23rd Parliamentary Intelligence-Security Forum – Trade-Based Money Laundering

Dr. Emanuele Ottolenghi commenced by expressing gratitude to Congressman Pittinger and Senator Cassidy, while acknowledging John Cassara as a mentor in the field of trade-based money laundering (TBML). He provided a comprehensive overview of TBML, elucidating it as the movement of value from one location to another, utilizing merchandise. This merchandise encompasses a diverse range of items, including electronics, counterfeit goods, luxury watches, and vehicles. To illustrate the concept, Dr. Ottolenghi recounted the case of “John Doe,” a small-town contractor who converts undeclared cash into items such as Rolex watches and subsequently sells them to reintegrate the money into the financial system. He emphasized that when scaled up, this mechanism facilitates cartels and organized crime networks in laundering millions of dollars, funding weapons purchases, and supporting illicit activities on a global scale. TBML relies on fraudulent documentation, under- or over-invoicing, tax evasion, and the complicity of service providers, including accountants, notaries, and lawyers, often accompanied by corruption. Dr. Ottolenghi highlighted the challenges in combating TBML due to its ability to involve any product, transaction, and occur across global trade networks without disrupting legitimate commerce. He provided examples in Latin America’s Tri-Border Area, where electronics were utilized, and how the COVID-19 pandemic shifted laundering to personal protective equipment (PPE) and face masks, demonstrating the adaptability of criminals to any type of merchandise for the movement of illicit value.