Get Serious about TBML

In 2005, I wrote my first book, Hide & Seek: Intelligence, Law Enforcement and the Stalled War on Terror Finance. The final chapter of the book contained a number of “steps forward.” The first recommendation was, “Get Serious about TBML.” It should come as no surprise that, years later, I have exactly the same conclusion and priority recommendation!

I would like to quote from the earlier recommendation in Hide & Seek: “The misuse of trade should be the next frontier in anti–money-laundering programs. Just as a generation ago the United States promoted financial transparency, today it is time to promote trade transparency. International trade is a back door for money laundering, illegal value transfer, customs fraud, tax cheating, and various alternative remittance systems.”¹ That earlier prescription is in fact the theme of this book.

Nothing has changed my mind in the intervening years: trade transparency should be the new priority in AML/CFT enforcement. In Chapter 1, we discussed the magnitude of international money laundering. Worldwide estimates are in the trillions of dollars. As demonstrated, if we honestly examine the sheer volume of illicit proceeds laundered and the increasing recognition that tax evasion is another form of money laundering, our success rate as measured by the one meaningful bottom-line metric—convictions—is pitiful.

So it is time to question the effectiveness of our current countermeasures. The status quo isn't working. At the same time, we have essentially ignored one of the chief components of international money laundering—trade. While time, attention, and resources are devoted to new-age “sexy” money-laundering topics such as cyber-currency, the overwhelming majority of dirty money being laundered today takes place via old-fashioned methods that we have not yet been able to control. In point of fact, trade-based value transfer is arguably the oldest money-laundering system in the world.

The international community must now focus on this essential missing link. We should follow hidden value transfer trails by looking comprehensively across countries and commodities.

As I wrote in Hide & Seek, “For a variety of reasons, [bureaucracies] have been reluctant to focus on this issue [TBML]. The competing interests of commerce and enforcement and between liberties and the government's need to know will undoubtedly influence any future debate on how to combat the misuse of trade. Yet just like in the area of traditional money laundering through financial institutions, compromises can be found, necessary safeguards implemented, and a balance achieved.”² I'm convinced we can do this.

So what are some new steps forward?

Define the Magnitude of the Problem

In Chapter 1, I wrote, “Including all its varied forms, the argument can be made that TBML is perhaps the largest and most pervasive money-laundering methodology in the world.” Estimating the overall magnitude of global money laundering has proved difficult.³ The scope of TBML has never been systematically examined. But I believe it is possible for economists, statisticians, and analysts to come up with a fairly accurate estimate of the overall magnitude of global TBML and value transfer. Narrowing it down to specific problematic countries is easier still. The primary reason this is doable is that data are available for most of the trade-based methodologies discussed in this book. That is not necessarily true for money laundering in general.

Academics and nonprofits such as Global Financial Integrity have done tremendous work in developing models that measure aspects of TBML. Using these pioneering insights, I believe the World Bank or the IMF should study the global magnitude of the problem and develop an overall estimate. If those international organizations are unwilling to undertake the task, I urge the Department of Treasury's Office of Intelligence and Analysis (OIA) to at least examine U.S.-related data and come up with an official estimate for the amount of TBML that impacts the United States.

A generally accepted estimate of the magnitude of TBML in all its varied forms is important for a number of reasons: (1) it will provide clarity; (2) it will focus attention on the issue; (3) from an enforcement perspective, the supporting analysis should provide both excellent insight into specific areas where criminals are vulnerable and promising opportunities for targeting; and (4) systematically cracking down on TBML and customs fraud will translate into enormous revenue gain for the governments involved.

I also believe an approximate ratio of the estimated amount of TBML to the amount a government should recover by enforcement is possible to determine. The carrot of enticement will prove important. From experience, I have found that for most countries it is not political will that finally drives effective action to combat TBML and value transfer. Rather, it is revenue enhancement for income-starved governments that is the catalyst for action. Whatever the motivation, it is time to get started.

Focus from the Top

As we have seen, TBML impacts a variety of issues of growing international concern, including transnational crime, terrorism, tax evasion, customs fraud, abusive transfer pricing, sanctions busting, capital flight, trade diversion, underground finance, informal remittances, and others. These are all incredibly important issues that impact both the developed and developing worlds. The promotion of trade transparency requires global visibility. Effective countermeasures necessitate a comprehensive and worldwide approach. Thus, in my opinion, trade transparency should be an agenda item for the G-20, the Organization of Economic Development (OECD), the World Customs Organization (WCO), and the Financial Action Task Force (FATF).

Trade fraud also impacts societal and cultural issues such as corruption, the transfer of national wealth, environmental degradation, the exploitation of national resources, endangered wildlife, illegally logged timber, conflict gold and diamonds, and other worrisome challenges. I would like to see nonprofit organizations involved in these issues, such as Global Witness, promote trade transparency for both industry and government.

A FATF Recommendation

In the world of AML/CFT, the FATF makes things happen. The FATF recognizes TBML is a huge concern and calls it “one of the three largest” money-laundering methodologies in the world. There is a special FATF typology report on TBML. Unfortunately, when the current FATF Recommendations were reviewed and promulgated in 2012, TBML was not specifically addressed.

In years past, I was active in the discussions about making TBML a “special” FATF recommendation. However, it should not come as a surprise that not all countries want trade transparency. Some benefit from the status quo. Moreover, expanding FATF's mandate into international trade matters would be a huge leap outside of its traditional domain of focusing on banks, money services businesses, and designated nonfinancial businesses and professions (DNFBPs). But I believe it is now only a matter of time before the FATF expands its self-imposed constraints. The FATF must be flexible and confront varied identified threats to the increasingly interconnected global financial order. If it does not move to systematically address one of its self-identified top-three global money-laundering methodologies, the organization will lose credibility. Accordingly, I believe the FATF and its sister FATF-style regional bodies should work toward developing a consensus that TBML should be subject to its own recommendations.

This consensus will undoubtedly take time. In order to be effective, any new recommendation on TBML must encompass not only financial institutions but also designated sectors involved in international trade. This will include firms transporting or arranging the transport of goods such as brokers, freight forwarders, and carriers. In addition, any new mandate on trade transparency should include manufacturers and companies involved in global trade. This will necessitate a huge expansion of the current AML/CFT umbrella. Entirely new categories of nonfinancial companies that are currently not the least bit knowledgeable or concerned about AML/CFT safeguards must be included. This admittedly controversial and costly proposed expansion would inevitably involve new industries in AML/CFT customer due diligence, record keeping, and the filing of financial intelligence reports such as CTRs, 8300s, and SARs.⁴

There are some signs that Treasury is moving in this direction. For example, in April 2015, FinCEN issued a temporary geographic targeting order (GTO) directed against 700 exporters of consumer electronics and cellular phones in the city of Doral in Miami–Dade County. The GTO requires the businesses to report all cash transactions involving $3,000 or more instead of the normal $10,000. Over the last few years, there has been increasing intelligence that electronics exporters in Doral, which operate in a free trade zone near Miami International Airport, were “vulnerable to abuse,” particularly being used as witting or unwitting accomplices in facilitating TBML and BMPE schemes. John Tobon, the ICE Assistant Special Agent in Charge of HSI investigations in Miami, said that he hopes the electronics exporters will support their role in combating international money laundering via trade. According to Tobon, “We're trying to start creating that culture of compliance” (in industries outside of financial services).⁵

These and similar measures will undoubtedly generate pushback because of cost, burdensome record keeping, and the prevalent attitude among most businesses that they do not have a role to play as policemen. So realistically, a FATF Recommendation on TBML is not a near-term countermeasure. But building awareness and consensus and implementing targeted enforcement operations is a good place to start.

Curtail the Commercial Misuse of Trade

As noted in Chapter 7, both the criminal and commercial misuse of trade works hand-in-hand. I agree wholeheartedly with Raymond Baker of Global Financial Integrity that “we cannot succeed in stopping the criminals while at the same time telling multinational corporations that they can continue to misinvoice as they choose.”⁶ Abusive and fraudulent pricing techniques are used every day by thousands of multinational corporations around the world to move money and transfer value across borders. Current AML/CFT countermeasures turn a blind eye to legitimate actors' use of shadow financial systems, questionable financial flows, offshore havens, and assorted gray techniques used for the purposes of tax evasion, wealth preservation, and increasing profits. Yet at the same time, authorities will aggressively pursue criminal organizations' use of the same techniques to move tainted money across borders. This type of intellectual and political disingenuousness and hypocrisy contributes to our underwhelming success in effectively combating money laundering and other types of financial crimes.

Global corporations must embrace legitimate trade. Legitimate actors should demand trade transparency. This means respecting customs duties, VAT assessments, currency exchange regulations, AML/CFT regulations, and more. The FATF and other concerned international bodies should work to define illicit financial flows that are facilitated via trade and then create effective and enforceable measures to curtail trade misinvoicing. The human costs of commercial trade-based money and value transfer are the strongest arguments for international trade transparency and why this issue must be the next frontier in financial crimes enforcement.

Enhance Wire Transfer Reporting

In 2010, FinCEN issued a notice of proposed rulemaking that would lower the reporting threshold on cross-border electronic fund (wire) transfers from $10,000. (There was discussion regarding the amount of the new limits for both inbound and outbound wires.) The rule was authorized by the Intelligence Reform and Terrorism Prevention Act of 2004. The proposed rule would require banks directly transacting with foreign financial institutions to report all cross-border wire transfers to FinCEN. Currently, financial institutions are subject only to reporting suspicious wire transfers. FinCEN estimated that the proposed rule would annually create 500 million to 700 million new reports.⁷ Currently, financial institutions and MSBs file approximately 17 million financial intelligence reports with FinCEN every year.

FinCEN believes that the proposed cross-border wire transfer requirements would close certain loopholes that are exploited for money laundering, terrorist financing, and tax evasion. For a number of reasons, the proposed rule was subsequently withdrawn.

The focus of the rule was not TBML. However, such a rule if implemented would greatly enhance trade transparency. According to HSI investigator John Tobon, “We have full visibility of the trade data and if we could get full visibility on the financial picture attached to the trade data, it would be like getting lasik surgery and being able to throw away your glasses.”⁸

I endorse augmented cross-border wire reporting because the new intelligence will assist criminal investigators in combatting not only TBML but many other financial crimes. Candidly, my principal concern is that FinCEN has proven itself incapable of fully exploiting the financial intelligence it currently receives.⁹ The proposed wire data would be a 40 times increase of current annual BSA data filed. So this recommendation is conditional upon long-overdue effective congressional and Treasury oversight of FinCEN.

TBML Analytics

Most large financial institutions and many money services businesses have automated AML/CFT programs. Some of these programs are commercially available and others are developed in-house. Depending on their level of sophistication, they use some of the above-described techniques to monitor transactions, adhere to anti—money laundering compliance programs, and follow internal policies and guidelines.

Over the last few years, there has been increasing emphasis within AML/CFT compliance to be much more proactive in analysis. For example, by “spinning the dials” of monitoring systems, obligated entities sometimes search for telltale indicators of human trafficking. The point is that alerts are not generated unless programmed to do so.

Unfortunately, up to now, little has been done to include and detect TBML. There hasn't been any “dial spinning.” Thus, I suggest AML/CFT compliance analytic programs be expanded to cover suspect trade and value transfer. For financial institutions, as discussed in Chapters 9 and 10, most scrutiny will likely be focused on trade finance. However, today it is also possible to code or engineer TBML red-flag indicators into traditional AML/CFT software. The technology and expertise exists so that analytics can provide alerts when there is a likelihood of specific TBML methodologies such as hawala, trade pricing anomalies, the likelihood of trade fraud, and so on. I would like to see associations involved with banking, fraud, trade, financial crimes, and anti—money laundering press for the incorporation of TBML analytic programs. Financial intelligence units around the world, including Treasury's FinCEN, should enthusiastically champion this countermeasure. I'm confident the data and analytics industry are ready to assist.

Expand the International TTU Network

Trade Transparency Units (TTUs) have proved to be an increasingly important means to link international customs and law enforcement agencies. In the few years of their existence, TTUs' analytic, investigative, and enforcement efforts have identified and disrupted the activities of transnational criminal organizations involved in fraudulent trade schemes. There are enough data and “success stories” to make an informed judgment that the concept has proved effective.

In addition to being an innovative countermeasure to TBML and value transfer, as we have seen, systematically cracking down on trade-fraud is a revenue enhancer for participating governments. Frankly, it is for this reason that many countries have expressed interest in the concept. In essence, these governments understand that they are not collecting the appropriate amount of taxes and duties due to rampant customs fraud. Finding new revenue is increasingly an imperative for governments around the world. And establishing a TTU is a rare example of a government program that returns far more revenue than it consumes!

I asked Hector X. Colon, director of the U.S. TTU for his vision for the TTU concept. According to Colon:

I would like to see the TTU program grow within the U.S. and internationally. Domestically, the TTU can be capable of supporting not only HSI, but other law enforcement partners that have cases with a nexus to trade. In order to do so, it will require additional manpower and funding. Over the past few years, the TTU has been reduced in manpower and budget despite a significant increase in the number of investigations and foreign TTUs it supports. Internationally, the WCO appears interested in adopting the TTU program. A partnership with the WCO could expand the TTU program beyond HSI's current TTU international footprint. Additional WCO members that embrace the TTU methodology of developing cooperative relationships with foreign counterparts to enhance information sharing will build the framework for HSI to successfully conduct international trade and money laundering investigations, capable of prosecuting and dismantling the transnational criminal networks engaged in TBML and other illicit customs crimes.¹⁰

I fully support Colon's vision and wholeheartedly endorse the U.S. TTU model and its nascent international network. I am a proponent of eventually having a standard and globally recognized TTU partnership along the lines of the Egmont Group of Financial Intelligence Units (FIUs). Yet any country or jurisdiction can also create its own internal and independent TTU outside of the U.S.-sponsored initiative. An independent or nontraditional TTU could even be integrated into a current FIU or customs service. A compelling argument could also be made for the establishment of regional TTUs to examine distinct area-wide TBML and value transfer issues. Once again, such TTUs do not have to be affiliated with the U.S. DHS/HSI TTU program.

For example, Lou Bock and Mark Laxer (introduced in Chapter 9 as pioneers in TBML analysis and enforcement) recognize the power of traditional TTUs but are frustrated with their limitations as they serve only a small number of countries and generally focus on rather narrow aspects of crime such as terror finance and drug-related money laundering.¹¹ Another problem is that trade fraud controls are fragmented and reflect a division of labor among specialized agencies that only act when misconduct falls within their jurisdiction and mandate. For most jurisdictions, there is currently no holistic, systematic collaborative effort to bring data together, conduct analysis, investigate, and prosecute. A lack of expertise is another roadblock.

I have called corruption the “great-facilitator” in TBML. Bock and Laxer agree. In their experience, targeting takes place deep within the framework of government bureaucracies where there is too often a negative incentive to root out massive fraud. Not only does fraud embarrass and sometimes point to powerful entities, aggressive investigation takes political courage and resources and can shake up the comfortable status quo at that very institution.

So Bock and Laxer are now promoting nontraditional TTUs. They have identified innovative ways in which TTU functionality can be scaled for the diverse needs of countries. Nontraditional TTUs can target many different types of criminal behavior such as illicit trade flows and environmental crime. The duo have also developed a system by which the data and analysis reside outside member governments as a way to bypass corruption and inefficiencies often found in large bureaucracies. Nontraditional TTUs could also help lift the veil on the commercial misuse of trade. And they have worked to incorporate a variety of open source, publicly available data in their analysis.

So with the above in mind, I suggest the international expansion of the TTU initiative—with or without affiliation with the U.S.-led network. In addition, countries around the world should significantly bolster their customs services and provide training for how to better recognize and detect various forms of TBML and value transfer.

Reempower Treasury Enforcement

It has been well chronicled that both the CIA and the FBI failed in their missions—both foreign and domestic—to protect the homeland against the September 11 terrorist attacks. Other agencies also failed in aspects of their particular duties, such as the then Immigration and Naturalization Service, the Federal Aviation Authority, and Treasury's FinCEN. Yet in the rush to react to the events surrounding September 11, politicians from both parties hurried to reward the CIA and FBI with increased budget, mission, and manpower. And the Department of Treasury's enforcement arm that had virtually nothing to do with missing the signs of the impending terrorist attacks was punished.

With the resulting creation of the Department of Homeland Security (DHS), proud legacy Treasury law enforcement agencies such as the Secret Service and the U.S. Customs were jettisoned and shifted to the new DHS. The Bureau of Alcohol, Tobacco, and Firearms (ATF) was transferred to the Department of Justice. The move was aided and abetted by a Treasury secretary who had no interest in the proud legacy and tradition of Treasury law enforcement.¹²

The resulting dysfunction within the DHS has been well documented. In my opinion, the primary reason that DHS doesn't work as designed is that it is simply too large. It was created in 2002 by incorporating entities from 22 agencies and departments. Today, it has over 200,000 employees and a FY 2015 gross discretionary budget of approximately $45 billion!¹³ In my opinion, one unfortunate result of this colossus of an organization is that our AML/CFT efforts are stalled.¹⁴

In the Department of Justice, TBML and value transfer are subsets of other underlying crimes or specified unlawful activities. For example, the DEA focuses on money laundering only as it relates to the predicate offense of narcotics trafficking. The FBI does wonderful work reacting to bank robberies and white-collar criminals but knows very little about trade fraud and underground value transfer. Treasury, on the other hand, has a more holistic and systematic approach to money laundering in all of its forms. Moreover, the domestic financial industry sees Treasury as its natural government interlocutor—not the Departments of Justice or Homeland Security.

In the post–September 11 Treasury Department, the Office of Terrorism and Financial Intelligence (TFI) is primarily relegated to making AML/CFT policy and recommendations. It's a fact of bureaucratic life that outside recommendations are often ignored. And because its enforcement arm was crippled when DHS was created, Treasury no longer has the buttons to push and levers to pull to make things happen and implement those same policies. Some observers will argue that Treasury's use of sanctions and designations is an effective tool. Personally, I agree with the sage observation of retired U.S. diplomat Douglas Paal: “Sanctions always accomplish their principal objective, which is to make those who impose them feel good.”¹⁵ Besides, Treasury needs additional means to implement its enforcement mission.

So in conjunction with a long-overdue congressional review of the efficacy of the DHS, I suggest that thought be given to reestablishing the Department of Treasury's ability to conduct some types of financial crimes investigations.¹⁶ (I am not including Treasury's Internal Revenue Service Criminal Investigations in this discussion because its primary focus revolves around taxes.) The easiest way of doing this would be returning the United States Secret Service and the United States Customs Service to a reconstituted Treasury Office of Enforcement. (Full disclosure: I proudly served in both the Secret Service and the legacy Customs Service before their unwarranted departure to DHS.)

The Secret Service was founded in 1865 and was in the Department of Treasury until the creation of DHS. Its recent well-chronicled administrative and operational breakdowns are in part due to larger unresolved issues within DHS. The dual missions of the Secret Service—protection and financial crimes investigations—are actually complementary. Agents assigned to protection details learn a variety of skills working financial crimes investigations on the street. We would benefit by having an elite Secret Service skilled in twenty-first-century financial crimes enforcement back in its historical parent—the Department of Treasury.

Congress created Customs in 1789 and placed it within the new Department of Treasury. At the time, its primary mission was the collection of customs-related revenue. Over the centuries, its enforcement mission expanded. By the time I joined Customs in the mid-1980s, its Office of Enforcement was charged with enforcing over 400 laws, more than the FBI handled! With the exception of immigration, its authority had to do with the border of the United States. Since it was part of the Department of Treasury, its investigative special agents had expertise in financial crimes investigations related to the cross-border movement of illicit money, value, and trade. Many customs investigators had unique insight into underground financial systems that are in large part based on trade.

But Customs no longer exists. It is now part of Immigration and Customs Enforcement (ICE) within the DHS. The forced merger with the former Immigration and Naturalization Service and expansion of its mission into immigration enforcement has not been successful. Its expertise, skillsets, budget, and staffing were diluted. It is time to return the oldest federal law enforcement agency back to the place of its birth. A reconstituted Treasury-based U.S. Customs Service would then be able to devote more focused attention to TBML and value transfer enforcement and our overall AML/CFT countermeasures.

The Misuse of Trade Is a Law Enforcement Issue—Not Just a Customs Issue

When I retired from the U.S. government, I was honored to join the State and Local Anti-Terrorism Training (SLATT) program. It is funded by the U.S. Department of Justice, Bureau of Justice Assistance (BJA). The SLATT program is dedicated to providing specialized multiagency anti-terrorism detection, investigation, and interdiction training and related services at no cost to our nation's law enforcement officers, who face the challenges presented by the terrorist and violent criminal extremist threat.¹⁷

I assist the SLATT program by periodically traveling around the country and speaking with federal, state, and local law enforcement groups about terror finance and international money laundering. During my presentations, I am often stunned with the lack of knowledge regarding the importance of following the money and our financial countermeasures. I have also been amazed with the almost total unfamiliarity with TBML and value transfer. Even though I can demonstrate how TBML affects state and local law enforcement, most often the consensus is, “Trade is a customs issue. It doesn't concern me or my department.”

Yet it is precisely because law enforcement officers are on the front lines in their communities and know their operating environment well that they should notice if a local business or commercial activity does not make market or economic sense. For example, a normal business should not remain in operation for long with sporadic commercial activity or when consistently selling products at a loss. Numerous businesses in the United States and elsewhere are involved at the local level in TBML schemes and deal with goods that are frequently manipulated to transfer value. Businesses involved with the BMPE—large and small—are found throughout the United States. And, of course, as we have seen, local underground financial networks such as hawala and fei-chien often depend on trade and local business networks. Numerous examples of local businesses' involvement in trade-based value transfer are found throughout this book.

Accordingly, I urge my state and local law enforcement colleagues to become more familiar with issues surrounding TBML schemes and how they affect the local community. Where appropriate, trade fraud and associated crimes should be part of their financial investigations education. With an expanded TTU, there should be more sharing of targeted trade data with local law enforcement. And state and local law enforcement should play an increased role in appropriate federal task forces that deal with the threats of money laundering, financial crimes, and terror finance.

We have plenty of laws, rules, and regulations on the books that enable law enforcement to combat financial crimes, including TBML. What we need is a renewed emphasis on enforcement.

National Task Forces on Underground Finance

Although most underground financial transactions are benign, unfortunately criminals and terrorists are attracted to them. During our discussion, we have seen that they are nontransparent. Alternative remittance and value transfer systems are ethnic based and generally hidden to outsiders. Unfortunately, law enforcement at all levels does not have adequate representation from ethnic groups that often use underground financial systems. So the level of expertise is low.

I have made the argument that trade transparency could be the back door into some of the underground networks. Trade is generally used as a method of countervaluation or a means of balancing the books between brokers. I believe law enforcement and customs personnel should be more aware of these systems and how to better follow the value trail. But we also need more robust countermeasures.

Australia has a huge problem with ethnic organized crime groups that use underground financial systems to launder illicit proceeds and repatriate funds back to their home countries. Sometimes these underground financial systems are used for terror finance. In 2012, Australian law enforcement officials developed an effective enforcement tool to reduce money-laundering risks inherent in the money remittance sector and informal value transfer systems. It is called the Eligo National Task Force (ENTF). The ENTF initiative involves the Australian Crime Commission, the Australian financial intelligence unit (FIU)—AUSTRAC, the Australian Federal Police, Australian Customs and Border Protection Service, and local law enforcement. The ENTF also works collaboratively with representatives from the U.S. FBI and the DEA. Each member of the task force brings his or her particular areas of expertise and sources of information.

A wide range of ENTF countermeasures resulted in disruptions to criminal entities and identified hundreds of criminal targets previously unknown to law enforcement. The ENTF has uncovered dozens of separate money-laundering schemes in Australia, including some that are cleaning the proceeds of drug sales and filtering the money to exchange houses in the Middle East, which are then sending the money back to drug traffickers in South America.¹⁸ Eligo-initiated investigations have resulted in seizures of hundreds of millions of Australian dollars' worth of cash and drugs. Perhaps most importantly, the ENTF is fostering professionalism within the remittance sector. The Eligo National Task Force conducts outreach and even releases fact sheets for the remittance sector that give guidance on detecting and deterring money-laundering activity. This makes it more resistant to organized crime.¹⁹

I propose that the ENTF model be copied. Task forces should be established in the United States and other concerned countries. The argument could be made that the United States already has task forces aplenty: Joint Terrorism Task Forces (JTTFs), High Intensity Financial Crimes Areas (HIFCAs), High Intensity Drug Trafficking Areas (HIDTAs), SAR Review Teams, and others. But none of these task forces specifically concentrate on remittance and value transfer networks. Some observers will point out that remittance companies must register with FinCEN and be licensed in most of the states. They feel that is sufficient. The problem is that most problematical underground transfer agents do not follow the rules. By their very nature, they are “underground.” The same thing applies in other countries where underground financial systems are rife such as Pakistan, Afghanistan, India, and the UAE. All of these countries call for the registration and licensing of remittance dealers. They are also (chuckle, chuckle) supposed to file suspicious transaction reports with their country's FIU! In short, our current countermeasures for underground finance may look good on paper but they have proved ineffectual.

Specialized law enforcement task forces are effective. The concept has been proven around the world. A coordinated crackdown on remittance networks will give us insight into organized crime and terror finance and drive clients toward regulated and transparent money transfer companies that are not based on hidden trade-based countervaluation schemes.

I opened this book with a sobering taunt from our adversaries. Because of our inability to see and understand TBML and value transfer techniques that are hidden in plain sight, criminals and terrorists are laughing at us.

Yet I see promising signs that TBML in all it varied forms is finally being recognized as one of the primary methodologies criminals and their facilitators use to launder staggering amounts of money around the world. There is also increasing acknowledgment that curtailing the criminal use of TBML cannot succeed unless we also curb the commercial misuse of trade, such as trade misinvoicing and abusive transfer pricing. I am also hopeful because over the last few years, there have been incredible advances in analyzing the kind of big data that international trade generates. Increasing globalization and trade interdependency necessitate steps toward transparency and accountability.

While it is not realistic to eradicate TBML, it is entirely within our power to promote and implement trade transparency and associated countermeasures. There are tremendous benefits in doing so. I remain optimistic that we can meet the challenge presented in this next frontier.