UNODC ROSAF Hosts a Workshop for law enforcement and prosecutorial authorities from South Africa on Combating Trade-Based Money Laundering

Pretoria, 23-26 July 2024 – In partnership with the Government of the Republic of South Africa, the United Nations Office on Drugs and Crime (UNODC), Regional Office for Southern Africa (ROSAF), under its Global Programme Against Money Laundering, Proceeds of Crime, and the Financing of Terrorism (GPML), convened a four-day in-person workshop entitled “Combating Trade-based Money Laundering”.

This workshop aimed to raise awareness of the public security threats stemming from Trade-Based Money Laundering (TBML) and to strengthen the capacities of law enforcement and prosecutorial authorities to detect, investigate and prosecute money laundering through trade more effectively.

The workshop counted on the participation of 23 Pretoria-based officials from the South African Police Service (SAPS), Border Management Authority (BMA), State Security Agency (SSA), South African Revenue Service (SARS), Financial Intelligence Centre (FIC), National Prosecuting Authority (NPA), and the South African Anti-Money Laundering Integrated Taskforce (SAMLIT).

The workshop forms part of the broader UNODC GPML training programme on TBML (2023-2025) and was made possible by the Bureau of International Narcotics and Law Enforcement Affairs of the United States Department of State (INL).

Money laundering remains a significant global challenge. Even as certain deficiencies and loopholes, such as inadequate regulations for virtual assets and cryptocurrencies, and the weak integration of Non-Financial Businesses and Professions (NFBPs) into AML/CFT frameworks, are addressed and remedied, new challenges continue to arise.

<span style="color: #c0c0c0;">Participants from the South African Police Service (SAPS), Border Management Authority (BMA), State Security Agency (SSA), South African Revenue Service (SARS), Financial Intelligence Centre (FIC), National Prosecuting Authority (NPA), and the South African Anti-Money Laundering Integrated Taskforce (SAMLIT).</span>

Participants from the South African Police Service (SAPS), Border Management Authority (BMA), State Security Agency (SSA), South African Revenue Service (SARS), Financial Intelligence Centre (FIC), National Prosecuting Authority (NPA), and the South African Anti-Money Laundering Integrated Taskforce (SAMLIT).

TBML is a widespread and sophisticated, albeit largely unnoticed money laundering method. The ever-growing volumes of global trade are a tempting environment for transnational organized crime groups (OCGs), professional money launderers (PMLs) and terrorist financing (TF) networks. To benefit from and sustain their criminal business, OCGs, for instance, launder the proceeds generated from their criminal activities by blending their illicit undertakings and shipments into larger, legitimate trade and financial systems. Despite changes to global trading patterns and new emerging markets, TBML methods such as under- or over-invoicing of goods, under- or over valuation of goods, and/or phantom shipments, where no goods move at all, continue to prove highly effective for this purpose. The higher the trade volumes, the greater the challenge of detecting and investigating illicit shipments and money flows by law enforcement and criminal justice authorities.

In South Africa, money laundering continues to present significant challenges. According to estimates, between USD 3.5 and 5 billion in illicit financial flows (meaning, cross-border flows that are illegal in their origin, transfer or use) leave the country each year, representing approximately 1-1.5% of South African Gross Domestic Product (GDP).[1] Amongst other things, this undermines domestic resource mobilization efforts, which in turn threatens the realization of the 2030 Sustainable Development Goals (SDGs).

Despite the pervasiveness of TBML, the focus has traditionally been on other money laundering typologies, such as those that make use of the financial system and those that involve the physical movement of money. This has left a critical gap which the UNODC GPML training programme on TBML (2023-2025) seeks to bridge.

The "Combatting Trade-Based Money Laundering" workshop offered an in-depth exploration of the complexities surrounding TBML through a series of targeted sessions designed to equip participants with practical knowledge and skills. The agenda included comprehensive sessions on how TBML operates, the intricacies of shipping documentation, and the role of trade facilitators, each providing real-world examples and complex case studies to solidify understanding.

Participants engaged in scenario-based exercises throughout the workshop, applying their learning to identify and mitigate TBML risks effectively. These exercises, coupled with sessions on information sharing and cooperation at both national and international levels, emphasized the importance of collaboration in combatting TBML. The workshop also highlighted the significance of understanding beneficial ownership structures and the various examples of trade abuse that can occur, providing attendees with the tools needed to tackle these challenges.

A central emphasis of the workshop was on fostering inter-agency collaboration and sharpening participants' skills in navigating the complexities of international trade. By thoroughly exploring these areas, the workshop aimed to empower attendees to implement robust and effective measures against TBML in their respective fields. As one participant remarked, “It has been a lot of information, but everyone has walked away with much more than they thought they knew. Thank you for imparting your knowledge, it has been very valuable.” This remark underscores the workshop's success in deepening understanding and transforming the way participants approach critical aspects of their work, ensuring a more vigilant and informed stance in combatting TBML.

United Nations

UNODC Regional Office for Southern Africa

UNODC ROSAF Hosts a Workshop for law enforcement and prosecutorial authorities from South Africa on Combating Trade-Based Money Laundering

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