Trade Based Money Laundering is one of the most complex forms of money laundering, where criminals exploit international trade systems to disguise illicit funds. It typically involves the manipulation of trade invoices, such as under-invoicing, over-invoicing, and misrepresentation of goods, to move money across borders undetected. Given the global nature of trade, trade-based money laundering can occur across multiple jurisdictions, making it difficult for authorities to trace illicit flows. However, with our advanced solution, the TradeWatch, organizations can effectively monitor and detect suspicious trade activities, ensuring that all trade transactions are thoroughly vetted.

Our solution leverages cutting-edge technology to detect red flags in trade data. The system identifies anomalies that could indicate money laundering by analyzing multiple data points such as goods’ declared values, vessel tracking, and the relationship between parties involved in the transaction. It can track the movement of goods from origin to destination, monitor discrepancies in invoicing, and raise alerts when transactions deviate from standard pricing benchmarks.

Additionally, our TradeWatch solution ensures that financial institutions meet the stringent reporting requirements set by regulatory bodies. With built-in features like Red Flag Indicator (RFIs) from regulators and monitoring of payment attributes such as sender and beneficiary details, organizations are equipped to provide detailed transaction reports promptly. This allows institutions to maintain transparency in trade dealings and avoid hefty penalties for non-compliance, fostering trust and integrity in global trade operations.

Modules:

• Identifying Dual-Usage Goods: TradeWatch identifies dual-use goods by referring the watchlist with both legitimate and illicit uses. It monitors transactions involving these goods, automatically flagging high-risk items and raising alerts when suspicious patterns are detected, thus helping financial institutions effectively address potential trade-based money laundering schemes.
• Vessel Tracking: Our solution can be integrated with APIs provided by various agencies to monitor vessel movements , helping to spot deviation from the voyage route specified in the documents. By comparing the reported routes of vessels with their actual movements, we can find issues like unreported stops or changes in their paths. Our algorithms analyze these differences along with transaction data to identify possible illegal activities, such as smuggling or avoiding taxes. This system gives compliance teams clear insights and alerts, making it easier for them to investigate quickly and improve compliance in international trade.
• Over-Invoicing and Under-Invoicing Detection through Commodity Prices: Our solution detects over-invoicing and under-invoicing of goods by integrating with data provided by various watchlist providers. Using advanced analytics and machine learning, we benchmark trade values against market prices to identify significant deviations indicative of fraud. Each transaction receives a risk score based on historical behavior and anomalies, enabling compliance teams to focus on high-risk cases.
• Cross-Border Wire Transfer Reporting (CBWTR): Our solution enhances cross-border wire transaction security by using advanced monitoring to track key transaction attributes, such as sender and receiver details, BIC codes, and amounts. It employs rigorous KYC checks and screens transactions against sanctions lists to detect financial crimes like money laundering and fraud.
• Red Flag Indicator (RFI): Our solution comes with all the regulatory recommended RFIs out of box to detect suspicious trade transactions. Organizations also have provision to create the new scenarios based on their experience and requirements.
• Monitoring Payment Attributes: TradeWatch closely analyses key payment attributes such as sender name, beneficiary name, sender and receiver bank codes (SWIFT/BIC), correspondent banks, and vessel/aircraft details (such as ports and airports). This helps identify patterns or anomalies in fund transfers that could be tied to fraudulent trade practices. Additional attributes like transaction value, time of payment, and frequency can be used to detect structured payments or unusual fund movement patterns.

Key Benefit:

• Enhanced Risk Detection: Identifies suspicious trade activities like under- or over-invoicing and misclassified goods, reducing the risk of financial crimes.
• Comprehensive Compliance: Ensures compliance with international regulatory standards and facilitates accurate reporting to authorities
• Proactive Monitoring: Provides real-time monitoring of vessel movements, transaction details, and payment attributes, ensuring early detection of red flags.
• Operational Efficiency: Streamlines risk management processes by automating data analysis and alert generation, saving time and resources.

Source System Integration:

• Intelligent ETL Process: Our system automatically gathers and combines data from different internal and external sources into one place. It organizes the data into a consistent format, making it easier to monitor, analyse, and report, so you get more accurate insights
• Real-Time Data Exchange and Monitoring: Using APIs, our system allows data to be shared instantly between platforms. This real-time data flow helps with continuous monitoring and analysis, improving efficiency and enabling faster, smarter decisions