EXPERTS SAY LEGISLATION TO EFFECTIVELY COMBAT TRADE-BASED MONEY LAUNDERING HAS NO CHANCE OF PASSING IN 2024, DUE TO PARTISAN POLITICS OF DO-NOTHING U.S. CONGRESS AHEAD OF PRESIDENTIAL ELECTION

The "Combating Cross-Border Financial Crime Act of 2023," a bipartisan effort to rein in Trade-Based Money Laundering by creating the Cross-Border Financial Crime Center, appears to have zero change of passage by Congress in 2024, due to purely political reasons. The Republican-controlled Congress, which is fixated upon blocking any effective legislation that might politically support the re-election of the present administration, is committed to even interfering with proposed laws that support TBML suppression. No wonder public confidence in Congress has reached a new low.

Experts in Washington estimate that the bill, which is languishing in Committee, has only between a two and five percent chance of success during the current session of Congress, even though the failure rate at detecting and interdicting TBML is believed to be an abysmal 99%. The bill, which would greatly strengthen DHS' ability to fight Trade-Based Money Laundering, by focusing strictly upon cross-border crime, is intended to be a game-changer, to suppress a type of money laundering that the private sector has been heretofore totally unable to control.

It is a sad indictment of Washington politics that elected officials are more concerned about who can take back the White House, rather than a transnational crime that the Senate has pronounced a threat to National Security of the United States. The bill is Senate 3384.

THE CENTER FOR THE STUDY OF SPACE CRIME, PIRACY AND GOVERNANCE

The Center for the Study of Space Crime, Piracy and Governance is an independent, nonpartisan think tank whose purpose is to serve as a policy resource for government officials and business executives on issues related to space governance, sovereignty, commerce, law, crime and piracy http://www.cpcpg.org.

MOVEMENT OF TIME-SENSITIVE ASIA-TO-EUROPE GOODS FROM TRADITIONAL MARITIME TRANSPORT INTO AIR CARGO, DUE TO RED SEA DANGERS, GIVES TBML OPERATORS AN ADDITIONAL CARD TO PLAY

According to industry observers, some companies that generally ship their Asia-produced consumer goods to the Member nations of the European Union, through the now-unavailable Suez Canal route, have abruptly switched to sending them via air cargo. Available statistics indicate a 63% increase in westbound air cargo traffic in January, regarding the types of goods which require timely receipt for distribution in retail markets, such as designer clothing, which must be on the shelves by specific dates on the calendar, to maximize sales. Prices to consumers are expected to increase accordingly, due to additional transport expenses incurred.

This information is significant for compliance officers in that international air transport of goods is completed in hours, a much shorter period than the days and weeks it takes for maritime transport from one continent to another. The window that compliance has to identify potential Trade-Based Money Laundering transactions is therefore extremely short, and multiple repetitions of the same TBML scheme can be completed, should the first one go through undetected.

Additionally, air cargo arrangements can be initiated and airborne in short order, and land before compliance even becomes aware of it. In short, a huge amount of new air cargo shipments might overwhelm the ability of bank compliance officers to properly review them. All this new air cargo traffic might facilitate expanded TBML operations. We trust that compliance departments are not only aware of the increased aviation shipping traffic, but that they have taken steps to monitor it, to insure that it is not being ignored. Remember that laundrymen using TBML tricks are flexible and reactive; any opening that might be occurring will find them there ahead of gatekeepers.

HAMAS MEMBERS WHO WORK FOR UNITED NATIONS NAMED AND THEIR PHOTOS PUBLISHED

A dozen employees of the UNRWA, the United Nations agency that provides aid and assistance in Gaza have been identified by Israel as HAMAS agents who were allegedly involved in the October 7 attack upon Israel. The UN has reportedly terminated them, pending an investigation, and many Western countries, including the United States, have announced that they have stopped funding the activities of the UNRWA.

The names appeared on a website of a group that monitors UN activity. Israel has reportedly delivered to the US a dossier containing specific evidence and proof against each of them, which includes incriminating social media pages of those former UN employees, and their UN employee contract numbers. The UN has announced that, where appropriate, criminal charges will be filed. We are listing their names for compliance purposes only, and note that these are merely allegations; they have not been convicted.

Compliance officers should understand that some of these individuals may now choose to flee and relocate outside of the region, to avoid arrest and prosecution for war crimes, homicide, or other terrorism offenses, and could turn up anywhere, armed with significant funding from Hamas, and seeking to open accounts. Expect that they will have passports from Jordan, Lebanon or Syria, and may be using aliases. You are advised to check any new accounts where the individuals speak Palestinian-accented Arabic, or where their stated place of birth is within Israel or either Palestinian Territory.

ISRAA ABDUL KAREEM
WASEEN MEDHAT ABO EL ULA
MOREED ABDULAZIZ ISSA
WEAM MAJDI KALLOUB a/k/a MAJDI ASSAM
SHATHA HUSAM ALNAWAJDA a/k/a SHATHA ELNAWAJHA
HADEEL AL BASET MEHDI a/k/a HADEEL MAHDI
IBRAHIM SAMI EL SULTAN a/k/a IBRAHIM SULTAN
SAFAA MOHAMMAD AL NAJJAR a/k/a SAFA AL-NAJJAR
ABDUL RAHMAN IBRAHIM HUSSEIN ZAQOUT
ABU YASEEN
ARDALLAH MEHJAZ

AMERICAN RESPONSE TO ATTACK ON U.S. MILITARY IN JORDAN WILL PROBABLY INVOLVE GIVING TBML LAUNDRYMEN STILL MORE MARITIME CHAOS IN WHICH TO OPERATE WITH IMPUNITY

Strong statements, coming from several official quarters in the United States, including the President, regarding a military reply to events this week against American troops in the Middle East, has led most observers to believe that the reaction will involve Iranian naval assets that support Houthi operations, which minimizes the threat of precipitating a wider war. Such action, which will most likely include attacking Iranian warships and intelligence-gathering vessels in international waters, will raise significantly risk factors to global shipping,

Attacks by the United States Navy and Air Force against Iranian maritime assets, in the region, will cause immediate countermeasures, for risk management purposes, in the shipping industry. These reactions will be varied, making traditional TBML Red Flags, and even conventional Risk-Based, guidelines obsolete, IMHO. Money launderers will seize upon the chaos to change up, and increase, their TBML operations, knowing that normal rules do not apply in periods of ongoing military action on the high seas.

I know from personal experience that money launderers, who monitor unfolding events much more closely that busy compliance officers, who are busy seeking to identify changing TBML patterns, and are innovative and and instantly adaptive to emerging opportunities, will modify their methods long before compliance officers themselves realize the game has changed. New TBML Targets of Opportunity will emerge and be accessed; compliance must be sensitive to every nuance if they wish to win the daily battle against trade-based money laundering within their bank.

Watch for newly-emerging TBML in places where you haven't seen it before, as laundrymen are betting that you are too busy trying to understand the chaotic situation to spot them; be alert to new pipelines.

WHAT IS THE IDEAL PREPARATION TO BE A COMPLIANCE OFFICER THAT CONDUCTS TRANSACTION MONITORING FOR TRADE-BASED MONEY LAUNDERING AT A BANK WITH INTERNATIONAL CLIENTS?

While we have previously detailed how the knowledge of advanced TBML techniques is mandatory for any compliance officer who is responsible for Transaction Monitoring at their place of employment, who is involved in Trade-Based Money Laundering detection and interdiction, perhaps we should start at the beginning. What is the best training and experience for anyone who contemplates a career in AML/CFT, focusing on TBML?

If I was giving advice to someone headed off to his or her first year at university, and who wants to ultimately be in banking, but in the compliance sphere, here is what I would tell them:

1. You need a good general education on how the business world operates; this means not a Liberal Arts degree, but a B.B.A. If for some reason, a Business degree does not excite you, then the other way you can achieve that level of necessary business literacy is law school after college. If your level of ambition includes a desire to one day be a Director of Compliance at a major bank, look at how many of those positions are held by lawyers, and govern yourself accordingly. Also, regular readers of my articles over the last three decades know that I am a firm believer in the training in Issue Perception, which is a learned skill at law school, which uses the case method to teach black-letter law, and demands that you extract the relevant issues to learn legal principles.

2. If you are dead-set on a TBML-focused career, some practical experience, hopefully during summers out of school, or part-time, at freight forwarders, shipping lines, air cargo companies, and any commercial transportation position which will make you intimately familiar with the mass of documents that are employed in international transport of goods. if you are on a first-name basis with the manner in which maritima and aviation cargo transportation is conducted, you will be light-years away from your fellow compliance officers who are trying to puzzle their way through the paper trail of international commerce.

3. Optional, but invaluable, is previous actual field duty in the shipping industry, which will not only broaden your horizons, but give you a window into how such transport happens. No, I don't mean shipping out on a tramp steamer, but there are openings available that might open your eyes. We call that Getting your Hands Dirty. Don't rule out a post-college short hitch in the Navy or Air Force before law school. It has worked for a lot of us, so do not dismiss it out of hand.

Armed with this unique background, you are going to get hired before others with more pedestrian qualifications; good luck in the tough and unforgiving world of TBML AML/CFT.

EXPORTERS' RESPONSE TO RUSSIAN INTERFERENCE WITH BLACK SEA TRANSPORT OPENS THE DOOR TO NEW AVENUES FOR TRADE-BASED MONEY LAUNDERING

Compliance officers tasked with identifying and interdicting TBML need to understand that one of the principal goals of laundrymen engaged in that illicit activity is to be alert to any developments which might provide openings for not only new techniques, but new routes as well. They are constantly monitoring current events, searching for and seeking out new possibilities for moving criminal proceeds through international trade payments. Compliance officers must also be sensitive to any unfolding news which could create new potential TBML pipelines, or they will always find themselves several moves behind in this global chess game of cat and mouse.

Russian military actions taken to stop Ukraine's export of its agricultural products, through Black Sea shipping, have created unexpected markets in other nations for wheat and corn, principally Argentina and Brazil. Laundrymen have noticed that the grain importing countries in North Africa and the Middle East are now dealing with these South American sources, thereby requiring payments to flow west for these commodities, which means that cocaine traffickers seeking to repatriate the illicit profits they have made in the EU, due to Europe's love affair with the drug, can now hide those funds within payments made to those Latin American exporters.To be blunt, AML enforcement, particularly in the nations of North Africa, is spotty and subject to corruption, giving laundrymen a golden opportunity to move their clients' drug profits, earned in Europe, back to Colombia, Ecuador & Peru, or to tax haven bank accounts in the Western Hemisphere.

We trust that this example will give compliance officers working on TBML a window into how money launderers in that field think, create and operate. They are a force to be reckoned with. If you are not yet a voracious consumer of world news, especially business news, start reading.