Trade-Based Money Laundering (TBML) Flashcards
6 cards from real ACAMS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Trade-Based Money Laundering (TBML) flashcards as text
Which TBML red flag relates to a significant discrepancy between the type of business and the goods being traded?
Answer: Commodity inconsistency
Commodity inconsistency—where a business trades in goods unrelated to its stated business purpose—is a key TBML red flag because it suggests the trade is structured to move funds rather than for genuine commerce.
How does trade-based money laundering differ from traditional money laundering placement?
Answer: TBML uses goods and trade transactions instead of direct cash deposits to introduce illicit value into the financial system
Unlike cash-based placement, TBML uses the complexity of international trade and the movement of goods to obscure illicit value, bypassing traditional cash monitoring controls.
A compliance officer at a US bank finds that a trade client is conducting frequent low-value shipments that collectively equal large totals with no clear business rationale. This pattern most likely suggests:
Answer: Structuring through trade transactions
Breaking large trade transactions into multiple smaller ones to avoid detection thresholds is a form of structuring applied to TBML schemes.
Which organization jointly published the 2012 'Best Practices Paper on Trade-Based Money Laundering' with FATF?
Answer: Asia/Pacific Group on Money Laundering (APG)
FATF and the APG jointly published the 2012 best practices paper on TBML, reflecting the significance of the Asia-Pacific region in global trade flows.
When reviewing trade finance for TBML risk, which factor is least relevant?
Answer: The creditworthiness of the exporter for the goods traded
While creditworthiness matters for credit risk, TBML detection focuses on price accuracy, geographic risk, commodity appropriateness, and counterparty risk rather than the exporter's creditworthiness.
What is the recommended first step for a bank's trade finance unit when a TBML red flag is identified?
Answer: Conduct enhanced due diligence and escalate to the AML compliance team for review
Upon identifying a TBML red flag, the appropriate response is to conduct enhanced due diligence, gather additional information, and escalate to AML compliance before deciding on any account action or SAR filing.