Trade-Based Money Laundering (TBML)
Laundering value through international trade - manipulating invoice prices, quantities or descriptions to move funds across borders under the cover of legitimate commerce.
Definition
Trade-Based Money Laundering (TBML) is the process of laundering value through the international trade system. The transaction itself looks like a normal import/export, but the invoice price, quantity, description or even existence of the goods is manipulated to transfer value across borders outside the visible financial system.
Core techniques
- Over-invoicing - paying $1m for goods worth $200k transfers $800k to the exporter's account legitimately.
- Under-invoicing - the inverse, used to repatriate funds discreetly.
- Multiple invoicing - the same shipment financed multiple times.
- Phantom shipments - no goods at all; only paper.
- Mis-description - goods declared as one category, shipped as another (often higher-value).
Why TBML is hard
TBML straddles trade finance, sanctions, customs and AML - domains that rarely share data. Detection requires reconciling commercial-invoice data with bills of lading, shipping manifests and customs declarations, plus comparing declared unit prices against market benchmarks.
Regulatory anchor
FATF / Egmont Group jointly published the canonical TBML typologies (2020, updated 2023). The Wolfsberg Group Trade Finance Principles set the industry baseline. In the EU, the UCC (Union Customs Code) and AMLD framework apply jointly.