Executive Summary

Purpose –Trade-based money laundering (TBML) has been a significant and rising threat in Ghana, resulting in billions of dollars in lost government revenue, foreign currencies, and contributing to economic challenges like a pressured currency and inflation. This illicit activity exploited weaknesses in oversight by banking institutions and the Ghana Revenue Authority (GRA) Customs Division. Trade-based money laundering (TBML) has become a significant challenge in the country today. The negative effects of TBML had been far-reaching, including lost tax revenue for public services, erosion of foreign exchange reserves, increased pressure on the Ghanaian cedi (currency), and a higher cost of living due to inflation. Trade-based money laundering (TBML) is a type of ML that poses a hazard to any country. In recent years, developed and developing countries have pursued liberal policies for international financial markets. The Financial Action Task Force (FATF) defines TBML as the process of concealing criminal earnings and shifting value through trade transactions in an attempt to justify their illicit origins. As international financial markets have improved money laundering controls, criminals have turned to the trade sector as a new venue, raising trade risks. The purpose of this study is to critically review the roles of the Ghanaian banks and the Ghana Revenue Authority (Customs Division) as the primary gatekeepers in the fight against trade-based money laundering in the country.

Design/methodology/approach – A review of publicly available reports, case studies, secondary data, and literature on TBML from a variety of Ghanaian and international contexts comprised the methodology. However, due to the dearth of literature on TBML details/information in the Ghanaian context, international case studies have been analyzed. More critically, there are no precise estimates of TBML or defined protocols for collecting and maintaining TBML data. As a result, the FATF potential TMBL typologies were analyzed, and typical TBML procedures were examined to identify the causes of the phenomenon of Trade-Based-Money Laundering (TBML) in Ghana.

Findings – The findings revealed that both Ghanaian banks and the Ghana Revenue Authority (Customs Division) had all failed woefully as the primary gatekeepers in the trade-based money laundering space due to inadequate technology, corruption, insufficient resource allocation, limited experience in international trade, corruption and weak internal controls, and poor risk governance. The study also showed that poor and weak regulatory oversight by the Bank of Ghana and the Financial Intelligence Centre had contributed significantly to the rise of money laundering (TBML) by creating vulnerabilities and loopholes within the financial system that criminals can exploit.

The study further revealed that the rising trade-based money laundering (TBML) in Ghana over the past decade could be attributed to the abolition of the five destination inspection companies since September 2015. Weaknesses in Ghana's financial and trade ecosystem, including inadequate technology, fragmented data across agencies, limited expertise in TBML, and inconsistent enforcement, have all contributed to the rising trade-based money laundering over the past decade.

Research limitations/implications – Due to the complexity of financial crimes, this study had a number of limitations, as do many others. The data used for this study was sourced from publicly available information, and the TBML has been clearly defined or understood due to the fact that the complexity of the methods used by criminals. As a result, the number of local instances reported on TMBL is quite small; hence, this study relied on international case studies.

Originality/value – This research on the roles of banks and the Customs Division of Ghana Revenue Authority as primary gatekeepers in the fight against TBML in Ghana is original. It is anticipated that the findings and contributions of the study would help the Government, Ghanaian banks, Ghana Revenue Authority (Customs Division), Bank of Ghana, and Financial Intelligence Center develop TBML prevention measures.

1.0 Introduction/Background

International trade is a vital component of any modern economy. Exporting around the world can provide a vehicle for job creation and economic growth, and imports can often provide access to goods and services at a lower cost than producing domestically. International trade involves a range of risks for the parties involved, which leads to uncertainty over the timing of payments between the exporter and importer. This creates tension along the supply chain, which can have negative consequences for both the importer and exporter. Trade processes and financing have adapted to address this tension, while still supporting the growth of the global marketplace. International trade is an attractive avenue for the movement of the proceeds of crime and presents different risks and vulnerabilities that are exploited by criminals and other complicit parties. Characteristics that make trade attractive for money laundering include:

• The significant volume of trade flows that occur around the world every day. This environment enables criminals to obscure their transactions and decrease the risk of detection.

• The complexities involved in trade finance products and import/export processes. These complexities assist in preventing the detection of this crime type, as does the comingling of legitimate and illegitimate funds within trade activity.

• Related financial transactions are commonly fragmented, making it challenging for reporting entities to use transaction monitoring processes as they are unlikely to have oversight of the whole transaction chain.

• The multiple supply chains, processes, parties, transactions, and jurisdictions involved in the trade process, as well as the speed of transactions, create additional challenges in detecting trade-based money laundering (AUSTRAC’s & Fintel Alliance Partners,2022). 

The Financial Action Task Force (FATF) is a 40-member body that sets international standards to ensure national authorities and certain types of private sector firms can effectively pursue illicit funds derived from criminal activities.  It defines trade-based money laundering (TBML) as “the process of disguising the proceeds of crime and moving value through the use of trade transactions in an attempt to legitimize their illicit origins”.

The Financial Action Task Force ( 2004/2012), the global money laundering and terrorist finance watchdog, defines TBML as “the process of disguising the proceeds of crime and moving value using cross-border trade transactions in an attempt to legitimize their illicit origins. International trade is prone to trade-based money laundering (TBML) primarily due to its immense volume, complexity, and inherent vulnerabilities like fragmented oversight and reliance on paper-based documentation.  Trade-based money laundering (TBML) is increasingly being viewed as one of the world’s most prevalent, damaging, and challenging forms of illicit financing in the global economic system. Criminals exploit these systemic weaknesses to disguise the origins of illicit funds and integrate them into the legitimate financial system.

The global trade system involves trillions of dollars in transactions daily, allowing illicit transactions to "hide in plain sight" among the legitimate flow of goods. International trade often spans multiple countries, parties (importers, exporters, freight forwarders, banks), and regulatory frameworks, making it difficult to track funds and spot anomalies across the entire supply chain.

There is often a disconnect between the physical movement of goods and the financial transactions financing them. Customs authorities focus on tariffs and contraband, while financial institutions monitor payments but rarely verify the physical goods, creating gaps in oversight. The industry's reliance on various paper-based documents (invoices, bills of lading, etc.) makes it difficult to automate monitoring, verify authenticity, and conduct timely due diligence, providing opportunities for falsification.

Trade-based money laundering (TBML) has emerged as one of the toughest challenges in the global financial landscape. Unlike traditional money laundering, which typically involves layering and integrating dirty money through banks, TBML cleverly uses international trade transactions to hide, disguise, or move the proceeds of crime across borders.  

International trade is vulnerable to Trade-Based Money Laundering (TBML) due to its high volume, complex multi-party supply chains, and the commingling of legitimate and illicit transactions. Criminals exploit the complexity of international trade, including issues with data access, different regulatory frameworks, and the use of offshore entities, to disguise the origin of illegal funds and move them globally.

These schemes take advantage of the intricate, high-volume, and cross-border nature of global trade, making it tough to spot illicit activities. Financial institutions and regulatory agencies, including customs authorities around the world, struggle to detect these schemes, as they often involve tampering with legitimate trade documents and manipulating the invoicing of goods and services.

The very nature of these trade-based transactions makes it even harder to pinpoint the illegal activities, blending them seamlessly with genuine trade and creating a significant hurdle for anti-money laundering (AML) efforts. As such, there are five primary methods of payment for international transactions, summarized: advance payment, letter of credits, documentary collection, open account trade, and consignment sales.

Preferred for importers, while exporters are least preferable for consignment sales, open account trade, documentary collection, letters of credit, and advance payment. According to Financial Action Task Force (FATF ,2020) noted that open account and documentary collections had been the most prominent in their TBML while the Wolfsberg Group (2017) notes approximately 80% of international trade processed by financial institutions handle open account trading in trade -based money laundering. However, just because this overview does not reference other types of trade finance, this does not mean they aren’t exploited in TBML schemes.

Trade-based money laundering is an increasingly sophisticated and damaging form of financial crime that disguises illicit funds through international trade transactions. The complexity of cross-border trade documentation, ranging from letters of credit and invoices to packing lists and custom declarations, creates a fertile ground for criminal exploitation. Nevertheless, as a method for systematically disguising the proceeds of crime, an importer routinely paying cash in advance is likely to arouse the suspicion of authorities or financial institutions.  International trade is a powerful tool to advance development and reduce poverty.

The international trade system is subject to a wide range of risks and vulnerabilities, which provide criminal organizations with the opportunity to launder the proceeds of crime and provide funding to terrorist organizations, with a relatively low risk of detection. The relative attractiveness of the international trade system is associated with:

• The enormous volume of trade flows obscures individual transactions and provides abundant opportunity for criminal organizations to transfer value across borders.
• The complexity associated with (often multiple) foreign exchange transactions and recourse to diverse financing arrangements;
• The additional complexity that can arise from the practice of commingling illicit funds with the cash flows of legitimate businesses.
• The limited recourse to verification procedures or programs to exchange customs data between countries, and
• The limited resources that most customs agencies have available to detect illegal trade transactions (FATF, 2006).

The international trade system is clearly subject to a wide range of risks and vulnerabilities that can be exploited by criminal organizations and terrorist financiers. There are three main methods by which criminal organizations and terrorist financiers move money for the purpose of disguising its origins and integrating it into the formal economy. The first is through the use of the financial system; the second involves the physical movement of money (e.g., through the use of cash couriers); and the third is through the physical movement of goods through the trade system.

Trade-Based Money Laundering (TBML) is the use of legitimate international trade to disguise illicit funds, which is an increasingly sophisticated and damaging form of financial crime. It involves manipulating trade transactions by falsifying the price, quantity, or quality of goods to obscure the origin of the money. This technique makes it difficult to detect because it blends illicit funds with legitimate commercial flows, and its complexity is growing as traditional money laundering methods become harder to use.

In part, these arise from the enormous volume of trade flows, which obscures individual transactions; the complexities associated with the use of multiple foreign exchange transactions and diverse trade financing arrangements; the commingling of legitimate and illicit funds; and the limited resources that most customs agencies have available to detect suspicious trade transactions.  Trade-based money laundering (TBML) is one of the most complex and elusive financial crimes, as sophisticated supply chains and increasing globalization create fertile ground for illicit transactions. Understanding how TBML works and leveraging advanced technology to prevent it are crucial to protecting institutions from financial, regulatory, and reputational risks.

Criminal organizations manipulate legitimate trade through mis-pricing goods, moving empty containers, forging bills of lading, or recycling invoices-to disguise illicit funds and obscure their origins. Because TBML schemes span multiple jurisdictions and involve layers of actors, documents, and transactions, traditional rule-based monitoring and manual investigative methods often fail to detect them. Trade-based money laundering (TBML) has emerged as one of the toughest challenges in the global financial landscape.

Unlike traditional money laundering, which typically involves layering and integrating dirty money through banks, TBML cleverly uses international trade transactions to hide, disguise, or move the proceeds of crime across borders. These schemes take advantage of the intricate, high-volume, and cross-border nature of global trade, making it tough to spot illicit activities. Financial institutions and regulatory agencies around the world struggle to detect these schemes, as they often involve tampering with legitimate trade documents and manipulating the invoicing of goods and services.

The very nature of these trade-based transactions makes it even harder to pinpoint the illegal activities, blending them seamlessly with genuine trade and creating a significant hurdle for anti-money laundering (AML) efforts. Letters of Credit (LCs), Stand-by letters of Credit, and Bank Guarantees (BGs) are essential tools in international trade, acting as secure payment methods between buyers and sellers across borders (Pankaj & Jain,2025). At the same time, trade is attractive for money laundering because of the complexity and volume of international trade and trade financing instruments, which can be used to hide the origin of individual transactions and make trade-based money laundering (TBML) challenging to identify and prevent.

In many countries, though, international trade also contributes significantly to government revenues. Taxes on imports have historically been an important revenue source for many countries around the world; however, in line with a consensus that import taxes are harmful to economic growth, reliance on them has declined over time (Besley and Persson, 2013). However, taxes on imports remain important in many low- and middle-income countries (LMICs), where a lack of administrative capacity and information on domestic transactions presents a challenge to domestic enforcement (Lee and Gordon, 2005; Besley and Persson, 2014).

The international trade finance process makes it possible and easier for exporters and importers to transact business through international trade. Moreover, it facilitates the introduction of third parties to transactions to eliminate payment- and supply-related risks. The phrase, trade finance, is also used to refer to financial instruments and products utilized by companies to facilitate international trade and commerce. Undoubtedly, trade finance accounts for the enormous growth in international trade activities and values over the years.

Illicit financial flow remains a major threat to both international trade and the global financial systems; perpetrators of these criminal activities employ adept tactics and strategies towards achieving their objectives. International trade is prone to money laundering due to its complexity, high volume, and inherent vulnerabilities that obscure the origin and movement of illicit funds.  

Criminals exploit the layers of legitimate trade activities by falsifying documents, manipulating prices, and moving goods across multiple jurisdictions. The decentralized nature of trade makes it difficult for financial institutions, customs authorities, and other regulators to have a complete, transparent view of transactions. To illustrate, available statistics from the United States Customs and Border Protection (as cited in Napier, 2023) affirmed that on a typical day in 2019, about 79,000 containers and US$7.3 billion worth of goods entered the United States of America through various ports.

Given the dynamic nature of international trade, including the diversity of tradable goods and services, the involvement of multiple parties, and the speed of trade transactions, TBML remains a profound and significant risk. For context, the WTO Statistical Review of 2019 notes the volume of the global trade in world merchandise (i.e., goods) trade grew by 3% in 2018, while the value of that trade increased by 10% to USD19.67 trillion, driven, in part, by a significant growth of fuels and mining products, at 23%. This growth may resonate with several respondents, noting the exploitation of fuels and mining products in TBML schemes.

The report also noted that world exports of merchandise trade increased 20% in value over this period (FATF – Egmont Group, 2020). The scale of trade-based money laundering (TBML) points to a serious problem. The think tank Global Financial Integrity estimates the gap between developing and advanced economies' export and import “value gap” declarations at $8.7 trillion for 2008–2017.  

The “global value gap” reflects the unexplained difference between officially reported import and export flows involving countries that trade together and serves as a good proxy to measure potential trade-based money laundering (Asian Development Bank no 312/2024). The World Economic Forum estimates that the economic and tax losses from trade-based money laundering in developing countries alone exceeded US$9 trillion between 2008 and 2017. Trade mis-invoicing, as defined by Forstater (2018), is the customs and/or tax fraud involving exporters and importers deliberately misreporting the value, quantity, or nature of goods or services in a commercial transaction. Baker, Clough, Kar, LeBlanc, and Simmons (2014) identify four basic categories of trade mis-invoicing: import under-invoicing, import over-invoicing, export under-invoicing, and export over-invoicing.

Key typologies of trade-based money laundering (TBML) in Ghana involve hiding illicit money in ordinary trade transactions through methods such as phantom shipments, under- and over-invoicing, and the use of falsified invoices and documentation. Recent reports have highlighted vulnerabilities within key institutions like the Ghana Revenue Authority's (GRA) Customs Division and commercial banks that enable these activities. Ghana has experienced trade mis-invoicing in each of the four categories, with the highest levels being in export under-invoicing and import under-invoicing (Baker et al., 2014). Under-valued exports are interpreted as evidence of illicit outflow of financial capital from the exporting country (Hong & Pak, 2017).

On the other hand, overvalued exports are interpreted as evidence of illicit financial inflows whereby financial capital enters the country exporting through the trade channel. Inward IFFs comprise the sum of import under-invoicing values and export over-invoicing values, while outward IFFs comprise import over-invoicing and export under-invoicing.  A report released by the Global Financial Integrity (GFI,2015) estimated the IFF losses due to trade mis-invoicing in Ghana for both imports and exports as $3.2 billion in 2015 (GFI, 2019). GFI (2019) further if Ghana lost $758 million in import over-invoicing, $722 million to import under-invoicing, $117 million to export over-invoicing, $1.6 billion to export under-invoicing.

In total, the report estimated the IFF inflows by trade mispricing to be 837 million dollars and outflows US$2.38 billion. These data had validated the prolonged nature of trade-based money laundering that had existed in the country. The recent Phantom Shipment of US$42 billion clearly showed that both Ghanaian banks and GRA (Customs Division) had failed woefully as primary gatekeepers in the trade-based money laundering space due to insufficient training, the constantly evolving and sophisticated nature of financial crimes, and a focus on balancing risk versus profit, which sometimes led to a lack of enforcement.

Furthermore, Ghanaian banks and GRA (Customs Division) had all failed as the primary gatekeepers in the fight against trade-based money laundering due to inadequate technology, insufficient resource allocation, weak internal controls, corruption, and poor risk governance. Poor regulatory oversight by the Bank of Ghana and the Financial Intelligence Centre has significantly contributed to the rise of money laundering (ML) and terrorist financing (CFT), thereby creating vulnerabilities and loopholes within the financial system that criminals have exploited.  Weak oversight meant banking institutions had implemented inadequate or ineffective anti-money laundering and counter-terrorist financing (AML/CFT) controls, such as poor customer identification procedures and weak transaction monitoring systems.

Poor regulatory oversight is highly correlated with weak internal governance arrangements within some Ghanaian banks, including a lack of clear accountability and high staff turnover in key compliance functions, which further compromises risk management. Trade-based money laundering has emerged as the new front in Ghana’s fight against illicit finance, as regulators warn that criminal networks are exploiting trade and banking systems to move billions of dollars across borders undetected.

The country’s problem scale has been staggering. Recent data reviewed by Business & Financial Times showed that between April 2020 and August 2025, commercial banks in Ghana alone facilitated about US$20billion of foreign transfers without corresponding imports (phantom shipment). The transactions, representing roughly GH¢31billion, were made through import declaration forms that failed to meet documentation thresholds set by the Bank of Ghana. Some financial analysts have said that several banks processed multiple transfers for the same clients despite red flags, suggesting weak compliance oversight.

Less than two percent of all transfers during the five years were matched with actual imports, resulting in about GH¢22.6billion of estimated revenue losses from unpaid duties and taxes (Amalanu, BFt /06/11/2025). Ghana made significant revenue loss from 2020 to 2025; commercial banks in Ghana processed about $20 billion in foreign transfers without corresponding import documentation. This has resulted in an estimated revenue loss of over GH¢22.6 billion from unpaid duties and taxes. His Excellency President John Mahama on the 10/9/2025 recently made a statement that phantom shipment estimated to have cost  US$42 billion that happened in the country’s international trade space as Ghanaian banks and GRA (Custom Division) woefully failed as primary gatekeepers in the ML/CFT space due to insufficient training, the constantly evolving and sophisticated nature of financial crimes, and a focus on balancing risk versus profit, which sometimes led to a lack of enforcement.

The Finance Minister, Hon Dr Ato Forson, in the Budget Statement on 13^th November 2025, announced an extensive abuse within Ghana’s Import Declaration System, resulting in billions of US$ being illicitly moved abroad under the guise of legitimate trade. He further disclosed that between April 2020 and August 2025, over 525,000 transactions totaling US$83 billion were processed through the Import Declaration Form platform, and shockingly, only 10444 transactions totaling US$52 billion were linked to actual imports, meaning that US$31 billion left the country with no corresponding goods. All the above three empirical evidence have validated the rising trade-based money laundering (TBML) in Ghana.

Both banks and the Ghana Revenue Authority (Custom Division) had woefully failed as the primary gatekeepers in the Money Laundering (AML) and Counter-Financing of Terrorism (CFT) space due to inadequate technology, insufficient resource allocation, manual processes and weak internal controls, and poor risk governance. Both primary gatekeepers had limited resources. High volume, complexity, and opaqueness of transactions, technological and training gaps, third-party exploitation, and a lack of specialized knowledge and understanding of emerging issues in the international trade arena.  Poor and weak regulatory oversight by the Bank of Ghana and the Financial Intelligence Centre has significantly contributed to the rise of money laundering (ML) and terrorist financing (CFT) by creating vulnerabilities and loopholes within the financial system that criminals can exploit.

Weak oversight meant banking institutions had implemented inadequate or ineffective anti-money laundering and counter-terrorist financing (AML/CFT) controls, such as poor customer identification procedures and transaction monitoring systems. Poor regulatory oversight is highly correlated with weak internal governance arrangements within some Ghanaian banks, including a lack of clear accountability and high staff turnover in key compliance functions, which further compromises risk management. Criminals had also exploited weak systems in the international trade architecture.  

These activities had thrived due to weaknesses in Ghana's financial and trade ecosystem, including inadequate technology, fragmented data across agencies, limited expertise in TBML, and inconsistent enforcement. Trade-based money laundering is a substantial problem at the intersection of trade and financial crime, but a problem that neither Ghana nor the world can ignore. TBML had had a significant detrimental impact on Ghana’s economy, resulting in substantial losses to the country’s foreign exchange reserves.

2.0 Literature Review

Money laundering is the act of disguising the illicit origin of dirty money (Buchanan, 2004). There are several ways illicitly obtained funds can be laundered; one mechanism is via global trade. Trade-based money laundering (TBML) is the process of disguising the proceeds of crime by moving value through trade transactions to legitimize their illicit origins via misrepresentation of the price, quantity, or quality of imports or exports (FATF, 2006). It may involve the use of legitimate international trade systems to transfer value through over- or under-invoicing (invoicing the goods at a price above or below the fair market price), over- or under-shipment (overstating or understating the quantity of goods being shipped or services being provided), or falsely describing the quality of goods and services.

In the case of services, due to difficulties associated with measurement and a lack of consistent prices, the same service may be invoiced multiple times. Trade-based money laundering has received considerably less attention in academic circles than the other means of transferring value. The literature has primarily focused on alternative remittance systems and black- market peso exchange transactions. However, several authors and institutions, including Baker (2005), de Boyrie, Pak and Zdanowicz (2005), the Department of Homeland Security, US Immigration and Customs Enforcement (2005), have recently examined a range of other methods used to launder money through the international trade system as well as the scope that jurisdictions have to identify and limit these activities. FATF (2004/2012) defined trade-based money laundering (TBML) as the process of disguising the proceeds of crime by moving value through trade transactions to legitimize their illicit origins via misrepresentation of the price, quantity, or quality of imports or exports.

It may involve the use of legitimate international trade systems to transfer value through over- or under-invoicing (invoicing the goods at a price above or below the fair market price), over- or under-shipment (overstating or understating the quantity of goods being shipped or services being provided), or falsely describing the quality of goods and services. In the case of services, due to difficulties associated with measurement and a lack of consistent prices, the same service may be invoiced multiple times.

Trade-Based Money Laundering (TBML) is an increasingly sophisticated and damaging form of financial crime that disguises illicit funds through international trade transactions. The complexity of cross-border trade documentation—ranging from letters of credit and invoices to packing lists and customs declarations—creates a fertile ground for criminal exploitation. Traditional anti-money laundering frameworks, rooted in static rules and manual document reviews, have proven insufficient in capturing the nuanced and evolving patterns of TBML. It is not apparent when the term “TBML” was first coined; Zdanowicz (2009) attributes it to research conducted between the 1960s and 1980s, when abnormal international trade pricing patterns prompted suspicions that money was illegally being transferred across borders. Pre-2006 peer-reviewed academic literature has highlighted illicit practices within trade transactions (Bhagwati, 1974; De Wulf, 1981; Zdanowicz, 2004). However, the focus of this scholarship was exclusively on identifying TBML rather than highlighting other types of financial crimes that occur through trade transactions. For example, Soudijn (2014) pointed out that overstating the value of goods to obtain export subsidies constitutes subsidy fraud, not TBML.

In other words, TBML did not feature in the peer-reviewed scholarship; at best, it was discussed peripherally (Waszak, 2004) Consequently, after the Financial Action Task Force (FATF) published its TBML report in 2006, the concept gained prominence (FATF, 2006; FATF, 2008; FincCEN, 2010; Liao and Acharya, 2011; Sullivan and Smith, 2011). TBML has emerged as a typology used by organized crime groups, white-collar criminals, and terrorist organizations, such as Hezbollah, to launder funds. These entities may use TBML to hide profits, pay bribes, and move value to lower taxation zones (O’Halloran et al., 2018; Rollins and Wyler, 2011). In terms of terrorist organizations, there is a conceptual delineation that must be made.

As we are explicitly discussing money laundering, we only consider terrorist organizations using trade to “clean” illicitly obtained funds, not typical terrorist financing and resourcing activities such as Hawala (Razavy, 2005). For instance, cars and other goods are purchased using drug proceeds from the United States and shipped to countries in West Africa; sale proceeds are sent back to Lebanon with help from colluding exchange houses (O’Halloran et al., 2018; Rollins and Wyler, 2011): this activity employed by Hezbollah would fall under the TBML definition given the purpose of trade stream exploitation was to obfuscate the origin of the drug money.

In other words, TBML must start with dirty money that requires “cleaning”. Trade-based terrorism financing should not be conflated with TBML (Sinha, 2013). Motivated by the complexity and magnitude of TBML, this study aims to examine the peer-reviewed literature on TBML, identify gaps, and direct attention towards addressing them to propel further study. Notably, the desire for financial gain serves as a significant driving force for illicit actors to engage in money laundering, including TBML (Byrne, 2011). As a result of the strong link between money and crime (Canhoto, 2020), accounting knowledge becomes critical to manage the huge capital accumulation resulting from such crimes (Compin, 2008).

Stack (2015c) analyzed the role of shell companies in Latvian-type correspondent banking and resulting money-laundering operations. He examined financial flows from Russia and the former Soviet Union and highlighted the use of shell companies in the movement of funds from those associated with corruption and organized crime. Stack (2015c) found that these entities moved funds from Russia, Ukraine, and other Soviet countries through international correspondent banking relations to offshore savings accounts and business suppliers.  Consequently, an increasing amount of illicit funds needing to be laundered increases the importance of accountants in detecting and reporting money laundering (Habib et al., 2018; Mitchell et al., 1998a, b; Neu et al., 2013; Ravenda et al., 2017, 2018). This paper directs attention towards the proceeds of crime being laundered through trade, directly affecting the role of accounting and accountants in society (Murray, 2018).

Given the growing prominence of TBML in disguising illicit funds and the role of accountants in combating illicit flows, a literature review on TBML enhances accountants' understanding of the subject matter, including the identification of red flags, associated challenges, the need for skill development, and required training for its effective detection.  According to a 2016 survey by the World Customs Organization, the customs administration is strategically located to deal with the flows of both goods and corresponding money in the global trade system. They have a great potential to effectively and efficiently combat money laundering through the global trade system (Ryung and Ireland, 2017).

Trade based money laundering typologies on mis-invoicing and transfer mispricing are two concepts under trade mispricing (Rojas, 2020). For this paper, the discussion in this chapter is restricted to the concept of trade misinvoicing. Rojas (2020) describes this as the false report of the value, quantity, or nature of the exported or imported goods and services in a commercial transaction. This practice is a form of customs and/or tax fraud that is used to evade tariffs, other taxes, and trade restrictions on commodities or countries' taxes. Again, according to (WCO, 2018), trade misinvoicing is one of the primary methods of laundering money for illegal transfer to another country. Cobham and Jansky (2017) do present specific data points related to trade mis-invoicing and its impacts in their work; however, their definition of trade mis-invoicing is actually broader than the one provided, encompassing several methods for manipulating transaction values, including those intended to shift money across borders for tax evasion or money laundering purposes.

As identified in the previous chapter, Baker et al. (2014) highlight four strands of trade misinvoicing. Export under-invoicing occurs when the amounts of exports leaving Ghana are under-reported to evade or avoid taxes on corporate profits in the country of export by having the difference in value deposited into a foreign account in Ghana. Similarly, export over-invoicing involves overstating the amounts of exports leaving a country, which often allows the seller to reap extra export credits or avoid capital controls or anti-money laundering scrutiny. On the import side, traders often under-report the amount of imports in a transaction to circumvent applicable import tariffs and value-added tax. Over-reporting imports, they often do so to legitimize sending out additional capital under the guise of legal trade payments. Import over-invoicing disguises the movement of capital out of a country (Baker et al., 2014). The above definitions demonstrate that the misrepresentation of a value, in the form of either undervaluation or overvaluation, is a strand of trade misinvoicing. Ahene-Codjoe et al. (2020) discovered using the London Bullion Market Association (LBMA) daily price series for gold that Ghanaian exports are undervalued by approximately 10% of the total value of gold exported (USD35.6 billion).

The under-valued amount thus constitutes USD 3.5 billion below the contemporaneous London market prices adjusted for the purity of Ghanaian gold production. Hausermann and Ferring (2018) argue that foreign companies have taken advantage of loopholes in the acquisition of licenses to operate on small-scale mining concession sites in Ghana. These companies have taken advantage of administrative and technical irregularities and have stretched the involvement beyond the provision of technical support to the complete operation of mining concessions. The recent trouble with illegal mining primarily exposes a failure of management over one of the country’s main natural resource exports-gold (Nwokolo, 2019). In Ghana, under-declaring the amount or value of gold exported is one mechanism known to facilitate smuggling. Sometimes, false receipts are used to downplay the quality and quantity of gold exported (Hunter, 2020). "Sometimes, false receipts are used to downplay the quality and quantity of gold exported," is a claim supported by research in the field of illicit financial flows and gold trading, attributed to a source by "Hunter (2020)". 

The 2020 research by Hunter suggests that such fraudulent practices, often in the artisanal and small-scale gold mining (ASGM) sector, contribute to trade-based money laundering and illicit financial flows (IFFs). Since the preceding chapter analyses the concept of trade mis- invoicing, this section discusses pure smuggling rather than technical smuggling. Baker, Clough, Kar, LeBlanc, and Simmons (2014) identify four basic categories of trade mis-invoicing; import under-invoicing, import over-invoicing, export under-invoicing, and export over-invoicing in Ghana.  Ayee, Søreide, Shukla, and Le (2011) for instance, lamented over the Ghana Revenue Authoriry’s lack of capacity to value the actual gold produced by the large -scale miners. It was observed that the personnel of the Customs Division of the GRA in charge of the mining companies were not necessarily present in the bullion room to authenticate the shipping documents and monitor the assay of the gold.

They were called to validate the records only at the time of sealing the boxes for export. Also, the GRA did not have the facility or capacity to independently verify the weight and quality (fineness) of gold submitted by the large-scale miners. The academic literature on TBML has highlighted its intricate nature and the many factors contributing to its complexity. Firstly, the volume of global trade presents a challenge for conducting transactional due diligence, therefore hindering the detection of suspicious transactions.

Furthermore, the absence of standardized associated trade data, comprising language and format variations, impedes reliance on trade anomalies as an effective detection mechanism (Zdanowicz, 2009). Secondly, the diversity of goods involved in trade transactions, coupled with limited expertise among customs officers concerning each specific commodity, makes it difficult to identify abnormalities in trade patterns (Hataley, 2020). The complexity is exacerbated further by cross-border transactions and the use of trade finance instruments, such as letters of credit and bills of lading.

These instruments can obscure the true value of goods or the identity of parties involved in the transaction, thus adding a layer of complexity to TBML investigations (Chuah, 2022). Lastly, limited resources dedicated to TBML detection, inadequate regulatory frameworks, and jurisdictional differences contribute to the complexities associated with the phenomenon. According to the reviewed literature, Ghana has been vulnerable to TBML and has been used by launderers to transfer illegal gains. Aside from that, despite the possible risk associated with TBML, the key issue is that stakeholders like Ghanaian banks and the Ghana Revenue Authority (Customs Division) have not addressed this specific area (Sullivan and Smith, 2014).

A plethora of scholarly ML descriptions have used the cash-based method of placing, layering, and integrating cash transactions obtained from unlawful proceeds. Hence, there is a significant possibility of cash being converted into goods and then sent to other countries, making it easier to move and less detectable as illicit proceeds (Naheem, 2017). Literature review on trade-based money laundering (TBML) revealed that it's a sophisticated, growing method exploiting global trade's complexity (high volume, low inspection) to disguise illicit funds via mis-invoicing (over/under-pricing), phantom shipments, multiple invoicing, and goods misrepresentation. Research highlights systemic gaps in Anti-Money Laundering (AML) systems, poor coordination between finance/customs, and a knowledge gap where criminals often outsmart institutions, necessitating better tech, public-private partnerships, and specialized training to combat it.

3.0 Global Impact of Trade Based Money Laundering

Trade-Based Money Laundering (TBML) has a massive global impact, distorting economies by undermining fair competition, eroding tax bases, and fueling serious crimes like terrorism, drug trafficking, and corruption, costing the world economy trillions of US$ and harming development by diverting capital, increasing compliance costs, and damaging financial sector integrity and investor confidence, making it a hidden, sophisticated threat exploiting international trade's vast scale. Trade-based money laundering (TBML) has a profound global impact, serving as a major conduit for illicit financial flows valued at an estimated

$1.6 trillion to $2 trillion annually. This activity corrodes the integrity of the international trade system, distorts national economies, fuels further serious crimes like terrorism and drug trafficking, and significantly undermines governance and development, particularly in vulnerable developing nations (Global Financial Integrity, 2023). Global Financial Integrity's (GFI) 2023 work on Trade-Based Money Laundering (TBML) highlights massive, hidden illicit flows, finding huge discrepancies in trade data suggesting billions in undetected laundering through mis-invoicing and other methods like phantom shipments and misrepresentation, fueling transnational crime and harming development, with GFI calling for better data transparency and enforcement to tackle these complex challenges.

Trade-Based Money Laundering (TBML) globally exploits legitimate trade to hide illicit funds, distorting value through techniques like over-/under-invoicing, phantom shipments, and multiple invoicing, making it a massive, complex threat embedded in global commerce, challenging regulators with sheer volume and blending crime with normal transactions. Detection relies on enhanced data analysis, AI, international cooperation, and public-private partnerships to spot anomalies in documents and transactions, as criminals leverage supply chain vulnerabilities and technological gaps. Trade-based financial crime has become one of the most underreported but severe threats to the global economy.

With an estimated annual cost of $1.6 trillion to US$2.0 trillion according to Global Financial Integrity, TBFC erodes financial systems, fuels illicit activities, and impedes economic development worldwide. Trade-based money Laundering has a massive global financial impact, with estimates in trillions of dollars based on illicit trade-related flows. As already mentioned, as much as US$1.6 trillion of dirty money is thought to be laundered through trade annually. To put this in perspective, that number is equivalent to the yearly GDP of advanced economies such as Australia or Spain. It also constitutes a substantial volume of global underworld money; according to Global Financial Integrity studies, in many developing countries, rather than cash, the most important channel used for the export of illicit financial flows is trade mis-invoicing – in 2013, for example, some 80% of the US$1.1 trillion in illegal financial flows streaming out of developing countries was driven by trade mis-invoicing.

This type of capital flight deprives governments of vital revenues and undermines development (Aidoo,2025). Trade-based money laundering (TBML) poses multi-dimensional risks to global economies by distorting legitimate markets, compromising the integrity of the financial system, facilitating serious transnational crime, and causing significant fiscal damage through revenue loss. Trade mis-invoicing is a prominent channel for IFFs in Ghana (Ahene-Codjoe, Alu, & Mehrotra, 2020). Kar and LeBlanc (2013) argued based on estimates that trade misinvoicing accounts for over 80 percent of illicit outflows. ACEP (2015) identified trade misinvoicing as a major source of illicit outflows from developing countries.

Over 10 years, from 2002 to 2011, cumulative gross illicit flows from trade mis-invoicing in Ghana reportedly amounted to US$14.39 billion (ACEP, 2015). According to Baker et al. (2014), the cost of fraudulent trade invoicing in five African countries – Ghana, Kenya, Mozambique, Tanzania, and Uganda amounted to $14.4 billion in revenue between 2002 and 2014. The study showed that tax authorities in the five countries –lacked the trade, tax, and deals data to curb the illicit flows. Over and under-invoicing in the five countries facilitated the illegal inflows or outflows of more than $60 billion between 2002 and 2011(Ali-Nakyea, 2017; Baker et al., 2014). TBML poses serious threats to global economic and security frameworks. Its consequences extend beyond financial transactions, affecting institutions, markets, and societies.

Economic Distortion and Revenue Loss: Trade-based schemes can undermine legitimate commerce by giving criminal-linked businesses an unfair advantage. If a company can evade taxes or launder narco-dollars through underpriced imports, it can afford to undercut honest competitors. Global industries may suffer from such unfair competition and market distortions. TBML schemes commonly involve tax evasion and customs duty fraud, depriving governments of essential tax revenues that fund public services. This is particularly damaging to developing economies with less robust financial systems. Governments lose substantial amounts of money from uncollected taxes, customs duties, and tariffs due to the manipulation of trade data (e.g., under-invoicing/under-shipping). Economic distortion: TBML undermines fair competition, distorts market pricing, erodes tax revenues, and stifles legitimate economic growth. TBML often involves customs fraud (e.g., mislabelling, under-declaration), which results in significant losses in tax and duty revenues for the government. Governments lose significant tax and customs revenue due to trade misinvoicing.

Market Distortion: Falsified invoices (over-/under-invoicing, multiple invoicing) distort trade data, creating unfair competition and making pricing unreliable. The manipulation of prices through over-invoicing or under-invoicing inflates asset prices and leads to the misallocation of resources, which stifles productivity and hampers long-term economic growth. The influx of illicit money can distort market operations, create price instability, and misallocate resources, as "dirty money" flows into sectors and industries that may not be fundamentally sound but offer good laundering opportunities. The infiltration of large sums of illegal money distorts the normal functioning of markets, affecting pricing and resource allocation. This artificial manipulation can destabilize entire economies and make it difficult for policymakers and economists to make informed decisions based on accurate trade data.

Unfair Competition:  Legitimate businesses that comply with trade and tax laws are at a significant disadvantage compared to criminal enterprises that use TBML to move illicit funds and evade duties. Criminals use TBML to embed illicit funds into the legitimate economy, allowing them to undercut compliant businesses, distort markets, and create an uneven playing field.  Trade-based money laundering could cause undercutting of legitimate prices. Criminals can afford to sell goods at below-market prices because their primary goal is to launder money, not generate a legitimate profit from the sale of goods. This makes it difficult for legitimate businesses that operate within the law and pay taxes to compete on price. By using techniques like under-invoicing or misrepresenting goods, launderers evade proper duties and taxes. This allows them to operate with significantly lower costs than compliant businesses, which must factor these expenses into their pricing

 Erosion of Financial System Integrity: TBML undermines the integrity and stability of the international trade and financial systems by disguising illicit funds as legitimate transactions. Legitimate companies can be unknowingly exploited by criminal networks, leading to potential legal repercussions, massive fines, asset seizures, and severe reputational damage. Trade-Based Money Laundering (TBML) significantly erodes financial system integrity by disguising illicit funds as legitimate trade, undermining AML/CFT efforts, distorting markets through price manipulation, fueling other crimes (terrorism, trafficking), increasing compliance costs, and damaging institutional reputations, creating systemic vulnerabilities that challenge detection due to vast trade volumes and complex networks.

Banking and Financial System Vulnerabilities: Global financial institutions can be misused in TBML schemes, intentionally or unwittingly. Banks that provide trade finance or process international payments may be channeling the proceeds of crime if they fail to detect red flags. Trade-based money laundering (TBML) poses significant vulnerabilities to the banking and financial system by exploiting the complexity of international trade to disguise illicit funds as legitimate transactions. The sheer volume of global trade and the fragmented nature of the systems involved make it a major challenge for financial institutions to detect.

Undermining of Financial Transparency and Rule of Law: On a fundamental level, the pervasiveness of TBML undermines the integrity of the international financial system and the rule of law. It enables corrupt officials and kleptocrats to siphon money out of countries (often into U.S. real estate or banks) through manipulated trade deals, as revealed in scandals like the Panama Papers. When the global trade system is hijacked for illicit purposes, trust in trade data and customs enforcement erodes. Trade-based money laundering (TBML) undermines financial transparency and the rule of law by creating an environment where illicit funds are disguised as legitimate commerce, thereby fostering corruption, distorting economies, and funding serious criminal enterprises. TBML exploits the high volume and complexity of global trade to embed illicit activities within legitimate transactions, making them difficult to detect through traditional anti-money laundering (AML) monitoring systems. This lack of transparency is achieved through various methods.

Erosion of the country’s foreign exchange reserves.

Trade-based money laundering (TBML) causes the erosion of foreign currency reserves by facilitating the illicit flow of money out of a country, often through techniques like over-invoicing imports or under-invoicing exports. This distorts trade data, creates an artificial demand for foreign currency, and puts downward pressure on the local currency. Trade-based money laundering (TBML) can indirectly contribute to the erosion of foreign currency reserves, primarily in economies with strict capital controls or a shortage of foreign exchange. Ultimately, these illicit financial flows put pressure on the domestic currency and can lead to a reduction in a nation's official foreign currency reserves as central banks intervene to manage exchange rates or meet the inflated demand for foreign exchange. The consistent, artificial demand for foreign currency puts downward pressure on the value of the local currency, which can lead to inflation and raise the cost of imports. The loss of foreign exchange buffers threatens overall economic stability and can trigger an economic crisis.

TBML represents a convergence of economic crime and security threats. It erodes financial systems, facilitates crime, and can abet terrorism and corruption on a grand scale.

Funding illicit activities: Laundered funds frequently fuel criminal activities like terrorism, drug and human trafficking, and corruption.

Reputational damage: Jurisdictions and financial institutions vulnerable to TBML face reputational harm, reduced investor confidence and potential restrictions from global financial networks.

Increased compliance costs: Combating TBML requires enhanced due diligence, monitoring, and reporting, which drives up compliance costs. TBML remains an insidious and shape-shifting challenge, silently corroding global trade’s integrity and fuelling illicit activities across borders. Combating it demands a proactive and integrated strategy that unites technology, policy, and collaboration. Only by strengthening our collective defences and fostering a culture of transparency can we shine a definitive light into the shadows of global trade, safeguard the global financial system, and ensure legitimate commerce serves humanity’s prosperity, not its exploitation.

In conclusion, trade-based money laundering (TBML) has a profound global impact, costing the world economy an estimated $1.6 trillion to $2 trillion annually, by distorting markets, eroding tax revenues, and fuelling further criminal activity like drug and human trafficking. TBML is a growing concern because it exploits the volume and complexity of legitimate international trade, making it one of the most challenging forms of financial crime to detect

4.0 The Relevance and Importance of Incoterms ((International Commercial Terms ICC 2020) in the Trade based Money Laundering

Incoterms are important in the context of trade-based money laundering (TBML) because they establish a clear, standardized framework for the roles, costs, and risks in international trade, which provides a baseline for identifying anomalies and red flags that may indicate illicit activity. Incoterms define what a "normal" trade transaction should look like in terms of logistics, insurance, customs, and delivery points. This clarity allows financial institutions, customs authorities, and compliance officers to spot transactions that deviate from standard practices, which often signal money laundering attempts. TBML often involves discrepancies across various trade documents (invoices, bills of lading, customs records).

The specific obligations outlined by the Incoterm in the sales contract must align with the information in all other supporting documents. Mismatches, such as a declared value not consistent with the agreed-upon Incoterm's cost allocation, are a major red flag. Incoterms specify the exact point of delivery and destination. Unusual shipping routes, changes to the destination after shipment, or transactions involving high-risk jurisdictions that don't align with the stated Incoterm can raise suspicion. Incoterms clearly delineate when the risk and costs transfer from seller to buyer. Any financial transactions (such as insurance payments or claims) that occur in a manner inconsistent with the agreed-upon Incoterm can be an indicator of suspicious activity.

The Incoterms are a set of 11 individual rules issued by the International Chamber of Commerce (ICC) that define the responsibilities of sellers and buyers for the sale of goods in international transactions. Incoterms are crucial for international trade because they clearly define responsibilities, costs, and risks for both the buyer and seller, which minimizes misunderstandings and potential disputes. By providing a standardized, pre-defined set of rules from the International Chamber of Commerce, Incoterms ensure that parties know exactly who is responsible for costs like transportation and insurance, where risk transfers, and when the goods are considered delivered.

Of primary importance is that each Incoterms rule clarifies the tasks, costs, and risks to be borne by buyers and sellers in these transactions. Familiarizing yourself with Incoterms will help improve smoother transactions by clearly defining who is responsible for what and each step of the transaction. Incoterms, or International Commercial Terms, are a set of globally recognized rules that define the responsibilities of buyers and sellers in international trade transactions, specifically regarding the costs, risks, and tasks associated with shipping goods.

Produced by the International Chamber of Commerce (ICC), these terms are used worldwide in sales contracts to allocate responsibilities, avoid confusion, and clearly state who is responsible for actions like arranging transport and insurance, clearing goods for export, and when the risk and cost of the goods transfer from the seller to the buyer. The current version is Incoterms 2020, which includes 11 rules.  Incoterms (International Commercial Terms) are a set of standard trade rules published by the International Chamber of Commerce (ICC) that define the responsibilities, costs, and risks of buyers and sellers in international trade transactions. They clarify who is responsible for shipping, insurance, and customs duties at different stages of transport. The current version is Incoterms 2020, which includes 11 rules, seven for all modes of transport and four for sea and inland waterway transport. (International Commercial Terms) are a set of 11 internationally recognized, three-letter terms published by the International Chamber of Commerce (ICC) that define the responsibilities, costs, and risks for buyers and sellers in international trade.

Key aspects of Incoterms

• Clarity in transactions: They act as a shorthand to clearly define who is responsible for what during international shipments, reducing misunderstandings caused by language or cultural differences.
• Risk and cost allocation: Incoterms precisely state at which point the risk and cost of the goods transfer from the seller to the buyer.
• Core responsibilities: They cover a wide range of responsibilities, including who arranges and pays for transportation, insurance, and export/import customs clearance.
• Global recognition: They are recognized and implemented by most major trading nations, making international commerce more predictable and efficient.
• Voluntary adoption: While not legally binding on their own, they become part of a sales contract and are a voluntary, but widely adopted, standard.

b.  The seven Incoterms 2020 rules for any mode(s) of transport are: 

    EXW - Ex Works (insert place of delivery)

    FCA - Free Carrier (Insert named place of delivery) 

    CPT - Carriage Paid to (insert place of destination) 

    CIP - Carriage and Insurance Paid To (insert place of destination)  

    DAP - Delivered at Place (insert named place of destination)  

    DPU - Delivered at Place Unloaded (insert of place of destination)  

    DDP - Delivered Duty Paid (Insert place of destination)

c.. The four Incoterms 2020 rules for Sea and Inland Waterway Transport are: 

     FAS - Free Alongside Ship (insert name of port of loading) 

     FOB - Free on Board (insert named port of loading) 

     CFR - Cost and Freight (insert named port of destination) 

     CIF - Cost Insurance and Freight (insert named port of destination)

d. The Importance of Incoterms

Customs authority and banking institutions engaged in international trade transactions should be familiar with the incoterms. So, exporters, that includes your international sales force and importers, that means your purchasing agents and buyers. Regardless if you are a seller or a buyer, that also includes customs officials, logistics and transportation departments, senior managers in banks and others. When a seller and a buyer agree to employ a particular Incoterm, each accepts the corresponding obligations and responsibilities as clearly set forth and defined under that particular Incoterm. Incoterms reduce the risk of legal complications by giving buyers and sellers a single home base from which to reference trade practices.

In essence, Incoterms provide the essential context for a trade transaction, making it possible to discern legitimate trade from criminal exploitation. Without this standardized framework, it would be much harder to identify the numerous red flags, such as phantom shipments, misrepresentation of goods, and pricing anomalies, that characterize trade-based money laundering

5.0 The Importance and Relevance of Methods of Payment in Trade Based Money Laundering.

Methods of payment are critical to Trade-Based Money Laundering (TBML) schemes because they determine how illicit funds are moved and concealed within legitimate commerce, effectively acting as the mechanism that enables the layering and integration stages of money laundering. By using methods like letters of credit, wire transfers, or open accounts to pay for goods (even falsely valued ones), criminals create a paper trail that mimics legitimate trade transactions. This makes the funds appear to be the proceeds of genuine international sales rather than criminal activity. TBML schemes often utilize complex networks of shell corporations and multiple jurisdictions. The specific payment method used (e.g., third-party payments, offshore accounts, or even informal value transfer systems) can deliberately obscure the true origin and destination of the money, making it difficult for financial institutions and regulators to trace the flow of funds. Banks and other financial institutions typically rely on payment information to conduct due diligence.

Launders exploit weaknesses in these systems, such as misrepresenting payment details or using non-bank payment methods, to bypass regulatory scrutiny. The method of payment is the bridge between the physical movement of goods (or lack thereof) and the financial transaction. The selection of a particular method allows criminals to integrate their illicit funds back into the formal economy through the seemingly innocuous process of paying invoices. In essence, monitoring and scrutinizing payment methods is a key strategy for identifying and disrupting TBML operations, as irregularities in payment processes are often the most telling indicators of illicit activity

Methods of payment are needed in international trade to manage the significant risks of non-payment for exporters and non-delivery for importers, while also offering a variety of options that can be competitive and suit different buyer-seller relationships. Without appropriate methods, transactions would be extremely risky, potentially leading to a loss of goods or non-payment, but a range of options from cash-in-advance to open account allows businesses to choose terms that balance risk with competitiveness. Methods of payment in international trade include cash-in-advance, letters of credit, documentary collections, and open account. Each method has different levels of risk allocation between the exporter and importer in the international trade space

1. Open account

The United Nation’s Trade Facilitation Implementation Guide notes that an “open account transaction is a sale where the goods are shipped and delivered before payment is due”. Payment is usually made by a set time period, anywhere between 30 and 90 days after receipt of the good or service. TBML schemes frequently involve this method because financial institutions have a reduced role, meaning less oversight than for the documentary collection process. Financial institutions can struggle to accurately or consistently assess the legitimacy of the customer’s operations, whether through automated or manual transaction monitoring

• Documentary collections

In documentary collection, the exporter requests payment by presenting shipping and collection documents for the traded goods to its financial institution. The financial institution then forwards these documents to the importer’s financial institution, who then transfers the funds to the exporter’s financial institution, who will subsequently credit those funds to the exporter. However, despite a perceived increase in role for FIs, it is limited as they do not necessarily verify the documents. In addition, documents are not always standardized, increasing the risk of TBML exploitation through fictitious or false invoicing. However, when these documents can be checked and assured, certain data points can be used to spot TBML, including: • Use of a personal email address in lieu of a legitimate business email. • Subject to financial institution’s data storage capabilities, the obvious recycling of previous documentation with few or no edits, including something as basic as the date. • The complete lack of any trading presence of the exporter, following research by the financial institution. This included the use of residential rather than business premises for exporters providing significant quantities of goods

• Letters of Credit (LCS) and Bank Guarantees (BGS)

Letters of Credit (LCs) and Bank Guarantees (BGs) are vital financial tools in the world of international trade. They act as safety nets, ensuring that both buyers and sellers are protected during cross-border transactions. An LC is issued by a bank on behalf of the buyer, guaranteeing that the seller will get paid once certain conditions are fulfilled. On the other hand, a BG is a commitment from a bank to pay the seller if the buyer fails to meet their obligations, providing peace of mind for everyone involved. These instruments help reduce the risk of non-payment, making it easier for trade to happen, especially when the buyer and seller come from different countries where trust might be limited. However, while LCs and BGs are crucial for secure international trade, they can also be misused. Unscrupulous individuals might exploit these financial tools for money laundering, using them to move illegal funds across borders. For example, they might forge documents or create fake transactions to obtain an LC or BG, effectively hiding the source of their illicit money. To tackle the misuse of Letters of Credit (LCs) and Bank Guarantees (BGs), there are international regulations like Uniform Customs and Practice for Documentary Credits, 2007 Revision, ICC Publication No. 600 (UCP 600);  International Standby Practices current revision (ISP98); International Standard Demand Guarantee Practice (ISDGP) for URDG 758 (ICC publication 814E) and International Standard Banking Practice (ISBP 821) designed to protect against illegal financial activities. Groups like the Financial Action Task Force (FATF) establish worldwide standards for Anti-Money Laundering (AML) practices, which play a vital role in spotting and stopping money laundering and other financial crimes in global trade. These regulations help ensure that trade transactions are clear and that banks and financial institutions adhere to rigorous due diligence processes to detect and prevent any fraudulent activities.

• Standby Letter of Credit (SBLC)

A standby letter of credit (SBLC) is a bank's guarantee to pay a beneficiary a specific amount if the applicant fails to fulfill a financial or performance obligation. The standby LC is unlike other letters of credit and is more of a bank guarantee. It is most often used not as the primary payment method but rather as a fail- safe method or guarantee for longer-term projects. Unlike a commercial letter of credit, which facilitates payment for goods, an SBLC acts as a "payment of last resort" or a secondary assurance of payment. It is a flexible tool used in many situations to mitigate risk in contracts. A standby letter of credit, abbreviated as SBLC, refers to a legal document where a bank guarantees the payment of a specific amount of money to a seller if the buyer defaults on the agreement. The global rule sets which govern Standby Letters of Credit (SBLC) -both the Unform Customs and Practices UCP 600 and International Standby Practices (ISP98)

e. Advance payment

In international trade, an advance payment, also known as cash-in-advance, is a payment method where the buyer pays the seller in full before the goods are shipped. This method is the most secure for the exporter because they receive payment before transferring ownership of the goods, eliminating credit risk. However, it is a high-risk option for the buyer, who faces the risk of non-delivery and potential cash flow problems. As an exporter, you can eliminate credit risk, or the risk of non-payment from foreign buyers, with the cash-in-advance payment method. Cash-in-advance is the most secure method of payment for the exporter because the importer pays the full or a significant amount of the payment before the goods are shipped. Payment is usually made via wire transfer, credit card, or escrow service. Cash-in-advance is recommended in high-risk trade relationships or export markets, particularly for small export transactions for which other payment methods may not be cost-effective. Cash-in-advance is also less burdensome than a letter of credit and has less risk for the exporter than an open account. However, requiring payment in advance is the least attractive option for the buyer. Exporters who insist on cash-in-advance as their sole payment method for doing business may lose out to competitors who are willing to offer more attractive payment terms. Depending on the sales opportunity, an exporter may also need to consider other terms of payment.

In summary, methods of payment are critically important in the context of Trade-Based Money Laundering (TBML) because they are the mechanism through which illicit funds enter the legitimate financial system and are disguised as payment for goods or services.. They are the point of vulnerability that compliance officers and regulatory bodies monitor to detect suspicious financial activity

6.0 Trade Based-Money Laundering and Its Stages

The placement, layering, and integration stages are crucial in the context of Trade-Based Money Laundering (TBML) and Anti-Money Laundering (AML) efforts because they represent the entire lifecycle of how illicit funds are laundered and how they can be detected and prevented. Understanding each stage allows financial institutions and regulatory bodies to develop targeted and effective control measures. TBML exploits international trade's complexity to blend dirty money with legitimate transactions, making it hard to detect compared to simple cash laundering. Trade-based money laundering (TBML) is a sophisticated and significant method of money laundering that is important and relevant due to its ability to exploit the complexities of the global trade system to disguise illicit funds. It is often more difficult to detect than traditional methods and poses serious threats to the integrity of the financial system, national security, and economic development.

The three main stages of TBML—placement, layering, and integration—are relevant for understanding how criminals move illicit money and assets. TBML allows criminals to "hide in plain sight" within the immense volume and complexity of global trade. Understanding how these schemes work is the first step for public and private sectors to effectively stop them and disrupt transnational criminal organizations involved in drug trafficking, fraud, and terrorism financing. Understanding Trade-Based Money Laundering (TBML) and its stages is critical because it is one of the most complex and widely used methods for criminals to disguise illicit funds as legitimate commerce, posing a significant threat to global financial security and economic stability.

The three stages of trade-based money laundering (TBML) are placement, layering, and integration, which are the same as traditional money laundering but applied to trade finance. In TBML, criminals manipulate trade to launder money by using methods like over/under-invoicing, misrepresenting goods, and multiple invoicing to obscure the origin of illicit funds before integrating them back into the legitimate economy

 a. Placement Stage

Criminals introduce illicit cash into the financial system through a trade transaction. This can be achieved by paying for goods and services with dirty money, often using physical cash deposits that are small enough to avoid triggering alerts. Activities related to trade-based money laundering are cunningly advanced in three main stages. These include placement, layering and integration stages. At the placement stage, criminals draw on their skill or cleverness to ensure proceeds of illegal activities are introduced to the mainstream and legitimate financial system. By inflating the value of goods in trade transactions and creating artificial profits, the criminals ensure these profits are transferred to foreign bank accounts.  Money laundering “is the processing of criminal proceeds to disguise their illegal origin. This process is of critical importance, as it enables the criminal to enjoy these profits without jeopardizing their source”. There are three stages of money laundering. The first stage, placement, is probably the most crucial and challenging stage for money launderers and the easiest stage for law enforcement to discover because it must eliminate plausible evidence indicating the money’s origin.

Large sums of cash are injected into the financial system through structured deposits or by combining them with legitimate business proceeds. The most used legitimate enterprises are entertainment shops, liquor stores, casinos, and restaurants. Currency smuggling is another common approach to placing illegal cash into the system. It involves moving the currency illegally in or out of a country using different transportation techniques that do not leave an audit trail. Security brokers and currency exchanges also provide an outlet for money launderers to move money. An asset purchase is another common placement approach that enables criminals to change illegal bulk cash into valuable assets

 b. Layering Stage

The second stage of money laundering is concerned with hiding the trail and making it difficult for auditors to follow laundering activity. This phase is known as layering, which involves moving the funds in a financial system through a series of complex transactions. The cash injected into the stream is converted into monetary instruments by involving banks and other entities. For instance, money orders and banker drafts are drawn to help complete the transactions. Additionally, the funds can be used to acquire material objects instead of holding cash. Materials bought using criminal money are then resold, making the source of the funds difficult to trace. It is also challenging to seize assets compared to unreported bulk cash. The money is then moved through a series of complex transactions to obscure its origin. In TBML, this involves manipulating trade documents like invoices and bills of lading. The techniques include: over/under-invoicing: Invoicing goods at a price higher or lower than their actual value, multiple invoicing: Using the same invoice multiple times to justify multiple payments for the same shipment, misrepresenting goods: Falsely describing the quality, quantity, or type of goods being traded. Criminals create complex web of transactions at the layering stage; and this facilitates their separation of illicit funds from the original source. True ownership of the funds is concealed through creation of shell companies; issuance of false invoices; and mislabeling of goods.

• Integration Stage

The laundered money is eventually moved back into the economy as legal funds in the final stage, referred to as integration. This phase involves incorporating funds into the legal economy, and successful laundering is completed so that it is impossible for authorities to trace the origins of illicit funds. Unlike in the layering stage, the detection and identification of funds as laundered, in the integration stage is when the money goes back to the financial system and appears as legal business proceedings. Several known integration methods include property dealings, front companies, false loans, and false import and export invoices. For instance, money launderers lend themselves money from front companies, making these seem like legitimate transactions. False invoices are also effective approaches to integrating illegal funds into the economy. Companies over-evaluate their funds, which helps them justify to authorities the source of cash deposited in banks. The money is reintroduced into the legitimate economy, appearing to have a legitimate source. This can be done by purchasing assets like real estate or stocks using the "cleaned" funds. In TBML, this is the final step where the manipulated trade transactions make the money seem like a legitimate profit from trade activities The integration stage relates to where the perpetrators draw on their ‘ingenuity’ to reintroduce laundered funds back into the legitimate financial system. The strategies adopted and utilized by the criminals make it difficult for law enforcement agencies to effectively trace the origin of the illicit funds. This criminal activity may be executed through the purchase of high-value goods such as luxury vehicles or artworks, bank transfers, and purchase of real estate.

7.0   FATF 2006 report identified several techniques that form the foundation of TBML:

Trade-based money laundering (TBML) typologies involve misrepresenting the price, quantity, or quality of goods in international trade to hide illicit funds. Key techniques include over- or under-invoicing goods, using phantom or fictitious shipments, and multiple invoicing for the same shipment. Other methods involve misclassifying goods, using legitimate trade for money laundering, or creating circular trade arrangements. Criminal organizations have devised a toolbox of tactics to launder money through trade trans-actions, including what to do with trade invoices and shipping docu-mentation, and how to structure trade financing – all aspects of cross-border trade. TBML classic methodologies: Typologies highlighted by FATF include but are not limited:

• Over-Invoicing of Goods: This refers to the situation where the exporter/seller and the importer/buyer agrees to inflate the value of goods or services on the invoice. By providing amounts far in excess of the market value of goods, the importer remits excess funds (in theory to pay for goods) to the exporter thereby wiring illegal profits to other countries and out of other jurisdictions in the form of a legitimate payment. The overpaid amount is used as laundering gains by the exporter (usually operated by the criminal entities). This allows value transfer out of the importing country through simple over-invoicing – in which, say, the dirty firm in Country A over-pays for a consignment from a front company in country B and shifts kickbacks or dirty profits to country to B in the form of trade (FATF,2006)

• Under-Invoicing of Goods: On the other hand, the scam can also function in the opposite direction by presenting a cost that is less than actual. The exporter then sells the goods at a very cheap price to an importing party that is in this instance colluding. The importer then resells the products with no discount into its domestic market, and the extra profit (the difference between the real value and the invoiced value) will be deemed an illegal cash out from the exporter’s country. As such, the under-invoicing allows exporters to smuggle a portion of the value out of its home country – typically to avoid taxes or capital controls – thereby not getting paid the full amount while what was owed to the exporter gets laundered in the payment when received. Both over-and under-invoicing involved misrepresenting the price of goods, and both depended on collaboration between business pals to work (FATF,2006)

• Multiple Invoicing (Double Billing): This is where the shipment is invoiced for a number of times, maximizing the value from the goods. The exporter produces two or more invoices on a single cargo–usually to different banks or financiers–and gets multiple payments for the same goods. A fraudulent actor could, for example, create one invoice to secure a trade finance loan (including a letter of credit or factoring) from Bank A then present a second invoice for the same set of goods to Bank B, seeking a second loan, such that multiple invoicing gives rise to excess funds that are laundered, when, in fact, only one trade took place. If discovered, parties colluding to duplicate payments might attempt to justify those payments with excuses (clerical errors, changes to terms, and so forth). This scheme relies on the non-cooperation of banks and traders of trade finance transaction (Aidoo,2025)

• “Phantom” Shipments (False Exports/Imports): Arguably, the most egregious type of TBML is the fictitious trade. Criminals will generate endless paperwork on products or goods that never shipped — forging bills of lading, customs declarations and invoices for phantom products. With these phony invoice scams (also known as phantom shipment), dirty lucrative funds are able to circulate for the value of the purported merchandise to be paid, despite the fact that no tangible value was involved in goods. For instance, Company X in the Far East Country. might send Company Y in another country like Ghana $5 million purportedly to pay for a shipment that, in fact, never took place. These are scams that without a physical victim are dependent on corrupt freight forwarders or falsified transport documents to dupe officials, and they demonstrate how trading in goods can be used to exploit holes in the systems of international trade documentation and verification (        FATF,2006)

• Mis-declarations: where the type of goods or products is incorrectly stated on the shipping documents like bill of lading, airway bill, invoices, certificate of origin etc.

• Misrepresentation of Goods (Quality/Quantity Fraud): False submission of the quantity or quality of goods in documents is also a related method. These might include such nefarious practices as representing poor quality, or inexpensive, products as luxury items (or justify charging more), or the reverse. Crooks could send anything, but not what the paperwork states—for example, a cargo container of scrap metal might actually be labeled as premium electronics.

By adjusting just product descriptions or harmonized system (HS) codes, money launderers can hide illegal value transfers (and in some cases even hide contraband) within legitimate trade. Misrepresentation schemes are commonly deployed to avoid the payment of tariffs and taxes (a financial crime in its own right and launder money. (FATF,2006)

1. Abuse of Supply Chain Finance: The use of global supply chain finance (SCF) structures –a class of financial services that enable importers and exporters to finance trade receivables and payables – have introduced a further layer which criminals can exploit. Typical SCF instruments include letters of credit, factoring (invoice discounting), export credit and payables financing. There are several ways in which illicit actors exploit these control mechanisms. a. Colluding parties could receive trade finance from banks that is based on forged or inflated invoices, transforming TBML schemes into fraud perpetrated against the bank. For example, an exporter may submit an over-invoiced sales contract to a bank in order to get a larger loan or advance (since the bank thinks the goods are worth more), and then default on the loan after pocketing the additional funds. By duping multiple banks with multiple invoices, they multiply their ill- gotten wealth (Aidoo, 2025).

• Receivables purchase programs (such as “factoring”) can be abused if criminals sell accounts receivable (in the form of invoices) at a discount to banks or other financial institutions in return for immediate cash. A laundering network could create a set of fake receivables between shells and then factor those fake invoices with a complicit factoring company, “monetizing” the illicit funds. The factor thinks it is going to get the money from the buyer (who may be part of the conspiracy, or may also be a shell), but the deal may eventually default, and the factor will be out whatever amount the criminal has managed take off him, and the criminals would have clean the dirty funds.

 c. Trade insurance and guarantees may also come into play. In other frauds, insurers or guarantee agencies are duped into covering claims on phantom shipments or non-payment, effectively laundering money through insurance claims. Then the export subsidy or tax refund programme (where a VAT is refunded or taxes credited on exports) may be misused by providing false export documentation – thereby intersecting with TBML when, in fact, the transactions are fraudulent exports and TBML when, in fact, they are proceeds of crime being laundered (Aidoo, 2025)

In summary, illicit actors are adept at using both the physical movement of goods and the financial structures around trade to move money. As noted in a recent U.S. Treasury study, TBML schemes commonly involve “the misrepresentation of the price, quantity, or quality of imports or exports” to camouflage the movement of value. Supply chain finance provides additional channels to do so by introducing third-party funders that can be duped. The complexity and global span of modern supply chains – often involving multiple currencies, jurisdictions, and intermediaries – create a fertile environment for these manipulations. Without robust oversight, each handoff in the chain (from manufacturer to exporter to shipper to importer to financier) is a potential point where illicit value can be injected or extracted under false pretenses ((Aidoo, 2025).

8.0 Global role of Banking Institutions as Primary Gatekeepers in the fight against Trade Based Money Laundering.

Global banks serve as the primary line of defence in the formal financial system, playing a pivotal role in the fight against trade-based money laundering (TBML) by implementing robust Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) programs, leveraging technology, and collaborating with other stakeholders. Banks are primary gatekeepers in the fight against trade-based money laundering (TBML) because virtually all criminal proceeds must pass through the formal financial system to be concealed and integrated into the legitimate economy. Global banks play a critical role in combating trade-based money laundering (TBML) by leveraging their position as financial intermediaries to implement robust Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) measures. They use enhanced due diligence, transaction monitoring, and sophisticated technology to detect and report suspicious activity, disrupting the movement of illicit funds through the legitimate global trade system

Banks unique position at the intersection of finance and commerce provides the best opportunity to detect and report suspicious activity. Banks act as the "circulatory system" for the economy, processing the vast majority of payments, including those related to international trade. This gives them a unique vantage point to monitor and trace illicit funds that other entities might miss. Banks are primary gatekeepers in the fight against trade-based money laundering (TBML) because they are the financial intermediaries through which most international trade payments flow. They are required by law to have Anti-Money Laundering (AML) controls to detect and report suspicious activity, but these controls have often proven insufficient for the complexities of TBML. The reliance on banks is part of a multi-faceted defence system that includes customs authorities and financial intelligence units. Globally, Banks develop and continuously strengthen their gatekeepers’ role in ML/CFT that involves enhancing their internal controls through robust risk assessments, clear policies, and comprehensive employee training. It also requires effective public-private partnerships for information sharing, leveraging technology like advanced analytics for better risk identification, and aligning international standards and regulatory frameworks like those from the FATF. Banks must adhere to international standards and frameworks like those from the Financial Action Task Force (FATF) to ensure harmonized regulations and effective cooperation across border Banks and other financial institutions must enhance internal controls and capabilities by conduct thorough risk assessments specific to the gatekeeper's business to identify vulnerabilities, establish clear, risk-based policies and procedures for anti-money laundering and counter-terrorist financing (AML/CFT), implement thorough CDD procedures, EDD procedures including verifying customer information and understanding beneficial ownership and Set up systems for monitoring transactions and a clear process for reporting suspicious activity to the Financial Intelligence Center.  Banks are required to conduct thorough due diligence to verify the identity of their clients, understand the nature of their business activities, and assess the source of their funds. This process helps in identifying high-risk clients and unusual patterns. Banks must continuously monitor customer accounts and transactions for suspicious patterns that do not align with a customer's expected activity or economic profile. For TBML, this involves flagging anomalies like, significant mismatches between the value of goods and their declared price (over- or under-invoicing). Inconsistencies in shipping documents (e.g., invoices, bills of lading, certificates of origin). "Phantom shipments" where documentation exists but no goods physically move.

Global banks conduct a thorough and regularly updated assessment to identify and understand the specific money laundering, terrorism financing, and proliferation financing risks the organization faces. This assessment should consider various factors such as customer types, services offered, geographic locations of operation, and delivery channels.  Implementing systems and controls to ensure the AML/CTF program is effectively executed and adhered to across the organization. These controls should support the policies and procedures and ensure ongoing compliance.  Banks in the country must implement risk-based approaches (RBA) where resources are efficiently by focusing on high-risk clients, products, and geographies. This ensures that effort is directed where it is most needed, particularly for smaller firms with resource constraints. A robust RBA requires an organization-wide risk assessment that is regularly updated. Banks must regularly undertake a comprehensive risk assessment involves several key considerations:  identifying risk factors: Pinpointing the specific aspects of the business that might make it vulnerable to ML/TF. Factors to consider include the types of clients, the geographical areas of operation, the services offered, and the delivery methods of service, analyzing risk levels: After identifying risk factors, the next step is to analyze the risk associated with each factor.

This involves evaluating and analyzing likelihood of the risk occurring and its potential impact on the business. understanding inherent Risks: Gaining an in-depth understanding of the inherent ML/TF risks specific to the gatekeeper profession and the individual business. This understanding forms the basis for developing targeted and effective mitigation strategies. Global banks go beyond basic identity verification to understand the nature and purpose of business relationships. For higher-risk clients, such as politically exposed persons (PEPs) or those from high-risk jurisdictions, Enhanced Due Diligence (EDD) measures must be applied. Ghanaian banks must continuously monitor client transactions for unusual or suspicious patterns that deviate from a client's profile. This can involve automated systems that flag transactions based on pre-defined criteria, as well as manual reviews. Banks must implement automated screening against sanctions lists, PEP databases, and adverse media reports. Automated solutions are especially beneficial for smaller firms, as they reduce manual effort and human error. Banks must strengthen external collaboration and technology by fostering close partnerships with Central Banks, Financial Intelligence Units and law enforcement agencies to enable information and resource sharing. Banks must leverage technology, such as big data and predictive analytics, to identify emerging threats and enhance risk detection capabilities. Using innovative solutions like big data analytics, AI, and machine learning to improve the speed and accuracy of AML/CFT measures. These tools can be used for tasks such as screening clients against watchlists, monitoring transactions, and identifying patterns of illicit activity.

Global banks had all developed comprehensive AML/CFT training and compliance culture. Develop and deliver regular, comprehensive training programs for all employees. Training should cover AML/CFT obligations, the latest money laundering typologies, how to recognize red flags, and proper reporting. The Board and Senior Management Team must develop a strong culture of compliance. Encourage a culture where compliance and ethics are promoted from the top down. Senior management should set the tone by demonstrating a commitment to compliance, and employees should be encouraged to openly communicate and report issues.

Prioritizing employee training and fostering a strong culture of compliance are critical for effectively implementing AML/CTF measures within gatekeeper professions. Comprehensive and ongoing training ensures that all relevant employees understand their obligations, recognize potential risks, and know the consequences of non-compliance. Additionally, fostering a strong culture of compliance, where ethical conduct and adherence to regulations are valued and promoted from the top down, is equally important. Banks mustestablish robust transaction monitoring and Suspicious Activity Reporting (SAR) systems is a critical compliance requirement for gatekeepers. These systems are designed to detect unusual or suspicious patterns in client transactions and ensure that such activities are promptly reported to Bog and FIC. Effective transaction monitoring acts as a safeguard, helping to identify and disrupt potential ML/TF attempts. As the primary gate keepers of ML and CFT, Banks should always form KYC policies by considering the below four components:

(a) Risk Management: The Board of directors should ensure that the banks are effectively following all the procedures and norms that are implemented. Proper management teams must be set up with corresponding roles and responsibilities for each team to carry out and report any issues to the higher authorities in the bank. Every bank should have an internal audit committee and compliance team that plays a vital role in evaluating and ensures that the KYC norms and procedures are adhered. It is also the responsibility of the audit committee and compliance team to evaluate and generate reports quarterly.

(b) Customer Acceptance Policy (CAP): Every bank should build clear customer acceptance policy. This policy provides in depth details of all the attributes for having customer relationship with the bank. As per the CAP, none of the anonymous accounts are to be opened. The risk perception of the client (low, medium, or high) will be categorized based on where the client is located, nature of business activity, turnover, mode of payments and their financial status and the required documents need to be obtained, and periodic review of the client needs to be done accordingly.

(c) Customer Identification Procedure (CIP): Banks should always identify if the client is acting on behalf of the other person in the form of trustee, nominee, or an intermediary. If that is true, then necessary document needs to be submitted to the bank from the client. Banks should be aware of the ownership structure of the client and should perform necessary KYC analysis of the clients or individuals involved with the risk perspective.

(d) Monitoring of Transactions: By Constantly monitoring the clients (which is an essential part of KYC procedure) the banks can reduce the risk of uncertainty. However, the monitoring of clients depends on the type of risk it is classified under by the bank (low, medium, or high risk). Nonetheless banks should always monitor the large, suspicious, or complex transactions by setting up key indicators and should investigate the core source of these funds and monitor the clients for at least once a year.

Global banks should conduct thorough due diligence on clients engaged in international trade to verify their legitimacy and understand their normal trading patterns. Enhanced Due Diligence (EDD) is applied to high-risk customers or transactions. Banks by implementing robust systems to continuously track and analyze trade transactions for suspicious activities. This includes monitoring for red flags such as abnormal invoicing (over or under-valuing goods), unusual shipping routes, or frequent transactions with high-risk jurisdictions. Rigorously screening all counterparties in a trade transaction against global sanctions lists, such as the Specially Designated Nationals (SDN) list, to ensure compliance with international regulations and prevent sanctions evasion. Most of the global banks utilize artificial intelligence (AI) and machine learning (ML) to identify subtle anomalies and complex TBML patterns that might be missed by manual processes. This includes automating document review and analyzing vast amounts of data. Banks are legally obligated to report suspicious transactions to national Financial Intelligence Units (FIUs). Banks have access to a wealth of financial data, and increasingly, with technology like AI and machine learning, they can cross-reference this with trade data (e.g., vessel tracking, market prices) to spot red flags more effectively. While other entities like customs authorities and lawyers also play a gatekeeping role, banks are the primary line of defense because they handle the actual movement of money and are subject to extensive and enforced AML regulations

9.0 Global role of Customs Authorities as primary Gate Keepers in the fight against Trade-based Money Laundering

One of the main agencies responsible for enforcing TBML prevention is the customs department. The customs department must play a crucial role in this because it has in-depth knowledge of international trades, goods flows, the global supply chain and many other pieces of information. Custom authorities play a critical global role as "gatekeepers" by acting as the primary line of defense at international borders, strategically positioned to identify, intercept, and disrupt the physical flow of illicit goods and associated funds involved in trade-based money laundering (TBML).  Customs authorities play a vital role in combating trade-based money laundering (TBML) by leveraging their unique position at the border to monitor the flow of goods and associated documentation. Their key roles and responsibilities include border control and trade regulation enforcement, data collection and analysis, physical inspection of goods, risk management, investigation, and information gathering. Customs are primarily responsible for overseeing the import/export of goods, enforcing trade laws, and collecting duties and taxes.

In doing so, they are strategically placed to detect anomalies in trade transactions that may indicate illicit financial flows. They gather vast amounts of data from customs declarations and accompanying trade documents (e.g., invoices). Analyzing this information for inconsistencies is crucial for identifying TBML red flags, such as mis-invoicing (over or under-valuing goods), mis-description of quantity or quality, and phantom shipments (documents without actual movement of goods). Conducting non-intrusive and, when necessary, intrusive inspections of shipments (using scanners, for example) helps verify that the actual goods match the descriptions and values declared in the documentation. Customs administrations often have the mandate to investigate customs fraud, which can lead to the detection of underlying money laundering activities. Some may have independent power to investigate money laundering cases, while others participate in joint operations with other authorities. Customs authorities are essential in the anti-money laundering system because they focus on verifying physical goods, a function that financial institutions typically do not perform when monitoring payments. Customs services act as gatekeepers in the fight against trade-based money laundering (TBML) by using their unique position at national borders to monitor and detect financial crime. TBML is a complex process that exploits the large volume of international trade to move illicit funds, often by manipulating the price, quantity, or quality of goods.

Key global roles and functions of Customs Services include border Interdiction, trade data analysis, and physical verification of goods, risk profiling: information collection and reporting, and investigation. Customs are at the "tip of the spear" in controlling the movement of goods, currency, and currency equivalents across national borders (land, sea, and air). They are responsible for detecting bulk cash smuggling and the physical transportation of monetary instruments, as outlined in Financial Action Task Force (FATF). FATF Recommendation 32 is about cash couriers, requiring countries to implement measures to detect and prevent the physical movement of large amounts of undeclared cash and cash equivalents across borders. It obligates countries to have a system for declaring and controlling cash at their borders, including procedures for customs to investigate, hold, and potentially confiscate cash if there is non-compliance Customs authorities have access to critical trade documents, such as customs declarations, bill of ladings, airway bills  and invoices, which are essential for identifying anomalies indicative of TBML (e.g., misrepresentation of price, quantity, or quality of goods).

This involves using data analytics to flag suspicious transactions. By leveraging their in-depth knowledge of international trade, goods flows, and the global supply chain, customs officials can develop advanced risk profiles to target high-risk shipments without unduly hindering legitimate trade. Customs often collect information on potential money laundering activities and are mandated to share this intelligence with relevant authorities, such as Financial Intelligence Units (FIUs) and other law enforcement agencies. While mandates vary by country, some customs services have full investigative powers to initiate and complete money laundering cases, whereas others participate in joint operations with national police and other competent authorities. Custom services are usually the primary enforcement authorities in the trade area, with a mandate to tackle crimes based on the misuse of the international trade system, including TBML. Custom services thus have in-depth knowledge of the international trade arena, the flows of goods, and international supply chains, all of which are vital for identifying and investigating TBML activities.

Customs services also often have sole access to international trade documents and data, which is key to identifying TBML.  Custom cargo analysis can help detect TBML, as anomalies in this data can indicate a TBML scheme and other trade-related crimes. The role of customs services as the sentinels for illicit trade activity places these authorities in a unique position for detecting the use of international shipments for illicit purposes. At the same time, the ever-increasing volume of international trade – and the associated increase in trade data – presents a key challenge for custom services trying to identify TBML schemes and other trade-based crimes. Shipments associated with TBML represent a small fraction of the overall legitimate trade, making TBML challenging to identify. In addition, customs services must balance the analysis and inspection of cargo shipments with the need to clear shipments quickly and ensuring a viable and efficient trade framework.

Other historical priorities of custom services, such as the collection of custom duties and setting tariffs, also require significant resources. Therefore, it is important to ensure that custom services have sufficient capacity to examine shipping documentation and financial intelligence provided by the domestic FIU and LEAs. The effectiveness of customs as gatekeepers is significantly enhanced through global cooperation.  The World Custom Organization promotes customs-to-customs cooperation and provides guidance, capacity building, and operational support to its 183 member administrations to combat illicit financial flows (IFFs) and TBML. The FATF sets the international anti-money laundering and counter-terrorism financing (AML/CTF) standards, highlighting the importance of customs in the TBML fight and recommending better cooperation between customs, financial institutions, and law enforcement. World Custom Organization and Egmont Group collaboration have developed the Customs-FIU Cooperation Handbook to provide practical guidance and enhance collaboration and information sharing between customs and FIUs globally, strengthening the collective ability to combat financial crime In essence, custom services serve as an indispensable front line of defense, using their unique position at national borders to disrupt illicit financial activities and safeguard the integrity of the global financial system. Global customs authorities are crucial in fighting trade-based money laundering (TBML) by controlling the flow of goods, sharing intelligence internationally, and using data analysis to detect anomalies like mis-invoicing.

Their role involves physical inspection to identify red flags, cooperating with financial institutions and Financial Intelligence Units (FIUs), and enforcing harmonized international standards to close loopholes. Customs officials inspect goods at borders to identify suspicious indicators of TBML, such as discrepancies between the declared and actual value or quantity of shipments. They work with other customs agencies, international bodies like the WCO, and national FIUs to exchange information on suspicious activities. Customs authorities use advanced risk profiling and data analysis techniques, including AI and machine learning, to flag anomalies in trade data, such as unusual pricing or shipping routes.  They analyse data to identify "global value gaps," which are unexplained differences between a country's reported imports and exports, as a potential indicator of TBML Global customs authorities ensure compliance with international standards, such as those set by the Financial Action Task Force (FATF), which helps close jurisdictional loopholes.

In summary, Globalcustoms authorities play a key role in combating TBML through various functions: 

• Controlling the flow of goods to identify potential TBML indicators like mis-invoicing or under-shipping and phantom shipment.
• Sharing information with international bodies and law enforcement to combat TBML.
• Reporting suspicious transactions to Financial Intelligence Units.
• Adhering to international standards set by organizations like the Financial Action Task Force.
• Collaborating with the private sector to enhance anti-TBML efforts.

Despite their critical role, customs face significant challenges, including the enormous volume and complexity of global trade, resource constraints (only 1-2% of containers are physically checked), and the need to balance security efforts with trade facilitation. Criminals constantly adapt their methods, such as using new technologies or sophisticated concealment techniques, requiring continuous adaptation and enhanced training for customs personnel. Trade-based money laundering (TBML) schemes are deeply embedded in global trade networks. Successfully tackling this threat requires Customs Authorities to explore new techniques and methodologies, enhance interagency and international cooperation, invest in public-private partnerships, and leverage advanced technology and data analytics.

10. A Critical Review of the Roles of Ghanaian Banks and GRA (Custom Division) as primary gatekeepers in the fight against Trade-Based Money Laundering in Ghana

Trade-Based Money Laundering (TBML) is becoming increasingly sophisticated and damaging in Ghana because criminals exploit the complexity of international trade to disguise illicit funds, often by manipulating invoices for goods. It is damaging because it is hard to detect, as the documentation creates a false sense of legitimacy and is difficult to scrutinize across various data points and international agencies. As other laundering methods become more difficult to use, TBML becomes more attractive to criminals, and its growth, combined with a lack of capacity to fight it, poses a serious threat to Ghana's financial system and economic stability. 

TBML has undermined a country's financial system, eroded trust, and led to volatility in capital flows. Ghana has been experiencing a situation where billions of dollars are quietly slipping through the nation’s international trade system. These are billions of dollars that never show up in imports, duties, or the foreign-exchange ledgers the state relies on.  Neither the banks nor customs divisions of the Ghana Revenue Authority have served as primary gatekeepers in the fight against trade-based money laundering (TBML) by not using their unique positions in the financial and physical supply chains to detect and disrupt illicit activities. Ghanaian Banks have not been the primary line of defense in the financial system. Their role involves monitoring the monetary flow associated with trade transactions to identify suspicious patterns that have not impacted positively in the fight against trade-based money laundering. From rising nature of trade based-money laundering in the country, Banks have not performed thorough due diligence on all customers and their business activities to understand what "normal" transaction patterns look like. This included not verifying the ultimate beneficial owners of companies involved in trade. Ghanaian banks have not monitored payments for anomalies such as inconsistent amounts, unusual payment methods, or frequent transactions with high-risk jurisdictions or entities. As Ghanaian banks are involved in trade financing (like letters of credit), banks should review trade documents (import declaration forms, invoices, bills of lading) for inconsistencies, such as mismatched pricing, quantity, or generic descriptions of goods, to flag potential mis-invoicing. Banks and GRA (Customs Division) critical review of the handling of trade-based money laundering (TBML) in Ghana was due to the prevalence of this method, which exploited complex trade and cross-border transactions, weak institutions as primary gatekeepers, and which is threatening the country’s financial integrity.

Critical review has shown weak enforcement of existing regulations, a lack of transparency, and the vulnerability of the current systems, such as the Import Declaration Form (IDF). Review has been crucial for updating and improving anti-money laundering (AML) frameworks to better align with international standards and effectively combat financial crime. Trade-based money Laundering has been a significant global threat, and its prevalence in Ghana suggests that current systems are not fully effective in preventing it. Banks have historically relied on importers' declarations without independent verification of goods, which created an opportunity for illicit activities. The Import Declaration Form (IDF) framework has been misused, with issues like reusing the same IDF number for multiple transfers or using different IDFs for the same consignment.

Weaknesses in compliance management, lack of risk-based auditing, and poor performance monitoring make the system vulnerable to corruption. Many indigenous banks rely on basic anti-money laundering solutions with limited analytical capabilities, leaving them disadvantaged compared to international trends in using advanced analytics like machine learning. Ghana's Customs Division has struggled to detect TBML due to data fragmentation, reliance on manual processes, and limited staff training on TBML typologies. The high volume of trade and pressure to expedite cargo clearance also contribute to ineffective scrutiny. Ghana depends largely on customs duties and taxes as the major source of revenue for financing the government’s spending. Statistics show that the Customs Division of the Ghana Revenue Authority (GRA) collects 50% of all tax revenue in Ghana (Bajrachaya and Kuo, 2000). The Customs Division of the Ghana Revenue Authority is responsible for the collection of import Duty, Import Vat, Export Duty, Petroleum Tax, Import Excise and other taxes. The customs division also ensures the protection of revenue by preventing smuggling. This is done by physically patrolling the borders and other strategic points, and examination of goods.

As a frontline institution at the country’s borders, the Customs Division also plays a key role in surmounting external aggression and maintains the territorial integrity of Ghana. According to the Ghana Revenue Authority's 2023 annual report, the Customs Division contributed 27%of the total tax revenue for that year. The Domestic Tax Revenue Division accounted for the remaining 73%. In Ghana, for instance, the Customs Division of the Ghana Revenue Authority (GRA) has not been able to achieve revenue targets as a result of challenges confronting the division during clearance. This does not come as a surprise since the core mandate of the Customs Division is the collection of indirect taxes. These taxes include Import duty, Import Value Added Tax (VAT), Export Duty, Petroleum Taxes, Import Excise, among other levies.

In spite of the immense contribution to the country’s financial envelope, there are serious governance challenges associated with the work of Customs Services. Established in 1839, the Custom Exercise Preventive Service (CEPS) was transformed under PNDC Law 144 into a semi-autonomous government agency outside the civil service in 1998 (Kusi 1998; Ghana Customs 2008).

In December 2009, the three tax revenue agencies, the Customs, Excise and Preventive Service (CEPS), the Internal Revenue Service (IRS), the Value Added Tax Service (VATS), and the Revenue Agencies Governing Board (RAGB) Secretariat were merged in accordance with the Ghana Revenue Authority Act 2009, Act 791. The mission of the Customs Division is to collect, account for, and protect customs, excise and other assigned indirect tax revenues in a timely manner while facilitating trade, investment and the movement of people and goods across and within the borders of Ghana (Ghana Customs 2008b).

The Customs Division of the GRA was established under the Ghana Revenue Authority Act 2009 (Act 791) of the Parliament of the Republic of Ghana and is responsible for the collection of international trade taxes, fees, and levies charged on goods entering the country. In addition, the Customs Division is responsible for preventing smuggling and carrying out non-revenue functions such as enforcing laws concerning import and export restrictions and prohibitions. GRA (Custom Division) has played a vital role in combating trade-based money laundering (TBML) by leveraging its position as gatekeepers of international trade to detect anomalies and enforce regulations. They do this by using trade data, conducting inspections, sharing information with other agencies, and building capacity to better identify suspicious activity.

The Customs Division operates on functionary lines referred to as customs regimes, which are related to the classification of goods entering or leaving Ghana. There are nine standard regimes comprising one direct revenue regime, four suspense regimes and four non-revenue regimes. The revenue regime is imports for home consumption, while the suspense regimes are Warehousing, Free Zones, Transit/Trans-shipment, and Temporary imports regimes. The non-revenue regimes are Export5, Temporary Export, Re-export6, and Re-import regimes. (Institute for Fiscal Studies, 2021).  

GRA (Customs Division) had faced challenges in balancing trade facilitation with rigorous security measures. The sheer volume and complexity of global trade have made detecting illicit transactions difficult. In response, international bodies like the World Customs Organization (WCO) and the Financial Action Task Force (FATF) promote cooperation and the use of technology, such as AI, to enhance detection capabilities. A recent study by the Ghana Integrity Initiative, Ghana Anti-Corruption Coalition, and SEND GHANA (GII et al, 2017) revealed that citizens’ actual experiences involving payment of bribes (the most common form of corruption) occurred when they contacted the Customs Division of GRA for services.

With regards to the operation of the Customs Services, corruption occurs where and when officials abuse entrusted power in their interactions with external stakeholders, including Haulers, Freight Forwarders, Importers/Exporters, and other affiliated institutions.  The Customs administration has been confronted with low valuation compliance and the prevalence of falsified trade documents. On 22 July 2018, Graphic Online1 reported that through a grand scheme, some major rice importers in collusion with state officials were taking advantage of the lousy clearance procedures at Ghana’s ports to make away with an average of over US$21 million per year.

The news portal further explained that the importers went about their business mainly through under-declaration and misclassification of products. These and many cases involving the conduct of officials of the Customs Division of GRA have fuelled accusations of the state revenue collector as one of the foremost state institutions where corruption is allegedly prevalent. The Customs administration had usually been confronted with valuation challenges, including the prevalence of falsified trade documents. Submission of falsified invoices and other trade documents constitutes an offence in Ghana, as it often leads to tax evasion by the concerned importer(s) (Ghana Integrity Initiative, August 2018).  Illicit financial flows (IFFs) generated by the artisanal and small-scale gold mining (ASGM) sector in Ghana have historically contributed to trade-based money laundering over the past two decades.

For example, Ghana exported a little more than USD 5.6 billion worth of gold in 2012 and nearly USD 5 billion worth of gold in 2013. Of this, ASGM officially generated 34%, valued at about USD 1.9 billion in 2012 and USD 1.7 billion in 2013 (GHEITI, 2014), although official figures are believed to underestimate the amount of gold illicitly mined by galamsey miners (GHA-CivSoc-110515). One expert estimated that only 30% of gold produced by ASGM operations was mined in compliance with national regulations. The expert contended that both licit and illicitly mined gold are exported through official channels, as well as smuggled out of the country (GHA-Gov-140515). Another interlocutor speculated that ASGM accounts for two-thirds of total gold production in Ghana (GHA-IO-150515).

Applying these theories to 2013 figures, informal ASGM in Ghana may have produced as little as USD 1.2 billion of gold (70% of official ASGM production). On the other hand, it may have produced as much as USD 6.7 billion (if official LSM production accounts for only one-third of total production). This does not account for bribes or other ancillary flows. Also, it is hard to judge how increases in ASGM activity and drops in gold price have impacted the value of the flow.   Ayee, Søreide, Shukla, and Le (2011), for instance, lamented over the GRA’s lack of capacity to value the actual gold produced by the large-scale miners. It was observed that the personnel of the Customs Division of the GRA in charge of the mining companies were not necessarily present in the bullion room to authenticate the shipping documents and monitor the assay of the gold. They were called to validate the records only at the time of sealing the boxes for export. Also, the GRA did not have the facility or capacity to independently verify the weight and quality (fineness) of gold submitted by the large-scale miners.  Import figures of primary destination countries for Ghanaian gold can also be used to estimate the value of flows. Comparing import and export figures indicates what percentage of gold could be smuggled. In 2011, the United Arab Emirates imported 27.6 tons of gold from Ghana. However, Ghana reports exporting only 19.4 t of gold to the same country in the same year (UN Comtrade, 2015).

If all the gold imported to this country that reportedly came from Ghana did in fact originate there, 30% was smuggled out of Ghana. It only entered the formal supply chain upon import to the United Arab Emirates. One could assume that only 70% of gold produced in Ghana is exported through formal channels and 30% is smuggled out of the country.  UN Comtrade data provided in 2011 showed that the United Arab Emirates (UAE) imported 27.6 tons of gold from Ghana. However, Ghana reports exporting only 19.4 tons to the same country in the same year (OECD, 2018). Hunter (2019) then argues that if all the gold imported to this country that reportedly came from Ghana did originate there, 30% was smuggled out of Ghana. Similarly, according to Nwokolo (2019), illegal gold exports to the UAE, suspected to be carried in hand luggage on planes, have raised concerns, especially after the former Ghanaian President Nana Akufo-Addo observed a $5 billion discrepancy between trade statistics and actual gold exports in 2017.

There was also broad consensus among interlocutors that gold is not being used to launder money within West Africa. However, this does not mean that ASGM gold mined in West Africa is not used to launder money elsewhere. Adept criminal enterprises will actively seek to insulate their criminal activities by intermingling legitimate and illegal interests. They will exploit financial products and sectors perceived to be more lightly regulated than other areas (AUSTRAC, 2013). Over the period between 2019-2024, about $42 billion was said to be have been taken out of this country without the corresponding imports coming into the country,” this revelation made by His Excellency, President John Mahama when he addressed the press on His maiden media encounter on Wednesday, September 10, 2025, this statement had validated that Ghanaian banks and GRA (Customs Division) had abdicated their roles as the primary gate keepers in the fight against money laundering and terrorist financing. The President revealed that US$42 billion trade-based money laundering called ‘Phantom Shipment’ had been conducted through the main gatekeepers (Commercial Banks and Ghana Revenue Authority (Customs Division).

The Finance Minister, Hon Dr Ato Forson, in the Budget Statement on 13^th November 2026, announced an extensive abuse within Ghana’s Import Declaration System, resulting in billions of US$ being illicitly moved abroad under the guise of legitimate trade. He further disclosed that between April 2020 and August 2025, over 525,000 transactions totaling US$83 billion were processed through the Import Declaration Form platform, and shockingly, only 10444 transactions totaling US$52 billion were linked to actual imports, meaning that US$31 billion left the country with no corresponding goods. The above revelations affirmed that there are major weaknesses in the Banks and the Ghana Revenue Authority (Custom Division) as the primary gatekeepers in the fight against trade-based money laundering.

The trade finance sector in Ghana has historically been heavily reliant on paper documents (invoices, bills of lading, etc.), which were easily falsified, difficult to verify, and hard to integrate into automated monitoring systems. Trade-based money laundering requires a blend of financial compliance knowledge and expertise in international trade practices and specific commodities. Some Ghanaian bank staff lacked this cross-discipline expertise, made it difficult to spot red flags like unusual pricing or commodity types. Criminals in the global trade had developed new, sophisticated methods, such as using shell companies, third-party intermediaries, and phantom shipments, which made it challenging for banks to keep pace with new risk typologies. The massive illicit flows of foreign exchange had negative implications for the country's foreign reserves, cedi depreciation as well as higher inflation in the overall economy.  

The prevailing Trade-Based Money Laundering (TBML) in Ghana has highlighted significant weaknesses in the banking system's ability to act as a primary gatekeeper against illicit financial flows. TBML involves using legitimate trade transactions to disguise the proceeds of crime, often through methods like over- or under-invoicing and phantom shipments. Many banking institutions in Ghana have implemented inadequate or ineffective Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) controls, such as poor customer identification procedures and transaction monitoring systems. There has been a general shortage of specialist expertise within banks to investigate and detect the complex, cross-disciplinary nature of TBML schemes, which require knowledge of both finance and commodity markets. Many banks lacked advanced technology like artificial intelligence (AI) and machine learning (ML) solutions that are necessary to analyze the massive volume of trade data and spot anomalies effectively.

A culture that sometimes prioritizes business growth and expedited transaction clearance over rigorous due diligence had created opportunities for criminals to exploit the system. Some banking institutions displayed a culture that prioritized business growth and profit over rigorous compliance checks. These vulnerabilities have allowed for massive illicit financial flows, with one analysis suggesting that between April 2020 and August 2025 alone, commercial banks in Ghana facilitated approximately US$20 billion in foreign transfers that lacked corresponding imports. His Excellency the President John Mahama statement on the phantom shipment of US$42 billion had clearly validated that Ghanaian banks had failed woefully as primary gatekeepers in the ML/CFT space due to insufficient training, the constantly evolving and sophisticated nature of financial crimes, and a focus on balancing risk versus profit, which sometimes led to a lack of enforcement. Banks have failed as the primary gatekeepers in the Money Laundering (AML) and Counter-Financing of Terrorism (CFT) space due to inadequate technology, insufficient resource allocation, and weak internal controls and poor governance.

The weaknesses in Ghana's banking system that allowed prevailing Trade-Based Money Laundering (TBML) include weak anti-money laundering (AML) controls, inadequate staff expertise and resources, poor technology, weak regulatory oversight, and limited inter-agency data sharing. These systemic failures led to banks facilitating massive illicit financial flows through schemes like fraudulent invoices and phantom shipments Poor regulatory oversight Bank of Ghana and Financial Intelligence Centre by had significantly contributed to the arising of money laundering (ML) and terrorist financing (CFT) by creating vulnerabilities and loopholes within the financial system that criminals can exploit. Inconsistent regulatory enforcement and penalties diluted deterrence, emboldening illicit activities.

Regulatory enforcement agencies lacked effective tools for real-time monitoring and analysis. Poor data sharing between key gatekeepers, such as banks, Bank of Ghana, Financial Intelligence Centre (FIC), and GRA (Customs Division), had created significant blind spots that criminals exploited. Weak oversight meant banking institutions had implemented inadequate or ineffective anti-money laundering and counter-terrorist financing (AML/CFT) controls, such as poor customer identification procedures and weak transaction monitoring systems. Poor regulatory oversight highly correlated with weak internal governance arrangements within some Ghanaian banks, including a lack of clear accountability and high staff turnover in key compliance functions, which further compromises risk management. Trade-based money laundering has emerged as the new front in West Africa’s fight against illicit finance, as regulators warn that criminal networks are exploiting trade and banking systems to move billions of dollars across borders undetected. The problem’s scale is staggering. Data by Business & Financial Times revealed that between April 2020 and August 2025 commercial banks in Ghana alone facilitated about US$20 billion of foreign transfers without corresponding imports.

The transactions, representing roughly GH¢31billion, were made through import declaration forms that failed to meet documentation thresholds set by the Bank of Ghana. Some financial analysts have said that several banks processed multiple transfers for the same clients despite red flags, suggesting weak compliance oversight. Less than two percent of all transfers during the five-year period were matched with actual imports, resulting in about GH¢22.6billion of estimated revenue losses from unpaid duties and taxes (Amalanu, BFt /06/11/2025). Recent investigations have revealed extensive TBML schemes, including "phantom shipments" and falsified invoices, that have led to billions of dollars in lost government revenue and weakened Ghana's foreign exchange reserves. One BFt's research documented approximately US$20 billion in foreign transfers by commercial banks between April 2020 and August 2025 that did not have corresponding imports. This Phantom Shipment of US$42 billion clearly showed that Ghanaian banks have failed woefully as primary gatekeepers in the ML/CFT space due to insufficient training, the constantly evolving and sophisticated nature of financial crimes, and a focus on balancing risk versus profit, which sometimes led to a lack of enforcement. Banks have failed as the primary gatekeepers in the Money Laundering (ML) and Counter-Financing of Terrorism (CFT) space due to inadequate technology, insufficient resource allocation, weak internal controls and poor governance. Poor regulatory oversight had significantly contributed to the arising of money laundering (ML) and terrorist financing (CFT) by creating vulnerabilities and loopholes within the financial system that criminals can exploit. Weak oversight meant financial institutions (FIs) had implemented inadequate or ineffective anti-money laundering and counter-terrorist financing (ML/CFT) controls, such as poor customer identification procedures and transaction monitoring systems.

Customs Division of Ghana Revenue Authority had operated at the physical borders, but not made them indispensable in controlling the actual movement of goods and identifying discrepancies between cargo and documentation. On corruption and corruption related issues with Customs Division, Office Special Prosector (OSP) on the 15/08/2022, published investigation report against Labianca Company Limited and Customs Division of Ghana Revenue Authority. A major finding of investigation report led to the recovery of GHC1,047, 627.15  was that the conduct of the investigated customs officers that portended institutionalized culture of lighthearted unconcern   regarding impropriety of action at Customs Division -which indicated a propensity to engender corruption and corruption related activities and that the customs officers ignored the mandatory provisions of the Customs Act 2015 Act 891 and engaged their own predilections  (OSP Report/15/08/2022).

Exhortations (demands) and corruption in the Ghana Revenue Authority (GRA) Customs Division included alleged practices like illegal demands for money from importers and officers demanding payment, sometimes called "exhortations" These issues are linked to systemic problems such as a culture of unconcern for impropriety. On the 27/11/2025, the Ghana’s Traders Advocacy Group issued a statement on widespread extortion by members of the Customs Division under the Ghana Revenue Authority operating in Ashanti region. A group called TAGG alleged that a Customs task force officer intercepted containers after they were lawfully cleared in Accra and demanded GH¢120,000 from the importer, eventually accepting GH¢40,000 in mobile money and cash.

Poor regulatory oversight highly correlated with weak internal governance arrangements within some Ghanaian banks, including a lack of clear accountability and high staff turnover in key compliance functions, which further compromises risk management. Key challenges in combating trade-based money laundering (TBML) in Ghana included the exploitation of high-risk sectors like import/export, real estates and fintech, coordination issues among regulatory agencies, and capacity limitations in investigation and supervision. Experts also note the exploitation of trade and banking systems by criminal networks to move billions of dollars across undetected borders. Other challenges to combating trade-based money laundering (TBML) in Ghana included complex and often inadequate international trade regulations, which created loopholes for criminals, and a lack of consistent data andenforcement among various institutions. Limited training in forensic and digital investigations had hampered the process. Judicial and investigative delays had not impacted convictions positively and overall deterrence.

Other key challenges include the sophisticated nature of TBML methods, which were designed to be difficult to detect, and a need for more robust public-private partnerships and advanced technology for monitoring. High-risk sectors in the trade- based money laundering space in Ghana include import/export, extractive industry and fin-tech and cash-based economy. The import and export sectors, including vehicle dealerships, are often unregulated and susceptible to manipulation by money launderers. Methods like over- and under-invoicing goods are used to move illicit funds. Ghana's extractive sector is vulnerable to illicit financial flows, leading the government to launch a joint action plan in October 2025 to tackle the issue.  The gold sector is undergoing reforms to bolster anti-money laundering efforts. The rapid rise of fintech, driven by mobile money and digital payments, presents new money laundering risks. A persistent cash-driven economy also complicates the monitoring of transactions. Weaknesses in the Ghana Revenue Authority (GRA) Customs Division in fighting trade-based money laundering (TBML) included limited institutional capacity, uneven enforcement, and technological gaps.

The complexity of international trade, coupled with challenges in information sharing between institutions and potential collusion among customs officers, further complicates anti-TBML efforts.

 GRA has faced significant challenges in combating trade-based money laundering (TBML) due to the sheer volume of global trade, the complexity of transactions, and vulnerabilities in the international trade system. Criminals exploited these complexities through techniques like mis-invoicing goods, using shell companies, and falsified documents, made TBML difficult to detect and distinguish from legitimate commerce. Key obstacles that have hindered GRA's efforts against TBML included, limited resources and high volume, complexity and opaqueness of transactions, technological and training gaps, third-party exploitation and lacked of specialized knowledge and resources. GRA often lacked the personnel, technology, and funding to effectively monitor the massive volume of goods crossing borders. This has forced them to balance inspections with the need to quickly clear legitimate shipments. TBML had been embedded within legitimate trade activities, utilizing intricate supply chains and multiple intermediaries to conceal the origin and destination of illicit funds. This complexity overwhelmed traditional monitoring and detection methods. A key weakness had been the fragmented nature of data and limited information sharing between customs authorities, banking institutions, and law enforcement agencies, both domestically and internationally.

This has created information silos that criminals had exploited. Legacy systems and reliance on manual processes had limited GRAs' ability to analyze large datasets and identify suspicious patterns.  Criminals had used third-party intermediaries across multiple jurisdictions like China and other Far East Countries to obscure financial trails, making it difficult for customs or financial institutions to track illicit funds. Customs staff had relatively low knowledge of TBML red flags and typologies compared to other forms of money laundering. GRA frequently faced resource constraints, making it difficult to conduct complex and expensive international investigations or utilized advanced analytical tools. GRA has a dual mandate: to facilitate the smooth and timely flow of legitimate trade and to deter illicit trade. The pressure for fast customs clearance often clashes with the need for thorough due diligence, forcing a constant balancing act between speed and compliance.

TBML schemes had been complex, involving multiple jurisdictions, shell companies, and layers of transactions designed to obscure the money trail. Criminals frequently had used a combination of techniques (over-invoicing, under-invoicing, mis-declaration of goods, phantom shipments) to disguise the origin of funds, which traditional monitoring systems are not adequately equipped to detection. The President revealed that US$42 billion trade-based money laundering called ‘Phantom Shipment’ that had been conducted through the two main gatekeepers that the banks and customs. From the His Excellency the President John Mahama the two main gate keepers failed to prevent the US$ 42 billion phantom shipments. On 7^th November 2025 editorial data reviewed by Business & Financial Times showed that between April 2020 and August 2025 commercial banks in Ghana alone facilitated about US$20billion of foreign transfers without corresponding imports. The transactions, representing roughly GH¢31billion, were made through import declaration forms that failed to meet documentation thresholds set by the Bank of Ghana. Less than two percent of all transfers during the five-year period were matched with actual imports, resulting in about GH¢22.6billion of estimated revenue losses from unpaid duties and taxes.

The President His Excellency John Mahama statement and Business Financial data analysis had validated the magnitude of TBML in the country. This is clear evidence of the failure on the part of the two main gate keepers (Banks and GRA) in their fight against TBML.  Data silos and limited information sharing were two of the major weaknesses in the fighting against TBML in the country. The data needed to combat TBML had been scattered across different domestic sectors (customs, financial intelligence center, banking institutions, shipping companies) in the country. Limited cooperation and legal/privacy barriers often prevent timely and effective information sharing, creating "blind spots" that criminals exploit. Some Ghanaian banks have facilitated foreign transfers without corresponding imports, suggesting massive gaps in due diligence. Weak anti-money laundering (AML) controls, insufficient training for staff, and under-resourced compliance units have been cited as contributing factors. Ghana Revenue Authority (Customs Division) had struggled to balance its revenue collection and trade facilitation mandates, physical verification of goods, hampered by data fragmentation, reliance on manual processes, and corruption risks. This has led to mis-declared cargo and discrepancies in trade statistics.

TBML, primarily through trade mis-invoicing, resulted in substantial losses in government revenue from unpaid duties and taxes. In Ghana alone, an estimated US$20 billion of foreign transfers were made without corresponding import documentation between April 2020 and August 2025, leading to significant tax evasion. Large, unpredictable flows of laundered money led to volatility in exchange rates and interest rates in 2020 to 2024, made it difficult for Ministry of Finance and other authorities to maintain control over economic policy and led to phenomena like the "Dutch disease," where traditional exports lose competitiveness.

The involvement of Ghanaian banking institutions in TBML schemes could have led to severe reputational damage,  and a loss of investor confidence, exposing weaknesses in country’s financial system

The rising trade -based money laundering (TBML) in Ghana over the past decade could be attributed to the abolishing of the five destination inspection companies since September 2015. Available data showed that Customs Division of the Ghana Revenue Authority (GRA) took over the operations of destination inspection companies (DICs) in the country by September 1, 2015 and records revealed that trade based- money laundering had been on ascendancy since the abolishing of destination inspection scheme. DICs verified the price and quality of imports, which helped to ensure the correct amounts of duties and taxes was collected. By providing accurate valuation reports, DICs helped reduce revenue leakages that occurred in the previous manual system. DICs contributed to streamlining import processes, a function that was later enhanced by the development of a single window system. The DICs were part of the transition from a manual system to more automated and technology-driven processes at the ports. By inspecting imported goods, DICs aimed to ensure compliance with required standards and prevent sub-standard products from entering the country, thereby safeguarding consumers. DICs were engaged to assist with the classification and valuation of goods, which was intended to improve the assessment and collection of customs revenue and plug leakages. Reports from 2013 indicated that the DIC operations had led to improvements in government revenue.

 From 1970 to 2000, Ghana used a ‘pre-shipment inspection (PSI)’ regime for goods being imported into the country. Classification was done primarily by accredited testing agencies in the country of export before the goods arrived in Ghana. However, problems related to pre-shipment inspection activities became more and more pronounced over the years, forcing the authorities to begin licensing local companies from the year 2000 to undertake a ‘destination inspection (DI)’ regime instead. These companies were mandated to classify all goods that arrived in the country. The introduction of the Scheme (Destination Inspection Scheme) brought in its wake the reduction in clearance time, training and transfer of know-s to officers and other stakeholders, savings interventions to the tune of over US$ 648 million in a single year modernization of the clearance system through the introduction of state-of the-art technology and reduction in the proliferation of fake and illicit drugs (Republic Newspaper's Post, 04/06/2013).

The abolishing followed the then government’s communication to the World Customs Organization (WCO) on its decision to scrap the operations of DICs, in line with plans to enhance the coordination of border management arrangements with other government agencies. In Ghana, the concept of destination inspection was introduced by the government in 2000 to replace the pre-shipment inspection system which involved the inspection of imports before shipment from the country of supply.  Destination Inspection company on January 2nd, 2003. It was one of the five destination inspection companies mandated by the Government of Ghana, specifically to perform customs destination inspection of imported goods from allocated geographical areas.  Gateway Service Limited was first company engaged to undertake destination inspection in the country in 2003. There were five DICs operating in Ghana that operated in Ghana until September 2015 when then Government abolished under auspice of World Custom Organization. They were BIVAC International, Gateway Services Limited, Ghana Link Network Services, Webb Fontaine Ghana Limited and Inspection Control Service. Destination inspection was a concept which was introduced to enhance customs functions as a stop-gap measure while waiting for reforms and modernization. Destination inspection companies in Ghana provided benefits such as ensuring imports comply with standards, protecting consumers from substandard or fake goods, and generating revenue for the government by preventing fraud like over-invoicing and wrong tariff declarations. They helped to speed up the clearance of goods for honest importers by using risk-based systems to focus on high-risk shipments. They also minimized revenue loss to the state by accurately verifying the value and classification of imported goods.

They combated trade fraud through measures like checking for over-invoicing, phantom shipment and under-invoicing. They reduced the need for physical inspection of goods and created a modern, efficient system for verifying imports.  Destination Inspection Companies (DICs) in Ghana did provide benefits such as increased government revenue through the verification of imports, enhanced public health and safety by preventing substandard goods, and more streamlined trade processes via technology. The government eventually took over the functions of the DICs in 2015 to fully integrate and improve customs operations. Overall, the operations of destination inspection companies provided a structured and modernized approach to import inspection, supporting both government fiscal goals and the broader trade environment in Ghana.

11. Methodology

A review of publicly available reports, case studies, recent secondary data and literature on TBML from a variety of Ghana and international contexts comprised the methodology. However, due to the dearth of literature on TBML details/information in the Ghanaian context, international case studies have been analysed. More critically, there are no precise estimates of TBML or defined protocols for collecting and maintaining TBML data. As a result, the FATF potential TMBL typologies were analysed, and typical TBML procedures were examined to identify the rising trade based-money laundering in Ghana

A review of publicly available reports, case studies, secondary data and literature on TBML from a variety of Ghana with specific case studies of the recent phantom shipment of US$42 billion to reveal red flags and systemic weaknesses. Deep dives into specific instances of TBML (e.g., extensive abuse within Ghana’s Import Declaration System, resulting in billions of US$ billion being illicit moved abroad under the guise of legitimate trade, and systemic failures.  Business & Financial Times recent report revealed that between April 2020 and August 2025 commercial banks in Ghana alone facilitated about US$20billion of foreign transfers without corresponding imports. The transactions, representing roughly GH¢31billion, were made through import declaration forms that failed to meet documentation thresholds set by the Bank of Ghana. Less than two percent of all transfers during the five-year period were matched with actual imports, resulting in about GH¢22.6billion of estimated revenue losses from unpaid duties and taxes. To examine the extent to which Ghana’s trade- based money laundering reports information online, and other review covered the Global Financial Integrity (GFI) reports from 2008-to 2017 on the Ghanaian international trade space. Ayee, Søreide, Shukla, and Le (2011) for instance, lamented over the GRA’s lack of capacity to value the actual gold produced by the large -scale miners. It was observed that the personnel of the Customs Division of the GRA in charge of the mining companies were not necessarily present in the bullion room to authenticate the shipping documents and monitor the assay of the gold.  Cobham and Jansky (2017) do present specific data points related to trade mis-invoicing and its impacts in their work; however, their definition of trade mis-invoicing is actually broader than the one provided, encompassing several methods for manipulating transaction values, including those intended to shift money across borders for tax evasion or money laundering purposes in Ghana. As identified in the previous chapter, Baker et al. (2014) highlight four strands of trade mis-invoicing. Export under-invoicing occurs when the amounts of exports leaving a country are under-reported to evade or avoid taxes on corporate profits in the country of export by having the difference in value deposited into a foreign account in Ghana. Graphic Online (2018) on how rice importers are evading a yearly $21m tax at Tema port; Graphic Online report of 10/9/2025 on President John Dramani Mahama has revealed a shocking abuse of Ghana's foreign exchange system, where over $42 billion exited the country in the past four years through payments for imports that never arrived.

Business & Financial Times report dated (7/11/2025 revealed that between April 2020 and August 2025 commercial banks in Ghana alone facilitated about US$20billion of foreign transfers without corresponding imports. Ghana has lost billions of dollars and cedis through the suspected abuse of Import Declaration Forms (IDFs), Finance Minister Dr. Cassiel Ato Baah Forson also revealed while presenting the 2026 Budget in Parliament on 15/11/2025. Between April 2020 and August 2025, more than 525,000 transactions worth US$83 billion were processed through the Integrated Customs Management System (ICUMS). Only 10,440 of these transactions were linked to actual imports. An estimated US$31 billion was transferred abroad with no goods imported, draining foreign reserves and weakening the Ghana cedi. The audit also revealed that some importers under-declared the value of imports by about GH¢76 billion, denying the government approximately GH¢11 billion in potential revenue. Based on the available data content and analysis options, the study primarily focuses on TBML risks, risk indicators and techniques including phantom shipments, Import Declaration Form (IDF) misrepresentation in Ghana's international trade involves several fraudulent schemes, including transferring money for goods that are never imported, under-invoicing goods to pay lower duties, andover-invoicing imports to send more money abroad.

 12.0.  Discussion of Findings

The findings on trade-based money laundering (TBML) in Ghana had highlighted its intricate nature and the many factors contributing to its complexity. Firstly, the volume of international trade has presented a challenge for conducting transactional due diligence, therefore hindering the detection of suspicious transactions. Furthermore, the absence of standardized associated trade data, comprising language and format variations, had impeded reliance on trade anomalies as an effective detection mechanism. Secondly, the diversity of goods involved in trade transactions, coupled with limited expertise among Customs Officers concerning each specific commodity, made it difficult to identify abnormalities in trade patterns.

The complexity had been exacerbated further by porous cross-border transactions and the use of trade-finance instruments, such as open account trading and consignment sales, and waybills. These instruments had obscured the true value of goods or the identity of parties involved in the transaction, thus adding a layer of complexity to TBML investigations. Lastly, with limited resources dedicated to the primary gatekeepers to trade-based money laundering (TBML) detection, inadequate regulatory frameworks, and jurisdictional differences have contributed to the complexities associated with the phenomenon (Ghana Integrity Initiative, August 2018). Literature, on the other hand, shows that a large quantity of money has been laundered using TBML in Ghana over the past decade. Ghanaian banks and the Ghana Revenue Authority (Customs Division) have failed as primary gatekeepers in the fight against trade-based money laundering due to insufficient training, the constantly evolving and sophisticated nature of financial crimes, and a focus on balancing risk versus profit, which has sometimes led to a lack of enforcement. Banks had failed as the primary gatekeepers in the Trade-based Money Laundering (TBML) and Counter-Financing of Terrorism (CFT) space due to inadequate technology, insufficient resource allocation, a lack of in-depth knowledge of the typologies in TBML, and weak internal controls and poor risk governance.

These systemic issues were often amplified by pressure to increase revenue and cut costs, which disincentivizes thorough compliance. This failure stemmed from shortcomings in their anti-money laundering (AML) and counter-financing of terrorism (CFT) compliance, which allowed criminals to abuse bank services. Ghanaian banks had failed as gatekeepers as a result of weak due diligence, insufficient monitoring, poor compliance systems,a lack of enhanced due diligence, technological challenges, and resource and skills deficit in international trade finance. Ghanaian banks had not adequately monitored transactions for suspicious activity, allowing funds from criminal activity to pass through accounts undetected.

It is a recognized concern that some Ghanaian banks have exhibited systemic weaknesses and negligence in monitoring transactions for suspicious activity, allowing potential criminal funds to pass through accounts undetected. This has led to substantial financial losses and prompted the central bank to implement stricter anti-money laundering (AML) measures. A major vulnerability involves criminal networks exploiting the trade and banking systems. Between April 2020 and August 2025, commercial banks in Ghana facilitated about US$20 billion in foreign transfers without corresponding import documentation, suggesting weak compliance oversight in some institutions.

Some banks had not performed thorough background checks on clients or verified the source of funds, and enhanced due diligence, which are key requirements for preventing trade-based money laundering. While Sup-tech solutions existed to improve compliance, their implementation has been hampered by a lack of in-house expertise, insufficient oversight, and the use of unsuitable off-the-shelf solutions. There had been a lack of resources, training, and skilled staff that had hindered effective AML/CFT implementation within banking institutions. These failures often stem from inadequate controls, poor governance, and deficiencies in monitoring systems. Forexample, Ghana International Bank PLC, London.The bank was fined £5.8 million by the UK FCA in 2022 for failings in AML controls.

Ghanaian banks had faced key challenges in addressing trade-based money laundering (TBML) in  Ghana, including poor inter-agency cooperation, technology gaps, and the difficulty of detecting illicit funds disguised within legitimate international trade. Banking institutions have also been criticized for failing to share timely information with the Financial Intelligence Centre (FIC) during investigations. Other challenges Ghanaian Banks had faced in combating trade-based money laundering (TBML) in Ghana include data integration and volume, as authorities lacked the ability to link financial flows with trade data, and the sheer volume of trade documents makes detection difficult. Other issues include a fragmented regulatory environment where customs authorities could not conduct money laundering investigations, weak enforcement and risk assessment due to a lack of standardization and awareness, and a reliance on international cooperation, which can cause delays.

Some banks in the country have faced data and technology challenges like a lack of data integration, high volume of data, and inadequate systems.  Some of Ghanaian banks only vouched for payment flows, while customs see trade data. The research findings suggest that some banks processed multiple suspicious transfers for the same clients despite clear red flags, pointing to a lack of robust internal controls and a potential "systemic failure" in governance.

Without a way to integrate these two sets of information, it is difficult to spot inconsistencies. The massive number of trade-related documents (invoices, bills of lading, Airway bills, certificates of origin, etc.) made it a challenge to manually review everything for potential fraud.   There has been a lack of systems capable of cross-referencing trade and trade finance data to identify suspicious activity. There has been a general lack of awareness and training on TBML among staff involved in trade processing. Also lacked a clear policy and inconsistent approaches to risk assessment, with no specific risk assessments for trade finance money laundering. Banks’ legacy systems had struggled to keep up with high-volume trade transactions and instant payments, which had made it difficult to detect TBML.

Documentation complexities in trade-based money laundering have made it difficult for banks to detect.   According to Nwokolo (2019), illegal gold exports to the UAE, suspected to be carried in hand luggage on planes, have raised concerns, especially after the former Ghanaian President Nana Akufo-Addo observed a $5 billion discrepancy between trade statistics and actual gold exports in 2017.  The recentB&Ft confirmation of more than GH¢22.6billion in tax revenue was lost by the state between April 2020 and August 2025 due to widespread under-declaration of imports and unverified foreign exchange transfers tied to Import Declaration Forms (IDFs). His Excellency President John Mahama’s recent revelation of phantom shipment of US$42 billion foreign transfers points to several key challenges, including limited data sharing, a lack of specialized knowledge among staff, the sheer volume and complexity of global trade, and the difficulty in detecting TBML, which were often embedded within legitimate commerce.

The above statements have validated the rising trade-based money laundering over the past decade, which has contributed US$31 billion abroad with no goods imported.  The abuse of Import Declaration Forms over the past five years confirmed the magnitude of the trade-based money laundering space in the country. This statement confirmed that some banks do not know the usage of IDF. Single IDF is meant for a single transaction, not for multiple transactions, and it is not the only international document used in payment of funds abroad.

This case shows a clear lack of knowledge in international trade documentation, as a single IDF and pro-forma invoice could only be used for the advance payment of US$200,000 for a single import, not multiple transactions. As of July 1, 2024, the Bank of Ghana amended its regulations on advance payments for imports. The maximum amount for advance payment was increased from $50,000 to $200,000 per transaction, per importer, and Import Declaration Form.  Advance payment is a method of international trade where the buyer places funds at the disposal of the seller before the shipment of the goods or services is made. The Bank of Ghana (BoG) increased the maximum advance payment for imports to $200,000 per transaction, effective July 1, 2024, a significant increase from the previous $50,000 limit. Importers must submit required documents, including a customer instruction, a valid Import Declaration Form (IDF), and an invoice.

An undertaking is also required to submit clearing documents within 90 days for general merchandise or 180 days for capital goods, with the latter potentially extendable. How on earth could a bank transfer foreign exchange tied to the multiple uses of a single Import Declaration Form? The losses stemmed from a pattern of foreign payments made for goods that were either never imported, under-invoiced, or supported by falsified documentation, clearly showing the weakness within.  Ghana had lost billions of dollars and cedis through the abuse of Import Declaration Forms (IDFs), and it was estimated to be US$31 billion was transferred abroad with no goods imported, draining foreign reserves and weakening the Ghana cedi. Both banking institutions and the Customs Division of the Ghana Revenue Authority had failed to prevent the abuse of such magnitude. The volume and complexity of international trade make it difficult to detect all illicit transactions, especially those involving misrepresentation of goods, phantom shipments, or the reuse of documentation. There is a lack of expertise and good practices in modern technology needed for effective risk management.

The Ghana Revenue Authority (Customs Division) had faced challenges in combating Trade-Based Money Laundering (TBML) due to data and technology gaps, lack of cross-agency collaboration, capacity and training shortfalls, and the pressures of high trade volumes and potential corruption. These issues include fragmented data, reliance on manual processes, insufficient anti-money laundering expertise, and pressure to expedite trade, which has hindered thorough enforcement.

Limited information sharing between the Ghana Revenue Authority (Customs Division), 23 Banks, the Financial Intelligence Center, and the Bank of Ghana had created gaps in oversight. Bribery and collusion had opened doors for under-declaration and misclassification of goods, undermining enforcement. It has been difficult for GRA to detect TBML because criminals embedded illicit activities within complex, multi-layered international supply chains. These had often been involved in misrepresenting invoices, manipulating quantities, or using shell companies. Criminals have been increasingly using sophisticated tools, including artificial intelligence, to carry out TBML, which requires authorities to continuously update their detection methods. The sheer volume of trade documentation, including customs records and invoices, overwhelms manual or rule-based monitoring systems. Banking institutions often only have visibility into payment flows, not the underlying trade activity itself.

The primary weaknesses in the Ghana Revenue Authority (GRA) Customs Division in fighting Trade-Based Money Laundering (TBML) stemmed from systemic inefficiencies, human factors like corruption, and technological limitations. General systemic inefficiencies in port operations have created loopholes that hinder effective tax collection and allow illicit activities to flourish. These issues often create environments conducive to complex TBML schemes. The Customs Division has been identified as a public institution with a prevalence of perceived corruption.

This could have led to the deliberate misclassification or misinvoicing of goods in return for bribes, allowing illicit funds to enter the financial system undetected. Inadequate use of technology and a lack of data analysis by GRA (Custom Division) could have hampered the fight against trade-based money laundering. While technology is being deployed, an ongoing challenge has been the optimal use of AI, advanced cargo manifest systems, and other digital tools to effectively monitor and flag suspicious transactions. The use of sophisticated tools by criminals, such as artificial intelligence, puts a strain on enforcement agencies that may not be as technologically advanced. TBML thrives when data is fragmented across different entities, and inadequate technology makes it difficult to detect.

Ghana's Customs authority has been unable to prevent trade-based money laundering due to factors like the inherent complexity of modern trade, which can be exploited through methods such as misrepresenting goods and phantom shipments, and a lack of specific mechanisms to counter cross-border financial crimes. Additionally, insufficient capacity, vulnerabilities in administrative processes, a high volume of trade, and the exploitation of legal loopholes like free trade zones contribute to this difficulty.

'Ghana’s Customs authority has been unable to prevent trade-based money laundering (TBML) due to technology gaps, limited real-time data sharing between agencies, insufficient staff capacity, inconsistent enforcement, and corruption.

The Customs division lacked advanced analytics and artificial intelligence to spot anomalies within large datasets. Its manual, legacy-based systems are vulnerable to falsified documents, enabling schemes like under- and over-invoicing and phantom shipments. There has been limited real-time data sharing between Customs, commercial banks, the Financial Intelligence Centre, and other agencies. This fragmentation made it difficult to cross-check trade data against payments and shipment records to detect discrepancies.  Staff training on TBML methods, commodity pricing, and complex cross-border schemes is insufficient.

The high volume of trade, combined with resource limitations, puts pressure on officials to clear cargo quickly, limiting thorough checks. Bribery and collusion within the Customs division have been reported, allowing for mis-declared cargo and under-declaration of imports. The discretion afforded to senior officials and informal influence on decision-making further enable illicit activities. Challenges to combating trade-based money laundering (TBML) in Ghana included weak oversight and controls, a lack of integrated data systems between agencies like Customs and banks, technology gaps that prevent advanced analytics, and a shortage of cross-disciplinary expertise. Other challenges include the difficulty of regulating sectors like real estate and car dealing, the potential for collusion, and the fact that TBML techniques like mis-invoicing are hard to detect and exploit gaps in legitimate trade processes. Insufficient controls and oversight in banks and Customs allowed for illicit transfers and phantom shipments to go undetected. Customs, banks, the Financial Intelligence Centre, and tax authorities often did not share real-time data effectively, creating information gaps. There has been a shortage of professionals with the necessary cross-disciplinary knowledge in trade, commodities, and financial crime to investigate TBML effectively.

The Ghana Revenue Authority (Customs Division's dual mandate to collect revenue and facilitate trade has created a balancing act that has been undermined by high revenue targets and pressure to expedite clearances.

These systemic weaknesses allowed criminals to hide illicit funds within complex international trade transactions. There have been significant discrepancies discovered between foreign transfers and actual imports due to insufficient data matching and analysis. Perpetrators in the trade-based money laundering had used sophisticated methods like multiple invoicing, over- and under-invoicing, phantom shipments, and misrepresentation of quality/quantity to launder money. Detecting these complex schemes requires specialized skills and tools that may not be universally available or applied within the division.

Criminals had consistently sought and exploited loopholes, often using sophisticated methods like multiple invoicing, over- and under-invoicing, and phantom shipments as a result of the failure of banks and the Ghana Revenue Authority (Customs Division) as the primary gatekeepers in the fight against trade-based money laundering in the country. Criminals have increasingly used complex legal structures and sophisticated methods to obscure their transactions. Ghanaian institutions had limited institutional capacity to fight trade-based money laundering. The GRA (Customs Division) and Ghanaian banking institutions dealing with financial crime had contended with constraints that include limitations in human and institutional capacity.  GRA (Customs Division) had not been fully successful in the fight against Trade-Based Money Laundering (TBML), considering the United Arab Emirates (UAE) imported 27.6 tons of gold from Ghana instead of the recorded shipment of 19.6 tons (OECD, 2018), thus led to an unaccounted of 8tons of Ghanaian gold.  

His Excellency President John Mahama’s recent revelation of phantom shipment of US$42 billion and BFt 06/11.2025 report of US$20billion of foreign transfers point to several key challenges, including limited data sharing, a lack of specialized knowledge among staff, the sheer volume and complexity of global trade, and the difficulty in detecting TBML, which were often embedded within legitimate commerce. Complexity and volume of global trade have made it difficult for GRA to fight against trade-based money laundering over the past decade.

The enormous scale and complexity of international trade, involving numerous parties, jurisdictions, and large transaction volumes, made it nearly impossible to manually monitor every transaction effectively. Lacking specialized expertise and competencies had made it difficult for GRA (Customs Division) to fight against TBML. Customs and law enforcement staff often had relatively low knowledge of specific TBML typologies and trade finance mechanisms compared to other forms of money laundering. Detecting anomalies like unusual pricing (over- or under-invoicing) requires specialized knowledge of prevailing market prices, which has posed a challenge for certain types of commodities. The study has shown that the failure of GRA to use AI-based models, particularly Neural Networks and Random Forests, has made it highly ineffective in detecting trade-based money laundering activities. These models could process large, high-dimensional trade data and identify suspicious patterns of behavior that may not be immediately obvious.

The lack of integration of real-time monitoring with predictive analytics had reduced the ability of GRA to detect and prevent trade-based money laundering in the country. AI and machine learning could have been integrated into global supply chains to improve the detection of trade-based money laundering (TBML). By GRA analyzing trade transaction data and identifying anomalous patterns, AI could have significantly enhanced the effectiveness of anti-money laundering (AML) regulations. The GRA (Customs Division) did not demonstrate that Neural Networks and Random Forests could have provided the best performance for detecting fraudulent transactions, while blockchain technology offers additional benefits in terms of transparency and transaction traceability. Historically, GRA’s AML compliance relied on manual audits, document verification, and rule-based monitoring systems. These systems were designed to flag suspicious transactions based on a predefined set of criteria, such as unusual amounts, mismatched goods descriptions, or cross-border payment inconsistencies.

13.0 Conclusion

The study found that TBML has a significant effect on the economy and, as a result of weaknesses in both Ghanaian banks and the Ghana Revenue Authority (Customs Division), the two primary gatekeepers. Ghana has the potential for TBML and ML through banking institutions, and the Ghana Revenue Authority (Customs Division) has been identified as a major source of risks. These two institutions had failed woefully as primary gatekeepers in the fight against the money trade-based money laundering phenomenon. Ghana had faced several challenges in fighting Trade-Based Money Laundering (TBML) due to the inherent complexity of trade finance, which had made traditional monitoring methods inadequate for detecting sophisticated illicit activities like price, quantity, or quality misrepresentation in transactions.

The country's role as a regional trade hub (African Continental Free Trade Area), while beneficial for the economy, has also created vulnerabilities, necessitating continuous adaptation and improvement of regulatory and supervisory frameworks to combat financial crime effectively. Furthermore, Ghana had also faced challenges fighting Trade-Based Money Laundering (TBML) due to several factors, including insufficient technology, weak institutions like banks and GRA (Customs Division) as primary gatekeepers, information silos between government agencies, a shortage of trained experts, and a lack of consistent regulatory enforcement. The inherent complexity of trade finance has also been exploited by criminals through methods like phantom shipments, falsified invoices, and over- and under-invoicing. Ghana's anti-money laundering (AML) and combating the financing of terrorism (CFT) laws and regulations are assessed through a combination of national risk assessments, mutual evaluations by bodies like GIABA, and ongoing supervision by authorities like the Financial Intelligence Centre (FIC) and the Bank of Ghana.  Customs authorities in Ghana revealed that they had faced several challenges in combating trade-based money laundering (TBML), which included inadequate technology, information sharing gaps, a lack of specialized expertise, and poor oversight. This study has highlighted that billions of dollars are being laundered through schemes like phantom shipments, falsified invoices, and under- and over-invoicing.

Ghanaian banks had faced key challenges in addressing trade-based money laundering (TBML) in  Ghana, which included poor inter-agency cooperation, technology gaps, and the difficulty of detecting illicit funds disguised within legitimate international trade.   The country's framework could be evaluated based on its ability to criminalize predicate offenses, which the country has not done well, and has not implemented preventive measures through regulations, and its effectiveness in investigating and prosecuting money laundering and terrorist financing. Ghana’s AML legal framework has matured significantly over the past two decades, mirroring international best practices and establishing robust institutional foundations. Yet real-world implementation has been constrained by resource limitations, fragmented enforcement, underutilized fintech integration, and informal economic vulnerabilities. The future lies in closing these gaps through digitized disclosures, trade-based money laundering, stronger oversight, regional collaboration, and harnessing the mobile financial ecosystem. As the complexities of global trade and the sophistication of illicit financial activities continue to grow, professionals face significant challenges in detecting and preventing Trade-Based Money Laundering (TBML).

The consequences of failing to address TBML risks can be severe, including huge sanctions, reputational damage, loss of customers, substantial financial penalties, and even litigation, jeopardizing the hard work and dedication you have invested in international trade businesses in the country. The study assessed trade-based money laundering (TBML) in  Ghana by analyzing common typologies, indicators, and existing risks, as well as examining the role of regulatory bodies like the Financial Intelligence Centre (FIC), Ghana Revenue Authority (Customs Division), and 23 commercial banks. The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) has also identified TBML as a significant threat in the region.  

The content analysis of this study covered TBML typologies and indicators in Ghana that included over- and under-invoicing, phantom shipments, multiple use of Import Declaration Forms (IDFs), inconsistencies in trade documentation, and transactions inconsistent with business activity and round-tripping. The data reviewed also covered the billions of US$ that the state had lost to the illicit flow of funds in the trade-based money laundering in the country. The study also assessed TBML in Ghana through a multifaceted process that involved analyzing specific typologies and risk indicators, strengthening inter-agency cooperation and oversight, improving data analysis, and enhancing the skills of those involved in investigation and enforcement. While Ghana has regulatory frameworks in place, recent reports from late 2025 highlight significant weaknesses in the enforcement and scrutiny by gatekeepers, pointing to large-scale TBML activities that drain public revenue and put pressure on the local currency.

The research findings had confirmed that trade-based money laundering had remained one of the most challenging forms of financial crime in the country. Strengthening legal frameworks, fostering international collaboration, and leveraging technology are critical in addressing this existing threat in the international trade arena in Ghana.

By enhancing transparency in trade transactions, improving data sharing, and equipping institutions with advanced analytical tools, GRA (Customs Division) and banking institutions could disrupt TBML networks and protect the integrity of the Ghanaian financial system. Trade-based money laundering has undermined the integrity of the international trade and banking system in the country by embedding illicit activity within legitimate commerce. Detecting it requires more than transaction monitoring-it demands unified data, connected context, and advanced analytics that can reveal sophisticated criminal networks operating at scale. Trade-based money laundering remains one of the most challenging forms of financial crime to detect and prevent in Ghana. Strengthening institutional and regulatory frameworks, fostering international collaboration, reappointing destination inspection companies, and leveraging technology like AI and Machine learning are critical to addressing this hidden threat.

Also, by enhancing transparency in international trade transactions, improving data sharing among banks, GRA (Customs Division), FIC, and Bank of Ghana, and equipping banks and GRA (Customs Division) with advanced data analytical tools, government and banking institutions can disrupt TBML networks and protect the integrity of the Ghanaian financial system. In an effort to combat trade-based money laundering will need to be continued delivery of policy reform, investment in technology upgrades and enforcement. With the enormous stake that America has in the prosperity of international trade and the dominant role we play in the world’s financial system, we should lead the way. Putting into practice the recommendations – whether increasing onerous regulation and adopting AI/blockchain, or improved data sharing and the creation of public-private partnerships – will see the gaps that TBML exploiters exploit reduced.

The negative effects of TBML had been far-reaching, including lost tax revenue for the government, erosion of foreign exchange reserves, increased pressure on the Ghanaian cedi (currency), and a higher cost of living due to inflation. Ghana's previous placement on the Financial Action Task Force (FATF) grey list also highlights reputational risk and impacts international banking relationships.

Ghana's past placement on the Financial Action Task Force (FATF) grey list definitely highlighted reputational risks and impacted international banking, leading to higher transaction costs, slower processing, increased scrutiny, and potential reduced investment, though Ghana was successfully removed in 2021 after fixing its Anti-Money Laundering/Countering Terrorist Financing (AML/CFT) gaps, boosting confidence in its financial system. Subsequently, Ghana was also removed from the European Union's list of high-risk countries in 2022, further solidifying its improved standing.

14.0 Policy Recommendations

Ghanaian Banks should employ a multi-faceted approach to combat the rising  Trade-Based Money Laundering (TBML), primarily relying on advanced technology, automate all suspicious transaction reports, enhanced due diligence, mandatory staff capacity building and collaboration with external partners Financial Intelligence Center and Bank of Ghana while Ghana Revenue Authority (Customs Division) may have to use a multi-pronged approach to combat trade-based money laundering (TBML), focusing on advanced data analytics, inter-agency cooperation, risk-based targeting, comprehensive physical verification of goods and enhanced due diligence. Ghana Revenue Authority (Customs Division) must develop new strategy that focuses on four key areas: capability building, engagement, intelligence and data, and operational activity. The Government, with the Ministries of Trade and Finance, may have to reconsider the introduction of a destination inspection scheme to help in preventing or minimizing the rising trade-based money laundering in Ghana. These policy recommendations are designed to detect anomalies in trade flows and documentation that indicate illicit activities

First recommendation is that the Ghana Government with Ministry of Finance should set up Commission of Enquiry to conduct forensic audit into the US$ 42 billion phantom shipment debacle, Dr. Cassiel Ato Forson revealed while presenting the 2026 Budget in Parliament on 13/11/2025 on abuse of Import Declaration Forms between April 2020 and August 2025, of more than 525,000 transactions worth US$83 billion were processed through the Integrated Customs Management System (ICUMS). Only 10,440 of these transactions were linked to actual imports. An estimated US$31 billion was transferred abroad with no goods imported, draining foreign reserves and weakening the Ghana Cedi, and other trade-related issues mentioned in the BFT 6/11/2025 dispatch, so that preventive measures could be established against future happenings. The culprits found in this scandal must be dealt with appropriately, and the Banks must name and shame and sanction properly those banks involved. An example for the Bank of Ghana and Financial Intelligence Center could be found in a case where the UK Financial Conduct Authority fined Ghana International Bank Plc UK GBP 5,829,000 for poor anti-money laundering and counter-terrorist financing controls over its correspondent banking activities in July 2022.

*Second, Banks must conduct thorough and ongoing identity verification using reliable infrastructure like the Ghana card and understand the customer's business activity to spot inconsistencies. This includes screening clients against domestic and international sanctions lists.  Ghanaian banks must strengthen Know Your Customer (KYC), Know Your Customer Business (KYCB), Customer Due Diligence (CDD), and Enhanced Due Diligence: Vigorously verify the identity of both the customer and the business involved, as well as any agents or beneficial owners. Use the Ghana Card for customer identification verification. Customer Due Diligence (CDD); Enhanced Due Diligence and KYC. Designated entities like banks must perform CDD based on risk assessments. This includes verifying identities, understanding beneficial ownership, and applying enhanced due diligence (EDD) for high-risk customers or cross-border assignments. EDD obligations were significantly heightened under Act 1044.

By banks implementing comprehensive Know Your Customer (KYC) and Customer Due Diligence (CDD) processes to thoroughly assess client profiles and monitor their risk levels. This involves verifying identities, understanding the nature of their business, and identifying beneficial owners and related individuals and entities. This is to ensure that your clients are not listed on sanctions lists, designated lists, or adverse media, thereby providing a clearer understanding of their relationships and potential risks. Furthermore, Ghanaian banks must also adopt the ‘Know Your Customer Sector’ model to obtain insight into the industry; to assess whether a customer is compliant, you not only need to know the customer but you also need to be familiar with the industry in which the customer operates. Is it logical that a payment in a specific sector takes place in advance? Is it logical that a customer imports certain products from country X or Y? Or would you expect the goods flow to be reversed? (UK His Majesty’s Revenue & Customs, 2025)

Third, Ghanaian banks should periodically conduct an enterprise-wide risk assessment for trade-based money laundering (TBML). A robust understanding of TBML risks will help you design appropriate risk controls and communicate controls to business partners such as correspondent banks. The steps to this process are to identify the inherent TBML risks the bank faces, assess the internal controls that help mitigate these risks, and determine residual risk (the risk that remains after applying internal controls. Banks must periodically conduct enterprise-wide risk assessments for trade-based money laundering (TBML) to meet compliance obligations of both the Bank of Ghana and the Financial Intelligence Centre, proactively strengthen defenses against evolving threats, allocate resources efficiently, and maintain credibility with regulators and customers.

These assessments ensure a proactive approach to identifying, mitigating, and managing the specific TBML risks a bank faces, rather than a reactive one, which helps prevent penalties and reputational damage. An assessment identifies vulnerabilities before they are exploited. TBML methods constantly evolve, so periodic reviews are necessary to identify new risks and update mitigation strategies to remain effective, rather than simply reacting to breaches. A risk-based approach allows a bank to focus its resources (time, money, personnel) on the areas with the highest potential risk. Banks should periodically conduct an enterprise-wide risk assessment for trade-based money laundering (TBML) for several key reasons, including regulatory compliance, the need to respond to evolving threats, the preservation of reputation and financial stability, and the ability to implement a more efficient, risk-based approach to mitigation. By understanding where TBML threats are most likely to occur, a bank can deploy controls and monitoring more efficiently.

TBML is a complex area with intricate supply chains and multiple parties involved. An enterprise-wide assessment helps a bank understand its specific exposures across all business lines and functions, leading to a more robust and comprehensive defense system. Regular assessments help protect the bank from being used to launder the proceeds of crime and finance terrorism, safeguarding the integrity of the financial system. TBML can involve misrepresentation of price, quantity, or quality of goods, and periodic assessments are crucial to identify this activity. Banks should allocate resources and apply stricter controls to transactions and customers identified as high-risk, particularly those involved in international trade finance, rather than treating all transactions equally.

Fourth, Banks in Ghana could prevent trade-based money laundering (TBML) by implementing strong internal controls, performing thorough due diligence on customers and businesses, and enhancing transaction monitoring to detect anomalies. Key steps include verifying customer and business identities using documents like the Ghana card, screening against sanctions lists, conducting regular independent audits, and reporting suspicious transactions to the Financial Intelligence Centre (FIC). Banks in Ghana can indeed prevent trade-based money laundering (TBML) by implementing these key measures: strong internal controls, thorough due diligence on customers and businesses, and enhanced transaction monitoring to detect anomalies.

The strong internal controls include establishing and maintaining internal systems to check customer activity, screen names against sanctions lists, and reporting suspicious behavior to the Financial Intelligence Centre (FIC). Banks must conduct thorough due diligence on customers and businessesinvolved, regularly updating client information, verifying the legitimacy of their sources of funds (Know Your Customer/Customer Due Diligence protocols), and applying Enhanced Due Diligence (EDD) for high-risk clients, sectors like real estate, or transactions. Banks must enhance transaction monitoring to detect anomalies: Banks are encouraged to deploy automated monitoring systems, including the use of artificial intelligence (AI) and machine learning, to flag suspicious trade patterns, detect mis-invoicing, and track unusual patterns instantly. Ghanaian banks can minimize Trade-Based Money Laundering (TBML) by adopting a risk-based approach, leveraging advanced technology for monitoring, enhancing inter-agency data sharing, and conducting rigorous customer due diligence and staff training.

Fifth, to enhance its ability to detect TBML and other risks, 23 commercial banks must roll out an automated transaction monitoring system. It will use data and network analytics to flag higher-risk customers for investigation, removing the need for manual review of individual trade transactions. Employ advanced technologies like AI and anomaly detection to continuously monitor transactions for unusual patterns that might indicate illicit activities. Ghanaian banks must roll out an automated transaction monitoring system to detect Trade-Based Money Laundering (TBML) and other risks associated with Ghana. This move must be part of the Bank of Ghana's (BoG) efforts to fortify the country's financial system against illicit financial flows and align with international anti-money laundering (AML) standards. Banks must review documentation for inconsistencies, such as mismatches in prices compared to market values, unusual payment methods (e.g., heavy use of foreign cash), or transactions with entities in high-risk jurisdictions.

The call for automated systems comes after data revealed that commercial banks in Ghana facilitated about US$20 billion of foreign transfers without corresponding import documentation between April 2020 and August 2025, indicating weak compliance oversight and significant revenue losses. This mandate followed a major phantom shipment incident, after which this research paper conducted thematic trade-based audits and required banks to integrate their core banking systems with the SWIFT gateway and adopt enhanced monitoring systems. Regulators globally, including those in Ghana, have increasingly pushed for sophisticated, often AI-powered, solutions to combat the growing threats of financial crime and TBML.

Sixth, Banks in Ghana should integrate Artificial Intelligence (AI) and Machine Learning (ML), which have emerged as powerful allies in the battle against financial crimes, particularly trade-based money laundering (TBML). Ghanaian Banks must to integrate AI-driven solutions to enhance risk management. AI and machine learning offer the following advantages: AI provides real-time monitoring by detecting anomalies in transaction flows as they occur, provides pattern recognition by identifying suspicious behaviors by analyzing vast datasets, it enables automated risk scoring by enhancing decision-making with predictive analytics and to provide seamless legacy system integration by ensuring efficient compliance without disrupting existing processes. Artificial intelligence (AI) must be used to detect trade mis-invoicing within trade-based money laundering (TBML) by using machine learning models to identify anomalies and suspicious patterns in vast amounts of trade transaction data and documents. Traditional, rule-based detection methods are often unable to keep up with the complexity and volume of global trade, making AI a more effective solution for catching sophisticated criminal activities.

Banks by adopting Natural Language Processing (NLP) to analyze unstructured, text-heavy data found in trade documents like invoices, letters of credit, and bills of lading. It helps extract relevant information, identify vague language or false descriptions, and cross-verify consistencies between different documents and structured data points. Natural language processing (NLP) can empower AI to analyze textual data found in documents like Letters of Credit and Bank Guarantees, helping to pinpoint inconsistencies or suspicious patterns that could signal fraud. Deep learning, a more sophisticated branch of machine learning, employs neural networks to detect complex patterns in large datasets, aiding in the discovery of hidden fraudulent activities that traditional methods might overlook. The integration of AI and machine learning in the fight against financial crimes offers a host of benefits. These advanced technologies can sift through and analyze vast amounts of trading data much quicker than any human could, allowing for the immediate identification of suspicious activities. In recent years, AI and machine learning have emerged as powerful allies in the fight against trade-based money laundering (TBML) within financial transactions. Financial institutions across the globe are increasingly turning to these technologies to spot suspicious activities and curb illicit financial flows.

Seventh, Banks must integrate block chain technology with A1 cloud to enhance AML and CFT. The integration of block chain technology with AI has shown potential in enhancing AML regulations. Block chain offers a transparent, immutable, and decentralized ledger for recording trade transactions, making it difficult for criminals to manipulate or falsify records.  The use of smart contracts and distributed ledgers ensures that each trade transaction is recorded in real-time, providing a verifiable and transparent history that can be used to detect discrepancies. To combat TBML and cross-border payments, it is necessary for the Ghanaian banks that work as mediators to implement Reg-Tech solutions. With powerful technology, AML compliance in trade finance can be strengthened, and financial institutions facilitating transactions for trade can seamlessly perform goods exchange activities. AI and Learning machine technologies have truly changed the game for financial institutions, helping them spot and prevent shady activities in international trade by automating the analysis of huge amounts of transaction data. By harnessing the power of AI and machine learning, institutions are not just getting better at detecting TBML; they're also building more efficient and secure financial systems. AI implements various algorithms and techniques to monitor customers, markets, and financial transactions that help identify various banking habits. By leveraging AI, Ghanaian banking institutions can revamp their AML compliance strategies, making them smarter, faster, and more efficient. This not only helps safeguard their reputation and avoid costly penalties but also eliminates the burden of endless manual processes and reduces overwhelming false positives.

Eighth, Ghanaian banks should provide training and disseminate information to all relevant staff to highlight significant regulatory changes and new risks and typologies noted for managing TBML risks. Training should be refreshed periodically, as determined by the Ghanaian bank’s risk assessment; it should be aligned with the Financial Institution’s policies and procedures; and it should consider circumstances unique to the FI, such as products offered, operational locations, and customer types. Regular and comprehensive training programs for employees are essential to ensure they are aware of current TBML red flags, new criminal techniques, and their reporting obligations under the Anti-Money Laundering Act, 2020 (Act 1044) and related guidelines. Ghanaian banks must provide training and disseminate information on regulatory changes and TBML risks to ensure compliance, mitigate financial crime, and protect against severe consequences like fraud and reputational damage. Effective staff training helps implement a risk-based approach, allows for better resource allocation, and demonstrates the bank's understanding of its exposure, which is crucial for the stability of the banking system. Training helps staff understand new risks and typologies, enabling them to apply a risk-based approach, focus resources on where risk is highest, and implement simplified measures for lower-risk activities. This avoids inappropriate "de-risking" where low-risk clients are cut off to avoid regulatory penalties.

By staying informed about new schemes, banks can better identify and report suspicious activities related to money laundering and terrorist financing. Training ensures staff are aware of the latest AML regulations, such as those included in the Bank of Ghana's updated guidelines from October 2025. Non-compliance can lead to severe sanctions prescribed by the Anti-Money Laundering Act, 2020 (Act 1044), including revocation of licenses and administrative penalties. Training equips employees to identify suspicious activities like transactions involving high-risk jurisdictions, inconsistent documentation, and unusual patterns of activity, thereby protecting the bank from being exploited for illicit purposes. The Financial Intelligence Centre (FIC) has issued reports with case studies on money laundering typologies to help financial institutions identify red flags. Staying current with training helps align Ghanaian practices with international standards set by bodies like the Financial Action Task Force (FATF), which is important for maintaining access to international financial systems. The BoG's new guidelines are aligned with FATF recommendations.

Ninth, Ghanaian Banks must automate STR Filtering using analytics, machine learning, and block-chain transaction monitoring. Automate and file all Suspicious Transaction Reports (STRs) and Cash Transaction Reports (CTRs) with the FIC for any suspicious activities. While the adoption of advanced technologies like analytics, machine learning (ML), and potentially blockchain monitoring in Ghanaian banks' Suspicious Transaction Report (STR) filtering is a topic of ongoing discussion and is encouraged by regulators, it is not currently a strict legal or regulatory mandate. Ghanaian banks need to automate Suspicious Transaction Report (STR) filtering using analytics, machine learning (ML), and blockchain technology to enhance efficiency and accuracy, meet regulatory requirements, and proactively combat sophisticated financial crimes. Automation with analytics and machine learning is necessary for handling volume and complexity. Traditional, manual, rule-based systems are often overwhelmed by the sheer volume and complexity of modern digital transactions and generate a high number of false positives (legitimate transactions flagged as suspicious). Automated systems can process vast amounts of data in real time, enabling effective monitoring at scale.

ML algorithms could analyze numerous data points simultaneously and learn from historical data to identify complex and evolving patterns indicative of money laundering or fraud that static, rule-based systems might miss. Advanced analytics and ML enable predictive risk assessment, allowing banks to anticipate new types of illicit activities and take preemptive action. Automation streamlines the entire process from data collection to alert generation and reporting, allowing human staff to focus on strategic analysis and high-priority cases rather than repetitive tasks. In essence, the integration of these technologies creates a more resilient, efficient, and intelligent financial ecosystem capable of keeping pace with the evolving tactics of financial criminals. Banks are automating suspicious transaction report (STR) filtering with analytics, machine learning (ML), and blockchain monitoring to enhance accuracy, save costs, and meet increasingly complex regulatory demands. Traditional manual and rule-based systems are inefficient and prone to error, which makes them less effective against increasingly sophisticated financial crimes like money laundering. Banks must have robust internal controls to identify and report suspicious transactions (STRs) and cash transaction reports (CTRs) to the FIC without delay.

Tenth, to effectively stem the TBML tide, Ghanaian banks must develop strategic training of bank staff; and staff of other financial institutions in how to effectively detect and prevent trade-based money laundering since it is unique area in banking and finance; and the criminals are technically sophisticated and technologically savvy in their handling of the (trade-based) money laundering operations. Banks and Specialized Deposit Taking Institutions must provide regular training programs to equip staff with the skills and knowledge necessary to understand trade practices, expected customer activities, and AML/CFT regulations, along with internal AML/CFT policies and procedures. This training will empower them to effectively identify TBML risks and take appropriate actions.  Banks must put in place strong internal systems, maintain records of all transactions for a minimum of five years, and conduct regular independent audits to assess the effectiveness of their Anti-Money Laundering (AML) programs

Eleventh, Ghanaian banks should adopt a risk-based approach (RBA) to combat trade-based money laundering (TBML) because it allows them to allocate resources more effectively, focusing enhanced scrutiny on high-risk transactions while simplifying measures for low-risk ones. This approach is crucial because TBML is a complex and evolving method that blends illegal funds with legitimate commercial flows, making it difficult to detect, and an RBA helps banks manage these risks more efficiently and comply with regulations. Key reasons for adopting a risk-based approach include efficient resource allocation, improved detection, regulatory compliance, mitigation of de-risking and adaptation to evolving schemes: An RBA will allow Ghanaian banks to concentrate their compliance efforts and resources on transactions that pose the highest risk of TBML. This means that instead of applying the same level of scrutiny to every transaction, they can apply simplified measures to low-risk activities and enhanced measures only where the risk is greater. Banks, by focusing on areas of higher risk like international trade finance banks can improve their ability to spot suspicious activities that are designed to look like legitimate trade transactions but are actually used to disguise the proceeds of crime. Financial regulations often mandate that banks implement a risk-based approach to combat money laundering and terrorist financing. Adopting an RBA is a way for banks to meet these legal and regulatory requirements.  By having a robust RBA, banks can avoid "de-risking," which is the practice of exiting a customer or an entire class of customers due to concerns about compliance costs or risk, which can disproportionately impact certain sectors and limit financial inclusion. The nature of TBML is constantly evolving. An RBA allows banks to adapt their strategies and focus on emerging threats and trends, ensuring their anti-money laundering (AML) controls remain effective against new schemes. Ghanaian banks should train staff on regulatory changes and new risks related to Trade-Based Money Laundering (TBML) to avoid financial crime, remain compliant with national and international standards, and protect their reputation. The Bank of Ghana (BoG) has reinforced this obligation by placing greater responsibility on board of directors and senior management to ensure continuous staff training on anti-money laundering (AML) practices

Thirteenth, Ghana Revenue Authority (GRA) must strengthen its role in the fight against trade-based money laundering (TBML) through its core functions of customs administration, revenue protection, intelligence gathering, physical verification of imported goods and inter-agency cooperation. Ghana Revenue Authority (GRA) particularly its Preventive Unit, is the country's first line of defense at all entry and exit points, for detection of trade mis-invoicing and under invoicing; strict border control and surveillance, abreast intelligence gathering and investigation; promote inter-agency collaboration:  robust Information sharing and continuous capacity building. Thoroughly trained staff can better protect customer data, which is crucial for preventing identity theft and financial fraud. A bank's reputation is built on trust and security. Failing to manage risks and comply with regulations can lead to severe consequences, including reputational damage. By adhering to rules and managing risks, individual banks contribute to the overall safety and soundness of the entire Ghanaian banking system,

Fourteenth, GRA (Customs Division) must strengthen its border control and surveillance system to fight against TBML.   The Customs Division, particularly its Preventive Unit, is the country's first line of defense at all entry and exit points. Its officers must conduct physical patrols, snap checks, and board/rummage aircraft, vessels, and vehicles to detect and prevent customs offenses and cross-border crimes, including money laundering and smuggling. GRA (Customs Division) must strengthen their border control and surveillance systems against TBML by using advanced technology for data analysis, improving inter-agency and international cooperation, and enhancing human resources through training and capacity building. Key measures include implementing risk-based profiling, integrating customs and financial systems, increasing physical inspections based on risk, and establishing clear, standardized electronic processes for trade data to facilitate cross-checking and monitoring.  Customs Division IT systems must be connected with those of banking institutions and neighboring countries to cross-check data, monitor transit cargo, and detect anomalies. GRA must implement advanced analytics to analyze trade data and flag suspicious patterns, such as discrepancies in pricing or shipping routes. Customs Division must digitize entire processes by using electronic documents and signatures to replace paper, automate processes like operator registration and bond management, and improve traceability and auditability.

Fifteenth, GRA must adopt Artificial intelligence (AI) in the detection of trade mis-invoicing in trade-based money laundering (TBML) by using machine learning (ML) algorithms, natural language processing (NLP), and graph analytics to analyze vast datasets, spot anomalies in prices and quantities, identify suspicious patterns, and cross-reference information across various documents and data sources in real-time. AI systems could identify deviations from normal trade patterns, such as unusual transaction amounts, mismatched goods descriptions, or odd shipping routes. Unsupervised learning methods (e.g., k-means clustering and isolation forests) are particularly useful for flagging novel or previously unknown types of mis-invoicing schemes that traditional rule-based systems would miss. AI models will compare the invoiced price and quantity of goods against global market data or a "normal" unit price range for similar products. Discrepancies (over-valuation or under-valuation) are flagged as potential mis-invoicing for further investigation. GRA by adopting Natural Language Processing (NLP) to analyze unstructured, text-heavy data found in trade documents like invoices, letters of credit, and bills of lading. It helps extract relevant information, identify vague language or false descriptions, and cross-verify consistencies between different documents and structured data points. Natural language processing (NLP) can empower AI to analyze textual data found in documents like Letters of Credit and Bank Guarantees, helping to pinpoint inconsistencies or suspicious patterns that could signal fraud. Deep learning, a more sophisticated branch of machine learning. Graph Analyticstechnique helps visualize and map complex networks of actors, including importers, exporters, intermediaries, and financial institutions. By analyzing relationships and data flows, AI can uncover hidden connections and elaborate TBML networks that span multiple jurisdictions and layers of transactions. An AI system helps in real-time monitoring. Unlike slow, manual processes, AI systems can monitor high volumes of trade transactions in real-time, providing immediate alerts for suspicious activities as they occur, which is crucial in fast-paced global supply chains. AI and machine learning algorithms could analyze large datasets to establish patterns of normal trade behavior. It then flags any deviations, such as unusual invoice amounts, sudden spikes in transaction volume, or irregular transaction timings, for further investigation. Artificial Intelligence (AI), with its capabilities in data processing, pattern recognition, and real-time analysis, offers a promising solution for combating TBML in supply chains. By leveraging machine learning (ML) algorithms, anomaly detection techniques, and predictive analytics, AI can identify suspicious activities in real-time, enabling GRA and Ghanaian banks to detect fraudulent transactions before they are complete.

Sixteenth, GRA must urgently adopt technology, such as artificial intelligence and advanced cargo manifests, to remove human-related factors that can enable illicit activities. Digitalizing systems, including e-invoicing and e-auction platforms, also helps create a transparent record to combat tax fraud and evasion, which are often linked to money laundering. AI and machine-learning capabilities enhance TBML detection by identifying subtle or emerging risks. The platform enables the creation of enriched analytical features (e.g., price-to-market ratios, shipment route consistency, beneficial-ownership overlap) and supports multiple AI techniques. Graph embeddings and clustering algorithms reveal previously hidden relationships, while explainable AI ensures detected patterns can be validated and justified to regulators. These tools help identify anomalies such as duplicate invoices, document reuse, or inconsistent third-party payments, without requiring data-science expertise.

Seventeenth, GRA (Customs Division) must enhance its surveillance and enforcement system to fight against the rising TMBL concerns: To boost compliance and combat systemic corruption, the GRA's Customs Division has been increasing enforcement measures at ports. This includes more thorough inspections, utilizing scanning technology, and operating extended hours to conduct higher rates of examination. Customs Division must enhance surveillance and enforcement to combat rising TMBL concerns because these illicit activities threaten national economic integrity, security, and public safety. Increased trade volumes often lead to more financial irregularities, and a strong customs system is crucial for preventing tax evasion, funding criminal organizations, and protecting citizens.

This requires a multi-faceted approach including advanced technology, improved intelligence capabilities, and greater international cooperation. Rising trade-based money laundering is highly correlated with an increase in customs-related financial irregularities, leading to significant state revenue losses from tax and duty evasion. Money laundering and terrorist financing undermine economic stability and can be used to fund criminal and terrorist activities, posing a direct threat to national security. GRA (Custom Division) must enhance surveillance, and enforcement is critical for ensuring revenue collection, deterring illegal activity, and protecting public safety. Enhanced enforcement ensures that the appropriate duties and taxes are collected on goods entering a country, contributing to the national economy. Improved surveillance and enforcement create a deterrent effect, making it more difficult for criminals to use trade routes for money laundering and other illicit financial activities. A stronger customs system is vital for protecting citizens and the integrity of a nation's economic borders from illicit financial flows. GRA (Customs Division) can enhance its system through improved technology, strengthen intelligence and training, and increase international cooperation. Implementing advanced technology for monitoring transactions and identifying suspicious activities is essential for modern customs operations. Equipping customs and law enforcement agencies with better intelligence capabilities and specialized training helps them to identify and combat sophisticated financial crimes more effectively, and TMBL is a cross-border crime, making international cooperation between customs agencies, financial intelligence units, and law enforcement crucial for success.

Eighteenth, the Ghana Revenue Authority (Customs Division) must strengthen its intelligence gathering and investigation in the fight against TMBL in the country. The GRA must gather intelligence about the operations of potential smugglers and fraudsters and use this information for proactive investigations. Suspected cases of fraud and money laundering are referred to the Investigation Department for further action. GRA (Customs Division) must strengthen intelligence gathering and investigation to effectively combat Trademark, Brand, and Labeling (TMBL) infringement and the associated money laundering (ML) for several critical reasons, including revenue protection, national security, public safety, and safeguarding legitimate trade.

Illicit trade activities like counterfeiting are frequently linked to more significant organized criminal operations, and the proceeds are laundered to fund further illegal activities. A holistic, intelligence-led approach is necessary to combat these increasingly sophisticated and interconnected crimes. Key Reasons for Strengthening Intelligence and Investigation include risk management and targeting, proactive detection of evolving threats, transforming Information into evidence, facilitating International and Inter-agency Cooperation and protecting National Security and economic integrity Intelligence is the foundation of effective risk management, allowing customs to move beyond random checks and focus resources on high-risk shipments, traders, and routes. By analyzing data, they can identify anomalies such as inconsistent pricing (over- or under-invoicing), mismatched trade documents, or unusual shipping routes, which are key TBML indicators. Criminals constantly adapt their methods. Strong intelligence capabilities, leveraging data analytics and AI, allow authorities to identify emerging TBML typologies and patterns (e.g., use of shell companies, specific high-risk jurisdictions) to anticipate and neutralize future threats. Investigation is the crucial step of converting intelligence into admissible evidence for prosecution. Without robust investigative powers and expertise, the information gathered remains merely "intelligence" and cannot be used effectively in court to sanction culprits and dismantle criminal organizations.

TBML is transnational, requiring collaboration across borders and with other domestic agencies (e.g., Bank of Ghana, Financial Intelligence Center, Ghana Revenue Authority, Police, and Economic and Organized Crime Office (EOCO). Strong intelligence functions facilitate the seamless exchange of information through established networks like the WCO's Regional Intelligence Liaison Offices (RILOs), which are vital for targeting global criminal networks. Beyond revenue collection, customs play a critical role as the first line of defense at borders, preventing illicit trade that can finance criminal and terrorist networks. By effectively combating TBML, Ghana Revenue Authority (Customs Division) helps protect the national economy from the destabilizing effects of financial crime and uphold public safety. In essence, strengthening intelligence gathering and investigation shifts customs from a passive "gatekeeper" to an active participant in dismantling complex transnational criminal enterprises, which is essential for national security and economic stability.

Nineteenth, GRA must ensure total prosecution and sanctions for culprits. The Authority is empowered by the Customs Act, 2015 (Act 891), and other relevant laws to arrest, detain, and arrange for the prosecution of offenders. The GRA's prosecution policy aims to use legal action as a deterrent against tax and customs fraud, which often intertwines with money laundering activities. The GRA should collaborate with other competent law enforcement agencies (LEAs) and regulatory bodies, such as the Bank of Ghana, Financial Intelligence Centre (FIC), the Economic and Organized Crime Office (EOCO), the Police (CID), and the military, to optimize and integrate national anti-money laundering and combating the financing of terrorism (AML/CFT) efforts.

Twentieth, GRA must develop robust information sharing with Financial Intelligence Center, Economic Organized Crime Office, Bank of Ghana and 23 authorized dealer banks will improve the fight against TBML The GRA improves information linkage and sharing among its internal divisions (Customs, Domestic Tax Revenue) and with external partners to create a comprehensive AML/CFT database and enhance the identification and reporting of suspicious transactions.

The GRA works with other competent law enforcement agencies, like the Financial Intelligence Centre (FIC), to combat tax crimes, fraud, and money laundering. The FIC, for example, analyzes suspicious transactions and provides actionable intelligence to authorities like GRA. The GRA has previously assisted the Economic and Organized Crime Office (EOCO) with investigations into alleged money laundering by checking companies' tax compliance. Breaking down "information silos" is crucial. Banks should collaborate and share intelligence seamlessly with the Ghana Revenue Authority (GRA), the Financial Intelligence Centre (FIC), the Bank of Ghana (BoG), and law enforcement agencies to identify irregularities between trade flows and cash movements. A common thread in the challenges and solutions to TBML is data – namely, exchanging information among the many stakeholders, including Banks, Customs Authorities, Financial Intelligence Center, and Bank of Ghana, with eyes on one piece of the trading puzzle.

One of the reasons TBML is so complicated to detect is that no single authority or entity knows everything about any trade transaction. Customs know the goods in and out of a country, including their declared values; banks see the payments, trade finance transactions, etc.; freight forwarders and shipping companies know what goods are moving; and law enforcement and regulators may have intelligence on certain bad actors. But these articles are also walled off. Breaking down those silos with better data sharing is widely seen as a key to stopping TBML.

Twentieth -one, GRA must build on capacity with continuous training for all staff in the emerging trade- based money laundering. The Authority ensures continuous training of its staff on new trends in financial crime, including the sophisticated tools used by criminals, to improve their capacity for risk-based supervision and detection. By enforcing customs and tax laws rigorously and cooperating with national and international bodies, the GRA actively works to safeguard Ghana's financial system from the impact of trade-based money laundering.  Continuous and specialized training for custom officers on the evolving dynamics and risk indicators of TBML is essential. Gaps in this area could mean officers are not adequately equipped to identify emerging threats.

Twentieth two, Ghana Revenue Authority must develop robust information sharing with Financial Intelligence Center, Economic Organized Crime Office, Bank of Ghana and 23 authorized dealer banks will improve the fight against TBML The GRA improves information linkage and sharing among its internal divisions (Customs, Domestic Tax Revenue) and with external partners to create a comprehensive AML/CFT database and enhance the identification and reporting of suspicious transactions. The GRA works with other competent law enforcement agencies, like the Financial Intelligence Centre (FIC), to combat tax crimes, fraud, and money laundering. The FIC, for example, analyzes suspicious transactions and provides actionable intelligence to authorities like the GRA. The GRA has previously assisted the Economic and Organized Crime Office (EOCO) with investigations into alleged money laundering by checking companies' tax compliance.

Twentieth three, there is an urgent need to improve the institutional integrity of the Customs Administration to fight trade-based money laundering. The Customs division and the leadership of Ghana Revenue Authority must pay careful attention to the following:

a.Organize periodic training on ethics, and monitor professional conduct;

b. Take steps to protect and ensure the safety of informants and investigative personnel to give full effect to the whistle-blower law/policy;

c. Sanction officers found guilty of corruption and publicize the same to keep the public informed, to ensure compliance.

d. Consider setting up one external oversight body with representations from the relevant stakeholders to sanitize the appeal process as well as allow independent assessment of operations, especially about complaints and allegations of corruption.

e. Develop a policy to engage Civil Society to participate in the oversight functions. This engagement could possibly be channeled towards research and public education on the mandate of the Customs Division and the services provided.

f. Make a conscious effort to disseminate information of public interest promptly and be responsive to public requests for information in conformity with best practices.

g. Insulate the management and operations of the Customs Division from undue external influence to allow for independent execution of their mandate. h. It would be prudent for the management of Customs to create an assets declaration, verification, and review unit as soon as practicable to give effect to the fight against corruption

Twentieth-four, GRA must strengthen its revenue protection: By detecting TBML schemes, the GRA will be able to recover lost revenue from unpaid duties and taxes. A recent study found significant revenue losses due to foreign transfers that did not have matching import documentation. The GRA's role in combating TBML is therefore directly linked to its core mission of revenue mobilization. To enhance its ability to detect TBML and other risks, GRA must roll out an automated transaction monitoring system. It will use data and network analytics to flag higher-risk customers for investigation, removing the need for manual review of individual trade transactions. Effective TBML enforcement requires collaboration with other domestic law enforcement agencies (police, EOCO, GRA, etc.) and the Financial Intelligence Center (FIC).

Customs share information and intelligence to build a comprehensive picture of criminal networks and leverage specialist expertise. On the issue of trade-based money laundering, the GRA must tighten border controls, and the established legal and regulatory measures are suggested. It is advised that technology-based solutions, such as systemic container scanning, should be implemented. Officers of the Customs Division of the GRA should be specifically trained to detect and prevent smuggling at the principal points of exit in the country.

Twenty-fifth, the Financial Intelligence Centre (FIC) and the Bank of Ghana (BoG) must take steps to strengthen the AML/CFT regime, including issuing updated guidelines for financial institutions, including banks. Information silos still prevent seamless intelligence sharing between different agencies. The Financial Intelligence Centre (FIC) and the Bank of Ghana (BoG) are the primary bodies responsible for strengthening Ghana's anti-money laundering and counter-financing of terrorism (AML/CFT) regime [1]. Their efforts focus on implementing international standards to protect the integrity of the financial system. FIC and Bank of Ghana must enhance supervisory oversight by intensifying the monitoring and supervision of financial institutions (banks, forex bureaus, etc.) and designated non-financial businesses and professions (DNFBPs), such as real estate agents and lawyers, to ensure full compliance with reporting requirements and preventative measures.

Bank of Ghana, Financial Intelligence Centre, Banks and Customs Division must improve information-sharing systems. Fostering better cooperation and the timely exchange of financial intelligence between the FIC, the Bank of Ghana, law enforcement agencies, and international counterparts to identify and investigate suspicious transactions more effectively. Continuously reviewing and updating the relevant laws, regulations, and guidelines to align with the latest recommendations from international standard-setting bodies like the Financial Action Task Force (FATF) [2]. Providing ongoing training and resources for all relevant stakeholders, including reporting entities and regulatory staff, to enhance their expertise in detecting and reporting potential money laundering and terrorism financing activities.

Encouraging strong collaboration with the private sector to promote a culture of compliance and shared responsibility in the fight against financial crime. Financial Intelligence Centre (FIC) and Bank of Ghana can strengthen the Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) regime by improving intelligence gathering and analysis, enhancing supervision and regulation, and fostering greater collaboration. FIC collects, analyzes, and disseminates financial intelligence, while the Bank of Ghana implements regulations and conducts supervisory examinations of banking institutions. Enhanced collaboration and the adoption of new technologies are also critical steps.

Twenty-sixth, Ghana Revenue Authority (GRA) should prevent corruption through a multi-faceted approach that includes strengthening internal controls and investigations, engaging staff and external stakeholders, and implementing operational reforms. Specific actions include improving staff compensation, ensuring professional management, separating duties, conducting internal and external audits, promoting transparency, and using technology to reduce face-to-face interactions that can facilitate corruption. GRA (Customs Division) must implement integrated and automated systems (like the single window system at ports) to reduce human interaction and discretionary power, which are major sources of corruption vulnerability. Shifting from manual case selection to a risk-based approach for audits helps focus resources efficiently and reduces opportunities for subjective decision-making and potential bias. GRA must implement robust internal audit functions and investigation processes for all allegations of impropriety and ensure skilled management, define clear merit-based career paths, and provide appropriate compensation and working conditions to reduce incentives for corruption.

Customs Division of the Ghana Revenue Authority must rotate staff and manage work assignments to avoid situations where relationships with those being regulated can foster corrupt practices. Use technology to streamline processes and reduce the need for face-to-face interactions that can lead to corruption, and also define performance and service standards to provide a benchmark for professional conduct. Ghana Revenue Authority (Customs Division) must implement systems for fair valuation and create an independent channel for traders to report corruption without fear of retaliation. Ghana Revenue Authority (Customs Division) must prevent corruption through a range of measures, including automation and streamlined processes, strengthened internal affairs and investigations, and promoting a culture of integrity and collaboration with external stakeholders. The Ghana Revenue Authority must work on setting up a confidential reporting mechanism with the Ghana Integrity Initiative, including reward incentives, to enable individuals to report corruption without fear of retaliation. The Ghana Revenue Authority must work with external bodies like the Economic and Organized Crime Office, Office of the Special Prosecutor (OSP), and the World Customs Organization (WCO) to address corruption and align with international standards.

Twenty-seven, Ghana Revenue Authority (Customs Division) must establish a dedicated TBML Threats Team to develop a strategy on behalf of the Ghanaian Government with the dual aim of developing a greater understanding of TBML and driving operational activity to limit its impact. Ghana’s exposure to TBML is two-fold: we are a significant importer and exporter of goods, and we’re also a prominent international (financial) services center, with an environment that facilitates domestic and international business development. As such, the strategy must focus on four key areas: capability building, engagement, intelligence and data, and operational activity. The TBML Threats Team also works with the Economic and Organized Crime Office and Ghana Police (Criminal Investigation Department (CID), Financial Intelligence Center, prosecution partners to monitor investigations that might feature TBML, providing advice and guidance in support of the overarching investigation strategy.

The Team plays a key role in developing these relationships and establishing ongoing dialogue with strategic partners through multi-agency meetings. This helps keep TBML at the forefront of multiple strands of work, which will impact both directly and indirectly the exposure of Ghana’s financial system to TBML. Ghana could model on UK HM Revenue & Customs (HMRC) that was indeed created a dedicated TBML (Trade-Based Money Laundering) Threats Team to develop a UK strategy, focusing on building capability, intelligence/data use, engagement with partners (Border Force, National Economic Crime Centre), and driving operations to understand and combat TBML, utilizing tools like their new TBML handbook for industry to spot sophisticated laundering through trade.

Finally, the Ghana Government, with Ministries of Trade and Finance, may have to reappoint the Destination Inspection Company to inspect imported goods upon arrival in the destination country to ensure they meet quality, safety, price comparison, and customs requirements, and this may help to reduce trade based-money laundering including phantom shipment and other trade malpractices in the international trade space in Ghana. Destination inspection companies in Ghana may benefit the government by preventing fraud through verification of imports' value and quality, and they protect consumers by ensuring imported goods are safe and meet standards. Destination inspection companies (DICs) in Ghana provided numerous benefits, including enhanced government revenue mobilization, improved trade facilitation, and better protection of consumers from substandard goods. The functions of the DICs were largely integrated into the Ghana Customs system, specifically through the Integrated Customs Management System (ICUMS) in September 2015.

Destination Inspection Companies will also facilitate trade by making the clearance of goods more efficient, focusing on high-risk shipments to speed up the process for compliant importers. This is often a mandatory check for certain goods or for shipments that did not arrive with a pre-shipment Certificate of Conformity (CoC). The destination scheme significantly boosted customs revenue collection by providing an accurate assessment of imported goods, and helped the country to consistently meet or exceed its revenue targets. Destination Inspection Companies are crucial in verifying the transaction price and ensuring appropriate classification of goods under the Harmonized Commodity Code, which is essential for correct duty assessment. By providing a transparent, automated, and paperless transaction system, the scheme helped to minimize opportunities for fraud, corruption, and duty evasion at the ports. The scheme facilitated the transfer of modern technology, such as advanced X-ray scanners, and provided training to local customs officers, enhanced their capacity to perform core customs functions.

Destination Inspection Companies will help to capture, store, secure, and manage large volumes of trade data, including manifests, invoices, and permits, which improved record-keeping and data analysis for future risk management. The process involves submitting an application with import documents, presenting the goods for inspection and laboratory testing, and resolving any discrepancies found. The main objectives of destination inspection include combating the importation of prohibited, fake, adulterated, or substandard goods and preventing smuggling. Confirming the accuracy of declared value, quantity, and classification to ensure correct duties and taxes are paid, thereby preventing revenue evasion. Verifying that goods meet the destination country's legal, health, safety, and environmental standards. While inspections inherently involve some delay, a well-managed system (often using risk management and technology) aims to facilitate legitimate trade by providing a structured and transparent clearance process.  Destination inspection of imported goods is a customs control system where the physical verification/examination and assessment of cargo take place at the port of clearance in the destination country, rather than in the exporting country before shipment. This process is a key component of customs clearance, designed to ensure compliance with physical verification of imported goods, national laws, safety standards, and tax regulations. Destination inspection works on application, inspection, compliance verification and outcome.

The importer or their clearing agent applies for inspection online and submits necessary documents, such as the bill of lading, commercial invoice, certificate of origin, and packing list. An inspector physically examines the goods at the port of entry or a designated location. This can involve a visual check of labels and quality attributes or taking random samples for laboratory testing. Inspectors check for conformity with the declaration forms like Import Declaration Forms to ensure the products meet local standards as per the proforma invoice, and verify the correct tax amount is declared. Inspectors issue a Gateway Pass and a Final Classification and Valuation Report, allowing customs to clear the goods.