Understanding Trade-Based Money Laundering

What is trade-based money laundering (TBML)?

• Laundering money through online transactions

• Concealing illicit funds by manipulating trade transactions

• Using cash to purchase high-value items

• None of the above

Which of the following is a common technique used in TBML?

• Over-invoicing

• Structuring

• Smurfing

• Wire transfers

What is over-invoicing?

• Declaring a lower value for goods to reduce tax

• Increasing the value of goods to justify larger payments

• Paying for goods in cash

• Delaying the shipment of goods

Which of the following is NOT a red flag indicating potential TBML?

• Unusual payment terms

• Frequent changes in trade routes

• Consistent pricing with market rates

• Transactions involving high-risk jurisdictions

What role do shell companies play in TBML?

• They simplify trade processes

• They provide legitimate business references

• They obscure the true ownership of the transaction

• They reduce transaction fees

Which document is essential for verifying the legitimacy of a trade transaction?

• Bill of lading

• Email correspondence

• Internal memos

• Social media posts

What is the main purpose of due diligence in TBML prevention?

• To expedite transaction processing

• To ensure compliance with tax regulations

• To assess and mitigate the risk of illegal activities

• To enhance customer service

Which regulatory body oversees AML practices in Dubai?

• Dubai Economic Department

• Central Bank of the UAE

• Dubai Chamber of Commerce

• Ministry of Finance

A client frequently imports goods without any clear business purpose. What should this raise?

• No concern, as it's a common practice

• A red flag for potential TBML

• An indication of a successful business

• A reason to offer more services

What is the significance of understanding the supply chain in TBML?

• It helps in determining shipping costs

• It allows for better marketing strategies

• It helps identify inconsistencies in trade transactions

• It is irrelevant to AML efforts