REGULATORY INITIATIVES
Example of Money Laundering through Global Trade
Broker takes cartel’s U.S. dollars
in exchange for Colombian pesos.
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United States
2
BANK
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To launder the
U.S. dollars, cartel
contacts intermediary,
called peso broker.
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1
Colombian cartel sells
drugs to U.S. market
for U.S. dollars.
Colombia
Broker’s U.S. employees
place the dollars in
U.S. banking system.
Broker offers
the U.S. dollars
to a Colombian
importer, in
exchange for
Colombian pesos.
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Importer uses the drug U.S. dollars to buy
U.S. goods, which are shipped to Colombia.
Source: U.S. Immigration and Customs Enforcement
only see one side of a trade transaction. For
example, if a U.S. exporter sends $1 million
dollars worth of computers to Brazil, U.S.
customs officers do not know what is being
reported upon entry to Brazil. A Brazilian
importer in collusion with the exporter
could easily change the paperwork to reflect
the value of the shipment as $500,000. This
would allow the Brazilian importer to justify
a reduced payment of $500,000 to the U.S.
exporter, transferring $500,000 additional
dollars in value to Brazil.
This example is a typical TBML scheme
called undervaluing. By invoicing the goods
below the fair market value, the exporter
can transfer value to the importer. Once the
importer sells the goods, he will receive the
full value of merchandise. In this example,
since the importer only paid $500,000 to the
exporter, he still owes the exporter $500,000
because the true value of the shipment was
$1 million. This portion of the debt can be
settled using a parallel banking market like
the BMPE or a similar Brazilian Black Market
scheme called Dolerios. However, if both the
U.S. and Brazilian customs agencies could
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see each other’s trade paperwork, the transaction becomes transparent, allowing law
enforcement personnel to identify fraudulent
transactions indicative of money laundering
and other crimes.
This transparency is the theory behind the
initiation of HSI’s Trade Transparency Unit
(TTU) initiative. The TTU is a collaborative
effort among HSI, U.S. Customs and Border
Protection (CBP), the Department of State
and Department of the Treasury. The first
TTU was established in Washington D.C.
at HSI headquarters. At that time, HSI
began identifying countries who were interested in partnering and sharing trade data.
Currently, HSI has developed partnerships
with Argentina, Brazil, Colombia, Mexico,
Panama and Paraguay. Through these relationships, HSI and foreign TTUs exchange
trade data, allowing visibility to both sides
of a trade transaction.
HSI TTUs bring worldwide recognition to
the threat of trade-based money laundering
and HSI’s efforts to combat and prevent this
threat. Recognized as the best mechanism
ACAMS TODAY | MARCH–MAY 2011 | ACAMS.ORG
to combat trade based money laundering,
TTUs have been highlighted in numerous
U.S. government publications including The
National Money Laundering Threat Assessment, the Department of Treasury’s National
Money Laundering Strategies and the
Department of State’s International Narcotics Control Strategies.
Using specialized software and proven investigative techniques, officers can analyze trade
and financial data to help identify trade transactions and other information that does not
follow normal patterns. To help conduct this
analysis, HSI has developed a specialized
computer system called the Data Analysis
& Research for Trade Transparency System
(DARTTS). This program is used by both
HSI and foreign TTU partners to help identify indicators of money laundering, customs
fraud, contraband smuggling and the evasion
of duties and taxes.
By establishing these international partnerships, TTUs offer another means to link
global customs and law enforcement agencies together, expanding networks to help