ACAMS Trade-Based Money Laundering (TBML) 2 — Questions and Answers
Question 1: Which document is most commonly manipulated in a TBML scheme?
- Certificate of origin
- Commercial invoice (Correct answer)
- Bill of lading
- Letter of credit
Correct answer: Commercial invoice
The commercial invoice is the most commonly manipulated document in TBML because it states the price and description of goods, making it central to over/under-invoicing schemes.
Question 2: Under-invoicing in a TBML scheme primarily benefits which party?
- The exporter
- The importer (Correct answer)
- The freight forwarder
- The customs agent
Correct answer: The importer
Under-invoicing benefits the importer, who pays less than market value, receiving excess value in the form of goods while transferring the value difference to the exporting country.
Question 3: A compliance officer reviewing trade finance should be most concerned when the price of exported goods is compared to what?
- The buyer's credit score
- International commodity prices or trade databases (Correct answer)
- The freight cost of the shipment
- The exporter's annual revenue
Correct answer: International commodity prices or trade databases
Comparing invoice prices against international commodity databases or trade pricing benchmarks helps detect over/under-invoicing indicative of TBML.
Question 4: Which financial product is most frequently exploited in TBML schemes due to its document-based nature?
- Wire transfers
- Letters of credit (Correct answer)
- Certificates of deposit
- Prepaid cards
Correct answer: Letters of credit
Letters of credit are document-based instruments where banks rely on presented paperwork rather than physical inspection, making them vulnerable to TBML through falsified trade documents.
Question 5: Which US agency publishes advisories and red flag indicators specifically related to TBML for financial institutions?
- Securities and Exchange Commission (SEC)
- Financial Crimes Enforcement Network (FinCEN) (Correct answer)
- Office of the Comptroller of the Currency (OCC)
- Federal Reserve Board
Correct answer: Financial Crimes Enforcement Network (FinCEN)
FinCEN issues advisories and guidance to US financial institutions on TBML red flags, typologies, and regulatory expectations.
Question 6: What is 'round-tripping' in the context of TBML?
- Shipping goods from a country and returning them to the same country as different goods
- Sending funds overseas and repatriating them as foreign investment or trade proceeds (Correct answer)
- A customs process for inspecting returned goods
- Issuing multiple invoices for one shipment
Correct answer: Sending funds overseas and repatriating them as foreign investment or trade proceeds
Round-tripping involves moving money out of a country and bringing it back disguised as legitimate foreign investment or export proceeds to give illicit funds a lawful appearance.
ACAMS Trade-Based Money Laundering (TBML) 2
Which document is most commonly manipulated in a TBML scheme?