ACAMS Trade-Based Money Laundering (TBML) 1 — Questions and Answers
Question 1: What is the primary definition of trade-based money laundering (TBML)?
- Using trade transactions to move value and disguise criminal proceeds (Correct answer)
- Importing goods without paying customs duties
- Using shell companies to conduct export business
- Moving cash across borders hidden in shipping containers
Correct answer: Using trade transactions to move value and disguise criminal proceeds
TBML involves manipulating trade transactions—through over/under-invoicing, multiple invoicing, or falsely described goods—to move value and legitimize illicit funds.
Question 2: Which TBML technique involves exporting goods and invoicing them at a price higher than the true market value?
- Under-invoicing
- Over-invoicing (Correct answer)
- Multiple invoicing
- Phantom shipment
Correct answer: Over-invoicing
Over-invoicing allows the exporter to receive more funds than the goods are worth, effectively transferring value from the importing country to the exporting country.
Question 3: A US bank notices a customer is receiving multiple payments from different overseas buyers for the same shipment of electronics. This is most indicative of which TBML red flag?
- Black market peso exchange
- Multiple invoicing (Correct answer)
- Phantom shipment
- Round-tripping
Correct answer: Multiple invoicing
Multiple invoicing involves issuing more than one invoice for a single shipment, enabling the seller to collect payment multiple times for the same goods.
Question 4: The Black Market Peso Exchange (BMPE) primarily originated from which illicit industry?
- Arms trafficking
- Human smuggling
- Drug trafficking (Correct answer)
- Cybercrime
Correct answer: Drug trafficking
BMPE originated as a method for Colombian drug traffickers to convert US dollar proceeds into Colombian pesos without moving currency across borders directly.
Question 5: Which international body has issued guidance specifically addressing TBML typologies and red flags?
- World Trade Organization (WTO)
- Financial Action Task Force (FATF) (Correct answer)
- International Monetary Fund (IMF)
- World Customs Organization (WCO) alone
Correct answer: Financial Action Task Force (FATF)
FATF issued a landmark report on TBML in 2006 and subsequent guidance identifying key typologies, red flags, and recommended controls.
Question 6: Which of the following is a key indicator of a phantom shipment in a TBML scheme?
- Goods are shipped but the invoice is slightly incorrect
- Payment is received but no corresponding goods movement is documented (Correct answer)
- Multiple buyers pay for the same invoice
- The price of goods is slightly above market rate
Correct answer: Payment is received but no corresponding goods movement is documented
In a phantom shipment, trade documents are fabricated and payment is exchanged, but no actual goods are shipped, making the absence of verifiable cargo movement a key red flag.
ACAMS Trade-Based Money Laundering (TBML) 1
What is the primary definition of trade-based money laundering (TBML)?