How to Effectively Audit Financial Crime Risks in Trade Finance in a Complex Regulatory Environment

Author: Ralph Guillou, CAMS-Audit

Trade finance is considered a high-risk product often used by bad actors and criminal organizations to launder funds, conduct terrorist financing and evade Office of Foreign Assets Control (OFAC) sanctions regulations or other restrictions. Banks that provide trade finance services are under significant regulatory pressure to develop consistent standards across the complete suite of trade finance products to mitigate financial crime risks.

The Financial Action Task Force (FATF), the Wolfsberg Group and the Joint Money Laundering Steering Group (JMLSG) have all drawn attention to the misuse of international trade finance as one of the ways criminal organizations and terrorist financiers move money to disguise its origins and integrate it into the legitimate economy.

This white paper will address financial crime compliance (FCC) risks, red flags and best audit practices for identifying control deficiencies and risk mitigation in the trade.

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