Experts say that trade finance firms also don’t have the skills and technology they need to do their jobs properly. Money laundering has become such a big business that more and more criminals are turning to international trade-based money laundering.
The regulator said that if trade finance firms haven’t already, they should look at all of their financial crime risks, such as money laundering, sanctions evasion, terrorist financing, and fraud. Some of the things that are brought up in the letter are money laundering, avoiding sanctions, funding terrorism, and fraud. The FCA said that it would keep a closer eye on all of these areas to make sure they were following the rules.
The trade finance firms should read or reread the guidance from the Joint Money Laundering Steering Group (JMLSG) on this issue. They should also read the International Chamber of Commerce’s Trade Finance Principles.
The Financial Action Task Force made a helpful list of trade finance red flags to watch out for in March 2021. Companies need to spend more on AML and KYC technology because of the regulator’s strict scrutiny. Automated solutions can help by making it much easier to spot red flags.
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