Spotting Trade-Based Money Laundering: CBP’s CTPAT Warning Indicators
- Madni Laghari
- Jul 20
- 5 min read
CBP’s new CTPAT guidance reveals must-know warning signs of trade-based money laundering—essential reading for compliance professionals.
Customs compliance is a fast-moving, high-stakes world, and every importer, exporter, and Customs Consultant must be vigilant to keep illicit financial flows out of legitimate trade. In July 2025, U.S. Customs and Border Protection (CBP) released pivotal new guidance under the Customs Trade Partnership Against Terrorism (CTPAT) spotlighting dozens of warning indicators for trade-based money laundering (TBML) and terrorist financing. This isn’t just a bureaucratic update: it’s a wake-up call for anyone who values trade compliance and the integrity of cross-border business. Today, I’ll walk you through what’s changed, why it matters, and how you can protect your business and reputation.
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Key Questions Covered in This Blog:
What are the latest CTPAT warning indicators for trade-based money laundering and terrorist financing?
Why are these indicators critical for Customs, Import, and Export Compliance professionals?
How should importers, exporters, and compliance officers implement risk-based partner screening and monitoring?
What practical steps can be taken if suspicious activity is detected?
Abbreviations Used In This Blog:
CBP: Customs and Border Protection
CTPAT: Customs Trade Partnership Against Terrorism
TBML: Trade-Based Money Laundering
FATF: Financial Action Task Force
ICE: Immigration and Customs Enforcement
“Illicit finance exploits the seams of global trade—your vigilance as a Customs professional is the single best defense.” “Arne Mielken, Managing Director, Customs Manager” |
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What are the latest CTPAT warning indicators for trade-based money laundering and terrorist financing?
The July 2025 CBP bulletin is a landmark for U.S. Customs professionals, spelling out around 50 warning indicators for TBML and terrorist financing. These aren’t just theoretical—they’re based on real-world cases where criminals and terrorist organizations have misused global trade to move illicit funds. The list is exhaustive: receipt of cash from unrelated third parties, obvious over- or under-pricing, discrepancies in goods descriptions, shell companies, and carousel transactions (where goods cycle repeatedly between borders) are just the start.
CBP also spotlights inconsistent shipping routes, suspicious documentation, sudden surges in transaction sizes, and links to high-risk jurisdictions or commodities (such as precious metals, military goods, or dual-use technology).What’s critical here is context: a single red flag might be innocent, but patterns and combinations demand scrutiny. The bulletin urges Customs and Trade Compliance officers to use a risk-based approach—and to combine these signals with other intelligence sources like the FATF, ICE Trade Transparency Unit, and OFAC lists.
Why are these indicators critical for Customs, Import, and Export Compliance professionals?
You might be thinking: “Isn’t this just more compliance paperwork?” I get it. But the reality is far more urgent. TBML is one of the top ways criminals and terrorists launder and move dirty money through legitimate global commerce. If your business or your client’s supply chain is infiltrated—even unknowingly—you face not just reputational harm but the real risk of criminal prosecution, asset freezes, and loss of Customs privileges.
CBP’s guidance elevates the standard: CTPAT members are now explicitly required to have written, risk-based processes for partner screening and monitoring, with special focus on financial soundness and anti-money-laundering (AML) controls. For anyone in Import, Export, or Customs Consulting, these standards will set the bar for audits, due diligence, and even insurance requirements. Ignoring them is not an option.
How should importers, exporters, and compliance officers implement risk-based partner screening and monitoring?
Let’s make this actionable. A robust risk-based process means you actively screen new business partners and continuously monitor existing ones. Don’t just tick boxes—ask the tough questions:Is this partner’s business profile consistent with their shipments? Is there a pattern of high-value commodities cycling through multiple borders, or payments arriving from unexpected sources? Can they provide full documentation—no gaps, no excuses?
You’ll want to build in red flag checks from the CBP bulletin:
Any cash receipt over $10,000 must be reported (FinCEN Form 8300).
Look for mismatches between goods descriptions and actual goods, unexplained shipping routes, and shell companies.
Always check the background of directors, addresses, and beneficiary names—multiple identities or sudden changes can signal illicit activity.
A risk-based approach means documenting why you trust (or don’t trust) a partner, not just that you did the paperwork. Leverage the latest CTPAT and FATF resources, and make sure staff training is up to date.
What practical steps can be taken if suspicious activity is detected?
If you spot a pattern of warning indicators—don’t ignore it. CBP urges CTPAT members (and frankly, all importers and exporters) to escalate concerns immediately:
Contact your local ICE office (ICE Contact Page)
Email: ReportTBML@ice.dhs.gov
Call toll-free: 1-866-DHS-2423
It’s better to over-report than under-report: failing to act could put your business at legal and financial risk. And always document your actions—every step, every decision.
Arne’s Takeaway
Vigilance is your greatest asset in trade compliance. The new CTPAT guidance isn’t just a checklist; it’s a toolkit to help you detect and disrupt criminal abuse of the global trading system. Make partner screening and ongoing monitoring part of your culture—not just a box-ticking exercise. It’s not only about protecting your business, but about defending the integrity of international trade itself.
Expert Recommendations
Review and update your partner screening protocols to incorporate the full list of CBP warning indicators.
Train all staff involved in compliance, onboarding, and logistics on these new red flags—awareness is power.
Leverage technology (screening software, watchlists, and automated alerts) to support manual checks and reduce human error.
Document everything. A clear audit trail can be your strongest defense if questioned by authorities.
Sources & Further Information
FATF High Risk Jurisdictions
FinCEN Form 8300 Guidance
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Disclaimer
This blog is for informational and educational purposes only and does not constitute legal advice. For specific legal or compliance issues, consult with a qualified professional.
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