Move the paperwork, not just the goods: mis-priced invoices, phantom shipments and circular trades let value cross borders inside ordinary commerce — the FATF and Egmont Group rank trade-based money laundering among the hardest schemes to detect.
The rating above is indicative — it reflects inherent risk as assessed in the published frameworks, not a verdict on any business. Entire industries serve these sectors as business as usual; the rating your firm actually applies comes from its own business-wide risk assessment, where the sector factor combines with your customer base, controls and risk appetite.
The FATF/Egmont report on trade-based money laundering (2020) catalogues the core techniques — over- and under-invoicing, multiple invoicing of the same goods, phantom shipments, and mis-description of goods — and was followed in 2021 by a dedicated set of risk indicators for the private sector. Payments routed through parties or jurisdictions that appear nowhere on the trade documents are the recurring thread.
Because every trading company touches the same rails — banks financing the trade, forwarders moving it, professionals structuring it — the risk is distributed: the company itself may be unremarkable while a single trade leg carries the scheme. Trade documents, not just counterparties, are the unit of scrutiny.
Firms serving traders should sanity-check pricing against market ranges, match payment flows to documented parties, and treat third-party settlement as a standing red flag. Sector risk combines with geography, the customer’s profile and the product to set the overall rating — and every client still needs sanctions, PEP and adverse-media screening on the parties themselves.
