Saturday, March 11, 2006 - Policing Trade to Nab Terrorists - Policing Trade to Nab Terrorists: New Effort Spots Illegal Exports Masking Money Laundering By ROBERT BLOCK

The U.S. government has quietly launched a program to crack down on the use of trade by drug lords, gangsters and terrorist financiers to mask money laundering.

It works like this: If an imported product is overvalued, the exporter receives an inflated price for the product, and wealth is shifted from the importer to the foreign exporter. Normally, this wouldn't be a profitable deal for the importer, but if the parties are in cahoots they can share the proceeds. Likewise, when a money launderer converts illicit cash into goods and then sends them abroad at below market prices, the importer can resell them at real market prices and thus transfer value out of a country under the noses of authorities.

In the first formal effort to combat these techniques, the U.S. in January teamed up with the governments of Argentina, Brazil and Paraguay to create "Trade Transparency Units" that allow the countries to share detailed information about each others' import and export transactions. Armed with a U.S.-designed data-mining computer program, investigators sift through the information looking for anomalies in commerce that could indicate terrorist financing or other criminal activity.

Panama, the Philippines and India, excited about the program's potential to identify tax fraud, have all expressed an interest since learning about the program from the State Department. But a shortage of funding is preventing a further rollout at this time, Ms. Myers says."

No comments: