By Hassan Zebdeh, Financial crime advisor and senior product development manager at Eastnets
“Still waters run deep.” Few expressions describe trade-based financial crime (TBFC) more accurately. Hidden beneath the surface of legitimate global trade, illicit value continues to move quietly across borders—masked by complex documentation, inconsistent regulations, and outdated systems that were never designed to detect sophisticated financial crime.
Each year, trade-based financial crime is estimated to drain $1.6 trillion from the global economy—funds that could otherwise support development, infrastructure, and financial stability. Instead, these resources are redirected into criminal networks, weakening economic integrity and undermining international security.
Recent assessments, including Europol’s Serious and Organised Crime Threat Assessment (EU-SOCTA 2025), underline the growing severity of the issue. Organised crime groups are increasingly exploiting advanced technologies, including artificial intelligence, to scale their operations and take advantage of fragmented digital infrastructures. Yet despite its scale and impact, TBFC remains one of the least detected and least understood forms of financial crime.
Why, when the risks are well documented, does trade-based financial crime continue to evade effective control?
What Is Trade-Based Financial Crime and Why Does It Matter?
Trade-based financial crime refers to the manipulation of trade transactions—such as over- or under-invoicing, falsified shipping documents, or misrepresentation of goods—to move illicit funds across borders under the cover of legitimate commerce. Unlike traditional financial crime, TBFC hides within high-volume trade flows, making it exceptionally difficult to detect.
Trade finance is often viewed as inherently low risk. Transactions are supported by documentation, governed by regulation, and tied to the movement of physical goods. However, this perceived safety is precisely what makes trade finance such an effective channel for abuse. Criminal networks understand the complexity of global trade and exploit its weakest points with precision.
Mispriced invoices, falsified bills of lading, or containers declared as carrying “machinery parts” while transporting dual-use or restricted goods often appear unremarkable in isolation. At scale, however, these inconsistencies form complex networks capable of moving billions of dollars across jurisdictions with minimal visibility. TBFC is now estimated to account for around 31% of global fraud costs, placing it among the most damaging threats to international trade.
Why Trade Finance Remains Vulnerable to Financial Crime
One of the core challenges in combating trade-based financial crime lies in the structure of the trade finance ecosystem itself. Documentation is fragmented across multiple parties, systems, and jurisdictions, while TBFC risk management is typically split across three or four departments within a single institution.
Nearly 60% of European banks cite siloed data and disconnected workflows as major operational challenges. These gaps limit oversight and create blind spots that criminals are quick to exploit. What should be connected intelligence becomes scattered information, reviewed in isolation rather than as part of a broader risk picture.
This challenge is compounded by an increasingly volatile regulatory environment. Sanctions lists, export controls, and regulatory requirements can change daily—sometimes hourly. Yet many compliance teams remain dependent on legacy systems and manual checks, struggling to keep pace with the speed and scale of modern trade.
At the same time, financial crime is evolving. Fraud, technology, and organised crime are converging, reshaping how illicit networks operate. Criminals are already leveraging generative AI to scale deception, falsify documentation, and adapt tactics rapidly. Outdated tools and manual processes simply cannot match this level of sophistication.
Without investment in modern detection capabilities, institutions risk falling behind—exposing themselves not only to financial losses, but also to regulatory enforcement, reputational damage, and operational disruption. Effective TBFC detection must move beyond surface-level checks and focus on uncovering the deeper patterns that reveal illicit activity.
Why Existing Controls Fail to Detect TBFC
Traditional trade compliance frameworks were not built for today’s environment. They rely heavily on rule-based checks, static thresholds, and manual review processes that struggle with scale, complexity, and speed.
Individually, anomalies may appear insignificant. But trade-based financial crime is rarely revealed by a single red flag. It emerges through patterns—across transactions, counterparties, shipping routes, and jurisdictions—that only become visible when data is connected and analysed holistically.
This is where many institutions fall short. Data remains fragmented, oversight is reactive, and investigations are often limited to box-ticking exercises rather than intelligence-led analysis. As a result, TBFC continues to operate in the blind spots of global trade.
How Technology Is Changing Trade-Based Financial Crime Detection
To effectively address trade-based financial crime, financial institutions must adopt a layered digital defence—one that integrates automation, artificial intelligence, and advanced monitoring into existing trade finance operations.
Automation provides the foundation. By connecting invoices, bills of lading, shipping data, and counterparty information across jurisdictions, automation enables real-time cross-checking and exposes inconsistencies that would otherwise remain buried in paper-based processes. Continuous screening against evolving sanctions and watchlists helps institutions maintain consistent compliance across global operations, forming the early building blocks of what is emerging as a digital compliance record for each trade.
Artificial intelligence extends these capabilities further. Pattern recognition models can identify behaviours such as overpricing, under-invoicing, or the misuse of dual-use goods—activities that rarely trigger suspicion through manual review alone. Natural Language Processing transforms unstructured data, including scanned documents and handwritten forms, into structured information that can be analysed at scale. Generative AI adds another layer by validating product descriptions against external market data and highlighting anomalies that would otherwise pass undetected.
The final layer is advanced monitoring. Integrated dashboards bring automation and AI together, providing compliance teams with real-time visibility across global trade flows. With access to maritime intelligence, for example, unusual shipping routes, sudden vessel ownership changes, or transactions routed through high-risk ports can be flagged instantly. What was once a reactive process becomes proactive, investigative, and intelligence-driven.
Together, these technologies restore the balance. Compliance teams are no longer overwhelmed by documentation, but empowered with insight—able to uncover what criminals work hard to conceal, at the same speed those criminals continue to evolve.
Turning the Tide Through Innovation and Embedded Trust
The convergence of automation, AI, and advanced monitoring represents the most effective opportunity yet to combat trade-based financial crime at scale. However, technology alone is not enough. What ultimately matters is how institutions use these capabilities to embed trust directly into trade processes.
This requires challenging the long-standing assumption that trade finance is inherently safe. As long as that myth persists, TBFC will continue to thrive in the spaces no one is watching. Institutions that fail to modernise are not only exposing themselves to penalties and reputational risk—they are placing the integrity of global trade itself at stake.
The choice is clear.
Financial institutions can embrace innovation, improve visibility, and illuminate the hidden depths where trade-based financial crime operates. Or they can remain blind to the reality that still waters, in fact, run deep.