Indicators of trade based financial crime, or "Red Flags, are patterns of behavior that have been associated with financial crime so regularly as to justify a suspicion that its presence is not a coincidence but an element or aspect of the crime itself.
The source of the Indicators of trade based financial crime is the experience of practitioners and of others engaged in combating this phenomenon.
They have drawn on their real life experiences to identify behaviour that has typically accompanied types of financial crime and generalized these experiences. The great value of such Indicators is that they provide specific instances of behaviour which are concrete and not abstract, enabling their ready grasp.
Because the origin of the Indicators is experiential, what constitutes an Indicator depends on the experience and perspective of the person doing the classification.
Moreover, there is no rigorous definition of a particular indictor and, so, there can be an overlap between various indicators, or red flags.
The Red Flags
1. Unusual Transaction
2. Significant Deviations in Business Patterns
4. Apparent Front or Shell Company in Transaction
5. Geographical or Jurisdictional Concerns
6. Transactions in High Risk or High Value Goods
7. Problematic Parties
8. Dual Use Goods
9. Apparent Inconsistencies in Proposed Transaction
10. Trade Structure Concerns
11. Letter of Credit Related Concerns
12. Suspicious Actions
Trade Based Financial Crime Compliance Resources
The Association of Trade Finance Compliance Professionals offers a gateway into the world of resources, events, trainings and conversations relating to TBFCC. Learn more
Special conferences dedicated to this intersection of trade, crime, and compliance. Experts from across the finance, legal, enforcement, and consulting worlds unite. Learn more
The Certificate in Trade Finance Compliance (CTFC) provides the most comprehensive knowledge set and credential available to this field. Set yourself apart from the field. Learn more
In addition to the definitive trade based financial crime compliance book, certificate program, and professional association, there are a number of no-cost resources relating to identifying red flags, and the broader topic of trade based financial crime compliance.