Trade-based money laundering (TBML) empowers criminals to run free post-Brexit
| DOI | https://doi.org/10.1108/JMLC-04-2021-0040 |
| Published date | 16 July 2021 |
| Date | 16 July 2021 |
| Pages | 376-387 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Mariola Jolanta Marzouk |
Trade-based money laundering
(TBML) empowers criminals to
run free post-Brexit
Mariola Jolanta Marzouk
Department of Criminal Justice, University of Portsmouth, Portsmouth, UK
Abstract
Purpose –This paper aims to provide unique empirical findings exploring the impact of the UK’s post-
Brexit Economic Strategy to boost trade with developing countries on the UK banking sector’s ability to
manage trade-basedmoney laundering risks.
Design/methodology/approach –Exploratory research design that used structured literature review,
followedby semi-structured interviews with key subjectmatter experts employed by large UK banks.
Findings –Both banks and law enforcement struggle to prioritisetrade-based money laundering (TBML)
intelligence discovery due to deficient skills, resources, technology and lack of strong regulatory stimulus.
The regulated sector calls for the UK anti-money laundering (AML) reform that would better incentivise
TBML deterrence, yet the Government underestimates the money laundering risks while tradingwith high-
risk jurisdictionspost-Brexit.
Research limitations/implications –The findings are based on a smallsample of six semi-structured
interviews with difficult to access population of key subject matter experts. Despite the small sample,
participantsprovided well-articulated and informedinsights.
Practical implications –The UK’s post-Brexit Economic Strategy to boost trade with developing
countries downplaysthe TBML risks it carries. The findings should alert UK banks, law enforcementand the
Government who willcollectively bear the responsibility to effectively manageTBML while enabling smooth
trading.
Originality/value –The research provides uniqueperceptions of UK banks’senior subject matter experts
on managingTBML threats from opportunistic criminals.
Keywords Compliance, Organized crime, Brexit, Proceeds of crime, TBML,
Trade-based money laundering
Paper type Research paper
Introduction
Trade-based money laundering (TBML) is used to move illicit value through trade
transactions. Global Financial Integrity (2017) estimates that approximately 87% of illicit
financial flows from developing countries, between 2005 and 2014, were accomplished
through this method. Despite the prevalence of the threat, trading with that blockforms an
important part of the UK Government’sEconomic Recovery Strategy post-Brexit.
Transparency International(2017) confirms that the UK will face new corruption risk by
increasing trade with developing countries. Lord Ricketts, a former national security
adviser, stresses further that the Britons’safety will worsen with the loss of access to
many vital European crime databases (Sabbagh, 2020). Even organized crime rings admit
that the reshaped UK trade landscape creates opportunistic conditions for their illicit cross
border activities(Marinetto, 2018).
The HM Treasury and Home Office (2017) shares the concerns by calling TBML the
greatest area of risk to the UK economy due to the vast sums of criminal funds passing
JMLC
25,2
376
Journalof Money Laundering
Control
Vol.25 No. 2, 2022
pp. 376-387
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-04-2021-0040
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