Understand the trade connection
AUSTRAC’s trade-based money laundering guide examines misuse of trade and provides indicators and case studies. Its examples are a way to understand risk, not a rule that unusual trade proves crime. Compare the commercial documents, goods movements and payments. Each provides different evidence about the transaction. The guide is historical threat material, so current legal reporting requirements must come from current guidance. This explanation does not provide customs classification, pricing advice or a determination about a particular shipment.
- Commercial purpose
What does the customer say the trade achieves?
- Documents
Do invoices and available shipping information fit?
- Payments
Are payer and recipient relationships explained?
- Review
Record evidence, uncertainty and the decision.
Compare the trade explanation
Illustrative workflow. Read the page and current primary guidance for conditions and exceptions.
Connected concepts. Lines do not show ownership or a reporting hierarchy.
How trade can move hidden value
Trade can shift value through the price, quantity or description of goods. AUSTRAC describes over-invoicing, under-invoicing, repeated invoices for one shipment, false goods descriptions and shipments that never occur. These methods create a difference between the stated commercial purpose and the value actually transferred. A high price alone is not proof: quality, freight or contract terms may explain it. The useful question is whether reliable trade evidence explains the difference. A reviewer should not invent a market price when specialist knowledge is needed.
Worked example: an unrelated payer
Imagine an importer gives an invoice for a routine shipment, but payment arrives from a company with no explained relationship to the buyer. The example reviewer asks how the payer relates to the trade. A financing arrangement could provide a legitimate explanation. Conflicting or missing records may leave the issue unresolved. The review documents the explanation and supporting evidence before deciding the next step. It does not conclude that a third-party payment is inherently unlawful or that every financing arrangement is acceptable.
Use indicators to ask better questions
In the example, a single mismatch is a starting point for review. The reviewer considers whether other facts reinforce or resolve the concern. The result might be a corrected document, a supported explanation or an escalation. Avoid scoring the number of unusual features as if it mechanically establishes an offence. An indicator starts an enquiry; it does not establish its outcome. The business should apply its approved process and current reporting guidance to the actual information available.
Identify the trade information your staff receive
A suggested training exercise asks which trade information the business actually receives and where it could identify an inconsistency. A bank, accountant and goods trader may see different parts of the same transaction. The exercise should assign realistic actions to the relevant role rather than require staff to investigate the entire supply chain. Keep the evidence and decision traceable. This page introduces a threat pattern; it does not determine whether a business is a reporting entity or supply a complete trade-finance compliance program.