intervention. FATF estimates that TBML accounts for around USD 1.6tn a year, and that up to 80% of illicit flows in developing markets move through trade channels. Incentives have intensified further, with FinCEN reporting that Chinese networks and Mexican cartels laundered more than USD 312bn through TBML between 2020 and 2024. Tariffs rising as high as 50% also encourage invoice manipulation and transshipment strategies. Combined with geopolitical tensions, these dynamics create fertile ground for criminals to exploit trade.
The Russia–Ukraine conflict has elevated TBML as a primary sanctions-evasion technique. Shadow fleets, diverted cargo routes and disguised shipping activity have become common tools to bypass restrictions. Regulators in the EU and Switzerland tightened controls on dual-use goods in 2024 and 2025 respectively, reflecting concerns about technology exports being repurposed for military use. These moves form part of a broader international push to close TBML loopholes, including FinCEN’s 2025 requirement for institutions to adopt risk-based monitoring across all trade counterparties and OFAC’s insistence on screening against both SDN and non-SDN lists, even for complex supply chains.
Traditional TBML techniques such as mis-invoicing, false descriptions, multi-invoicing and phantom shipments remain widespread, with Global Financial Integrity estimating that mis-invoicing alone represents 63% of all known cases. Schemes such as the Black Market Peso Exchange also continue to circulate criminal proceeds through informal trade systems. However, newer typologies have evolved rapidly in response to geopolitical and technological developments. The International Maritime Organization has reported sharp increases in vessel identity laundering, AIS spoofing, flag hopping and other forms of maritime fraud, while FATF’s 2025 review highlights multi-layered shipments, ship-to-ship transfers and opaque beneficial ownership structures as growing concerns.
Technology has created further vulnerabilities. Instant payments and virtual asset service providers enable funds to move quickly, often without clear links to underlying trade documentation. These blind spots make TBML significantly harder to detect using traditional systems, especially given the volume and complexity of international documentation. Key records such as invoices and bills of lading are often delayed or incomplete, limiting institutions’ ability to assess inconsistencies. Data silos between banks, insurers, shippers and customs agencies further obscure visibility, creating an appearance of legitimacy that criminals can exploit. With thousands of parties often involved across complex supply chains, TBML can be deeply embedded within routine trade, making it difficult to distinguish illicit activity from normal commerce.
Regulators have emphasised the need for a holistic approach to combatting TBML. Speaking about recent cartel investigations, FinCEN director Andrea Gacki said: “Financial institutions should be taking a holistic approach, looking at all the red flags identified in the advisory and into their compliance programs, and the error would be to look myopically and focus only on one aspect.” This underscores the need for strong documentation, connected datasets and collaborative monitoring. Access to complete trade records, particularly in open account transactions, is central to this effort. AI-powered analytics are increasingly vital, enabling institutions to detect pricing anomalies, vessel deviations, identity fraud, and behavioural red flags at scale. Bringing together AML, sanctions, KYC, PEP checks and adverse media data also helps create a unified risk view that reduces blind spots across counterparties and transactions.
Siron®One aims to address many of these challenges through an end-to-end compliance platform designed to consolidate trade, vessel and risk data. By integrating KYC, AML/CFT, sanctions screening, adverse media and case management into a single environment, it provides institutions with a “single source of truth”. Continuous monitoring, including perpetual KYC and automated enhanced due diligence, ensures that changing risk profiles are captured in real time. Its vessel intelligence tools combine AIS tracking, identity-fraud detection and route monitoring with automated screening against SDN, non-SDN and dual-use goods lists. With a hybrid AI architecture that blends rules-based controls with machine-learning anomaly detection, Siron®One provides a layered approach capable of identifying both established and emerging TBML techniques, offering a comprehensive line of defence against one of financial crime’s most complex threats.
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