Key takeaways
- The agent warns the bank early when that risk changes; financial crime, credit and trade teams decide what to do.
- In trade finance, an invoice can overstate or understate the goods to move money, the same invoice can be financed twice, and a shipment can pass through a sanctioned party or port.
- Each of those trade finance risks ends up on the book as a loss, a fine or a write-down.
Trade finance risk monitoring uses an agent to screen the counterparties, shipments and routes behind your letters of credit, documentary collections and supply chain finance for sanctions and money laundering risk, and to warn you early when that risk changes. Your financial crime, credit and trade teams decide what to do.
Trade finance moves value across borders on paper you did not write. An invoice can overstate or understate the goods to move money, the same invoice can be financed twice, and a shipment can pass through a sanctioned party or port. Each of those ends up on your book as a loss, a fine or a write-down.