Trade and Supply Chain Finance Program's (TSCFP) complements its core business operations with special initiatives to bridge the financing gap and to advance sustainability, climate, and social inclusion, as well as development impact objectives in trade and global supply chains. One key initiative is advancing the fight against money laundering and counter terrorist financing by working with partners and regulators to combat trade-related money laundering.

Transcript

Steven Beck: Hi there! And welcome to this episode of “The 3-Minute Brief,” which seeks to explain what ADB’s Trade and Supply Chain Finance Program is doing to make trade and supply chains GREEN, INCLUSIVE, TRANSPARENT, SOCIALLY RESPONSIBLE, and RESILIENT.  

Today, we are here to talk with Catherine Daza – Estrada about ADB’s efforts to counter Trade-Based Money Laundering. Thank you so much Catherine for joining, how are you? 

Catherine D. Estrada: Thank you Steven. I’m doing great.

Steven Beck: Catherine, what is Trade-Based Money Laundering? It sounds like a complicated concept, what is it?  

Catherine D. Estrada: Trade-Based Money Laundering is the laundering of proceeds from crimes, but compared to other types of money laundering, this uses trade transactions. So the transfer of value from those illicit proceeds is done via trade transactions.  

Steven Beck: So, it’s about people committing crimes and I guess earning money off of that illegal activity and then disguising the proceeds – the money that they earn from that illegal activity through a trade transaction in import and export, is that basically it? 

Catherine D. Estrada: Because the final goal of money launderers is to be able to wash that money clean and be able to integrate it to the system so they can use it as though as it’s just like any other legitimate money that they can use for any transactions they might want.  

Steven Beck: So, Catherine, you’re saying that Trade-Based Money Laundering is different from other types of money laundering because we don’t have enough data to really understand it, to track it, to identify it, and as a result to prosecute it, and so it’s something that we need to address, is that essentially it? 

Catherine D. Estrada: That is right and also, I’d like to add that the complex nature of trade which involves cross-border movement of value makes it even more complicated. 

Steven Beck: You’re leading a pilot with five different countries on Trade-Based Money Laundering, would you please tell us what is about that pilot? What are you guys aiming to do? 

Catherine D. Estrada: So, what we’re doing is that we are working on a pilot with Bangladesh, Mongolia, Nepal, Pakistan, and Sri Lanka. The idea is to collect data that will help us identify, track, and prosecute trade-based money laundering. The expected outcome from this project is improved quality and amount of data, which was not possible before, and that will enable the analysis and identification of laundering patterns. Another important outcome is improved cross-border information exchange among regulators and law enforcement. 

Steven Beck: So, Catherine, why is a multilateral development bank in this space?  

Catherine D. Estrada: Countering Trade-Based Money Laundering is critical to promoting trade transparency which builds TRUST, CONFIDENCE, and PREDICTABILITY in global supply chains. This results in reduced risk and cost leading to more resilient trade and supply chain systems, to deliver more economic growth and job creation, to help meet the Sustainable Development Goals.  

Steven Beck: Catherine, thank you so much for explaining the great work that you and the Trade and Supply Chain Finance Program are doing in this trade-based money laundering space. Very important stuff.  

And ladies and gentlemen, thank you for watching this latest episode of “The 3-Minute Brief.” 

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