Identifying high-risk indicators is crucial in mitigating compliance risks in international trade. Learn about key warning signs and practical mitigation strategies.
Introduction
Money laundering (ML), terrorist financing (TF), and sanctions evasion pose significant risks to international trade and cross-border transactions. Identifying high-risk indicators is essential for customs, export control, and sanctions compliance professionals. This article explores key red flags associated with high-risk sectors, jurisdictions, complex ownership structures, nominee shareholders, unusual transactions, politically exposed persons (PEPs), and more, with a focus on global trade compliance.
Key Questions to be Answered
What industries are considered high-risk for ML/TF in international trade?
How do high-risk jurisdictions impact global trade compliance?
Why are complex ownership structures a red flag in trade transactions?
What risks do asset-holding vehicles pose in cross-border trade?
How do nominee shareholders and bearer shares increase risk in trade finance?
Why should unusual transaction patterns in trade be scrutinised?
What are the risks associated with PEPs in international trade?
Why are wealthy individuals with significant influence a concern in global trade?
What are the challenges of onboarding non-face-to-face trade clients?
How do transactions without economic purpose indicate potential ML/TF in trade?
Understanding High-Risk Indicators in Trade
1. High-Risk Sectors in International Trade
Certain industries are more susceptible to ML/TF due to high-value goods, opaque supply chains, or regulatory gaps. These include: