GlossaryEN1 min readUpdated: Jun 26, 2026

Trade-Based Money Laundering

Trade-Based Money Laundering (TBML) is a method by which criminal proceeds are concealed through the manipulation of legitimate international trade transactions.

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Last updated: 26 June 2026Published: 27 January 2026

Source: https://www.fatf-gafi.org/en/topics/trade-based-money-laundering.html

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Definition & Explanation

Trade-Based Money Laundering (TBML) is a method by which criminal proceeds are concealed through the manipulation of legitimate international trade transactions. Common techniques include systematic over- or under-invoicing, misrepresentation of goods and quantities, and fictitious transactions – all designed to transfer value across borders outside conventional financial channels. TBML is exceptionally difficult to detect because it operates within real commercial activity: the invoice, bill of lading, and customs declaration appear complete and consistent on the surface. The Financial Action Task Force (FATF) identifies TBML alongside cash smuggling and informal value transfer systems such as hawala as one of the three primary money laundering methods globally. For freight forwarders, customs brokers, and compliance officers, this creates concrete due-diligence obligations: significant price deviations from market benchmarks, unusual trade routes, or contradictory documentation must be flagged under anti-money laundering (AML) frameworks.

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Trade-Based Money Laundering

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Related Terms

sham transaction

customs duty assessment base

Ethical Trade

Commodity Classification Systems in Logistics

Harmonized Tariff Schedule (HTS)

Trade Finance Compliance Tools

Passar Hub: Everything on the new Swiss customs system

Logistics knowledge straight to your inbox

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