Red Flag Indicators for Trade Based Money Laundering (TBML)

FINANCIAL MONITORING UNIT (FMU)
GOVERNMENT OF PAKISTAN
2ND FLOOR, SBP MAIN BUILDING, I.I. CHUNDRIGAR ROAD, KARACHI 4400

FMU-Circular No. 02 of 2025 March 27, 2025

To: All Concerned Reporting Entities

Red Flag Indicators for Trade Based Money Laundering (TBML)

In terms of Section 7 (1) of the Anti-Money Laundering Act, 2010, all the reporting entities are required to promptly report Suspicious Transactions Reports (STRs) to FMU for potential ML/TF related activities.

2. To enhance the detection and reporting of suspicious trade-related activities, FMU has developed a comprehensive set of Red Flag Indicators for Trade-Based Money Laundering (TBML). These indicators aim to assist reporting entities in identifying suspicious trade transactions that may be linked to illicit financial flows, trade mis-invoicing, over/under-invoicing, phantom shipments, and other TBML methodologies.

3. All reporting entities directly or indirectly involved in facilitating trade transactions must incorporate these Red Flag Indicators into their AML/CFT monitoring frameworks. Reporting entities are expected to use these indicators as part of their risk assessment and transaction monitoring processes to improve the quality and effectiveness of TBML-related STR submissions via goAML.

4. The detailed Red Flag Indicators for TBML are enclosed with this circular for guidance and implementation.

5. The compliance of these red flags must be ensured by all the reporting entities.

Encl: “Red Flag Indicators for TBML”

Yours truly,

Sd/-
(Sumera Baloch)
Additional Director

Copy to:
The Governor, State Bank of Pakistan (SBP)
The Chairman, Securities and Exchange Commission of Pakistan (SECP)