From Goods to Money: The Financial Architecture of Illicit Trade; Illicit Shadows Investigative Docuseries: StoryTelling/Powerful Narratives on Why Fighting Illicit Economies Matters

From Goods to Money: The Financial Architecture of Illicit Trade (OECD Forum on Countering Illicit Trade, Session 4 – Panel Discussion), March 18, 2026, OECD Conference Centre, Paris, France: This OECD Forum panel examined the financial underpinnings of illicit trade, exploring how illicit supply chains are enabled, financed, and concealed across borders and sectors. Beyond the movement of goods, illicit trade is often driven by financial objectives—facilitating hidden payments, servicing debts, reallocating wealth, or bypassing financial and trade restrictions through trade-based money laundering and related schemes.

The discussion provided a shared understanding of how these mechanisms operate in practice, where systemic vulnerabilities lie, and how trade transactions are manipulated to disguise the true flow of value.

Panelists also identified priority areas for policy and enforcement collaboration, assess the respective roles of customs, financial intelligence units, supervisors, and private financial institutions, and discuss recent trends in trade-based money laundering.

The session further explored how riskassessment tools can help detect vulnerabilities in both mainland economies and free trade zones, and how closer integration of trade oversight and financial supervision can disrupt illicit financial flows while preserving legitimate commerce.

Moderator: Chris Martin, Assistant Director, HM Revenue and Customs (HMRC), United Kingdom, CoChair of the OECD Working Party on Countering Illicit Trade (WP-CIT)

Panelists:

• Yevhenyi Umanets, Anti-Money-Laundering Adviser, Corruption and Economic Branch, UNODC
• Dr. Layla Hashemi, George Mason University, Hubs of Illicit Trade Project
• David M. Luna, Founder and Executive Director of the International Coalition Against Illicit Economies (ICAIE), Co-Founder, Illicit Shadows Investigative Docuseries
• Elodie Beth, Senior Manager, Anti-Corruption Division, OECD DAF

David M. Luna — Prepared Points

• First, Let me start by underscoring this morning on the transforming global financial architecture and how money laundering schemes are changing from bulk cash and earlier forms to even more sophisticated ones include hawala, TBML leveraging technologies, digital assets, mobile phones for m-payments for example, and underground banking.

• We are seeing a very active evolution in money laundering.

• Whereas money or value has long been transferred without actually moving, it is now being transferred via mobile payments, mirror swaps, digital assets, cryptocurrency transactions, decentralized finance (DeFi) platforms, end-to-end encryption-powered apps, and other novel digital-technological means that facilitate anonymity and underground criminality (outside of regulated financial systems and evading law enforcement).

• Financial crimes investigators are often hard pressed to “follow the money” if it stays in place.

• In short, money is no longer money in the conventional sense of the term. And it no longer “moves” as it did in the past.

• The challenges are greater than ever. So is the criticality of our efforts to impede the spread of illicit funds.

• Across today’s global security landscapes, a global network of trade, commerce, and illicit activities is thriving where the selling and buying of legal and illicit goods and services take place through electronic and digital payouts across online connections, the global trading systems, e-commerce marketplaces, apps, social media, and encrypted channels.

• As such, this new global market architecture is exploited by criminals to move dirty funds in all corners of the globe through digital technologies, the internet, mobile phones, and data-driven AI, IoT, and cloud/quantum computing.

• Globalized trade and tariff rows have also created new arbitrage opportunities for criminal across low-tariff markets, trans-shipment points, fraudulent schemes that misuse country of origin declarations, and trade-based money laundering often using cryptocurrency for payment settlement.

• As international trade and commerce are further digitized, the evolution of today’s payment systems has also altered the security landscapes to detect and fight money laundering and financial crime, especially as markets shift towards digital currencies and a cashless economy where “value” becomes the operative payment method for transactions.

• Criminals have seized on globalization that exploits digital commerce to finance an international ecosystem of criminality and illicit trade that is siphoning trillions of dollars from legal economies.

• The IMF estimates that between 2-5% of world GDP accounts for the magnitude of international money laundering (or up to $6 trillion based on the global economy – $117 trillion in GDP – in 2025). Of course, it depends on what is included in the count.

• We don’t know the IMF’s dated internal calculations and methodology in deriving its estimate. But it doesn’t appear, for example, tax evasion is included in the IMF estimate. Yet tax evasion is a now a predicate offense for money laundering in many countries and jurisdictions.

• Forms of underground financing and even capital flight are also not included. Trade-based money laundering is probably underestimated.

• As this report elaborates, new forms of money laundering are rapidly escalating such as those driven by artificial intelligence and crypto-currencies.

• The dirty monies derived from today’s criminal activities are laundered across commercial markets, e-commerce platforms, free trade zones (FTZs), financial safe havens, and hubs of illicit trade that are not only reinvested in profitable industries, but also leveraged to finance greater insecurity and violence around the world.

• Criminals and threat networks are connected through a global pipeline of professional enablers and service providers who exploit advances in technology, transportation and other critical infrastructure for the illicit enrichment of their clients.

• Illicit economies are pervasive threats that undermine democracy, corrode the rule of law, fuel impunity, imperil effective implementation of national sustainability and economic development strategies, contribute to human rights abuses and enflame violent conflicts.

• The lucrative multi trillion-dollar global illicit economy includes an array of cybercrimes as well as the smuggling and trafficking of narcotics, opioids, weapons, humans, fake medicines, counterfeit and pirated goods; illegal tobacco and alcohol products; illegally harvested timber, wildlife and fish; pillaged oil, diamonds, gold, natural resources and critical minerals; and other illicit commodities and contraband.

• Money launderers and criminal enablers are very nimble and adaptive and are constantly finding more ways to reinvest filthy lucre into the legitimate global economy. In this regard, newer illicit finance methodologies surface in changing security landscapes and money (and value) trails in both the physical banking system and the criminal underworld

•  as enablers disguise and launder the proceeds of their clients’ illegal activities by exploiting anonymous shell companies in jurisdictions designed to be opaque, along with financial havens and multiple forms of trade-based money laundering.

• Transaction laundering takes advantage of the seams and vulnerabilities in the global financial system and the digital world. In this newer reality, illicit finance trends continue to evolve including in emerging digital markets and underground banking systems through pseudo-anonymity, digital assets, and a lack of uniform regulation related to crypto and virtual currencies, Non-Fungible Tokens (NFTs), and online gaming and decentralized finance (DeFi) platforms.

• Crypto crimes continue to increase significantly in recent years, with illicit crypto volume reaching an all-time high of $158 billion in 2025, up nearly 145 percent from 2024 increasing use of stablecoins by illicit actors.

• Artificial Intelligence (AI) is increasingly leveraged by criminals to further their money laundering operations by obscuring the origins of illicit funds, bypass or evade Know Your Customer (KYC) and AML monitoring and detection systems including crypto mixers and tumblers.

• Moving forward, we must apply “whole-of-society” approaches, leveraging public-private partnerships to enhance information – and intelligence – sharing to better target criminals’ illicit trafficking operations, their corruptive influence, and the laundering of the dirty monies.

Crime Convergence across Digital World: Transaction Laundering

• Today, illicit trade and transaction laundering – massive across e-commerce platforms, online marketplaces, and social media – are booming, as more and more criminalized digital markets become lucrative including counterfeits, pirated and stolen products, and other illicit goods and contraband that transverse borders and communities, and enter our supply chains, businesses, and homes.

• Due to the recent expansion of e-commerce and e-banking operations, online sales of illicit goods and services are generating billions of dollars for criminal networks through digital payment processing systems and value-based mobile technologies.

• Cybercrimes across the digital world result in lost revenue and market share for legitimate business enterprises; theft of intellectual property, trade secrets, and critical data; job displacement for workers and business closures; increased costs of doing business overseas; and diminished brand integrity and market reputation value.

• In this ecosystem of criminality and fraud, counterfeiters and money launderers alike are similarly exploiting legal, regulatory, and law enforcement vulnerabilities to leverage anonymity in establishing online stores through the incorporation of anonymous shell companies, as well as the use of anonymous payment systems to enter e-commerce markets to transact in numerous criminalities.

• While counterfeiters and money launders target all aspects of the retail supply chain to traffic illicit goods, e-commerce is also increasingly used to sell illicit or stolen goods, and to launder dirty money derived from predicate crimes and cross-border illicit activities.

• Often, transaction laundering includes the formal financial and banking system, unregulated payment gateways, and some payment systems of e-commerce platforms.

• However, even with an array of illicit activities and transaction laundering being conducted across e-commerce platforms and digital marketplaces, one report estimates that only nine percent of retailers view e-commerce crime as a priority.

• Like TBML, daigou, which translates to “buying on behalf of, ” is also growing problem for trade fraud and money laundering. It is much better known in the United Kingdom, Australia, and other developed countries that are popular with Chinese tourists and buyers.

• In daigou schemes, individual or organized groups of Chinese (or Asian) buyers in foreign countries purchase high demand brand-name luxury goods, smart phones, high-end computers, infant formula, and other in-demand commodities for re-sale in China.

• Daigou activities are generally found in grey markets; using loopholes to circumvent import tariffs and taxes imposed. In the United States, such goods purchased in the country are subsequently exported/transported to China and Hong Kong.

• Funds or value cards used to purchase these goods from U.S. retailers, including Apple products such as iPhones and luxury goods, are increasingly sourced from criminal activities – including drug trafficking and fraud. Collectively, these goods are consolidated by organized Chinese criminal groups operating throughout the United States (and elsewhere) and subsequently exported using express consignment shipments.

• Other transaction-based money laundering can occur through stolen identities, credit/value cards, or other forms of digital currencies including cryptocurrency.

• According to the U.S. Department of the Treasury, the use of prepaid cards is growing rapidly. Prepaid cards (also referred to as prepaid debit cards, stored value cards, or prepaid access devices) are a type of prepaid access that enables preloading, and in some cases, reloading of funds onto physical or digital cards.

• In some cases, criminals can also steal the identity of a shopper’s banking or credit card information through scam calls to pay for goods and services through digital marketplaces, or to transfer funds to other accounts or digital wallets via online payment platform (e.g., Peer-to-Peer (P2P) payments.

• In recent years, the U.S. Department of Justice has prosecuted individuals for laundering gift cards purchased by telephone-scam fraud victims at Target stores (and other retailers) across the United States.

• A recent Federal Reserve Payments Study found that, on average, the number of prepaid card transactions increased by 9.6 percent per year from 2018 to 2021, and the value of prepaid card transactions grew by 20.6 percent per year, compared with 12.7 percent for debit cards and 7.0 percent for credit cards.

• The exponential growth of social media and its role in e-commerce have also directly related to the growing threat of mobile payments and money laundering.

• In 2025, over 5 billion people or an estimated 62% – 69% of the world’s population were using social media.

• The average daily usage is 2.5 hours. Worldwide, the number of social media users is projected to increase to 6 billion by 2027.

• According to the Pew Research Center, 84% of adults and 81% of teens in the U.S. use social media: YouTube (84% user rate), Facebook (71% user rate), and Instagram (50% user rate) are among the most popular platforms, while TikTok increasingly being used by teens.

• Usage of online platforms varies by factors such as age, gender and education. In the U.S. market, both large and increasingly, small social media platforms integrate embedded shopping features.

• Simultaneously, digital platforms are also more and more susceptible to different types of fraud and illicit finance as criminals leverage speed, volume, and anonymity of online marketplaces and social networking platforms including through digital wallets, credit and value cards, and virtual banking transfers.

• “This convenience also creates many low-friction entry points for illicit funds. ” Criminals exploit these features by returns and refunds, vouchers, staged purchases, and multi-account schemes to obscure the money trail. Some even use high-value goods as a store of value, and create fake e-stores that generate phantom sales.

Some Money Laundering Typologies Across E-Commerce & Social Media

Fake E-Commerce Store Laundering and Digital Fakes: Money launderers create shell e-commerce sites or replicate legitimate e-commerce platforms often digital fakes solely to generate fictitious transactions. Illicit funds are processed through payment gateways to accounts that criminals control, without any actual goods or services being exchanged (sometimes called “ghost laundering”).

Return/Refund Laundering: Criminals purchase expensive luxury goods with illicit funds or stolen credit or value cards, then return the merchandise to obtain “clean” refunds to a legitimate bank account or card.

TBML Mispricing Schemes: Transactions involve goods that are significantly overpriced or undervalued to discreetly move large sums of money. For example, a high-value item might be “sold” for a fraction of its cost to transfer value, or a cheap item might be sold for a vastly inflated price to clean money. [Learn more in TBML Section above]

Gift Cards/Voucher/Coupon Laundering: Cybercriminals convert illicit cash into store credit, gift cards, or vouchers, which may be resold in the open market or transfer the “value” into legitimate accounts.

Arbitraging Fake Vendors: Criminals use multiple marketplaces, currencies, and payment systems including creating fake merchants or partnering with greedy, complicit vendors to process payments to obscure the fund origin.

Influencer Collusion and Mule Networks: Criminals exploit social mediainfluencers with large followers and sales or to promote counterfeit and fake products and then use their bank accounts to pass illicit funds and commingle them with their legitimate income. Often times, the social media influencers are often recruited as “money mules, ” either knowingly or unknowingly, to move money through their personal accounts in exchange for a solid percentage of the funds.

Account Takeover: Criminals use networks of compromised or synthetic accounts to make numerous smaller transactions (“smurfing”) and funnel payments across several legitimate accounts.

In-Game Currencies and NFTs: Online gaming and e-commerce-like marketplaces for digital assets (such as NFTs) are used to convert illicit funds into virtual currencies or assets. These can be traded across different accounts and platforms before being converted back into real-world currency, adding layers of complexity and anonymity.

Why has international trade become such an attractive channel for criminals to move and hide illicit money especially TBML?

• International trade has become a highly attractive channel for criminals to move and hide illicit money, including through a practice known as Trade-Based Money Laundering (TBML), because it allows them to disguise illegal funds within the massive, complex volume of legitimate global commerce, often operating “in plain sight”. 
• TBML is the process of disguising illicit proceeds and moving value through trade transactions to legitimize their origins. It involves manipulating invoices (over/under-valuation) or shipping documents (ghost shipping) to move money across borders under the guise of legitimate commerce, falsifying the value, quality or quantity of the transacted goods (or services).

Why International Trade is Attractive to Criminals

• “Hiding in Plain Sight” (Volume): With over 250 to 300 million containers moving annually, only 2-5% are physically inspected, providing an immense, low-risk opportunity to move funds.
• Complexity and Lack of Visibility: International trade is often paper-based and highly complex, involving multiple parties, jurisdictions, and intermediaries, making it difficult for financial institutions and authorities to connect payment information with physical goods.
• Disconnect Between Trade and Finance: Financial institutions generally process payments and may not verify the physical goods behind the transactions, while customs authorities focus on contraband rather than financial discrepancies, leaving a gap exploited by criminals.
• Ease of Value Transfer: Criminals can quickly shift vast amounts of value across borders by misrepresenting the price, quantity, or quality of goods, which is harder to track than traditional cash transfers.
• Use of Legitimate Fronts: TBML often involves complicit legitimate businesses, making the transactions appear routine and reducing the likelihood of detection. 

Common Techniques to Move Illicit Money

• Over/Under-Invoicing: Manipulating the value of goods on an invoice. For example, over-invoicing exports lets criminals receive more money from abroad, legitimizing illegal funds as trade revenue.
• Multiple Invoicing: Issuing multiple invoices for a single shipment of goods to justify multiple payments for the same item.
• Over/Under-Shipment: Falsifying the quantity of goods shipped, which can involve “phantom shipments” where documentation is generated, but no goods exist, allowing money to be moved on paper.
• Mislabeling Goods: Describing high-value items as low-value goods (or vice-versa) to move value or evade detection.
• Black Market Peso Exchange (BMPE): A technique commonly used by drug cartels where illicit dollars are used to buy legitimate goods, which are then shipped to another country and sold, converting dirty cash into clean, local currency. 

Challenges for Detection
TBML is considered one of the hardest types of money laundering to detect because it often involves the willing collusion of both the importer and exporter, meaning there is no aggrieved party to report the crime. Additionally, the sheer volume and pace of trade make manual tracking impossible, and many jurisdictions lack the specialized training needed to identify trade anomalies.

Illicit Shadows™ Project

On March 18, 2026, ICAIE and Sam RAD/RADOC Original Creations also held a series briefings and meetings in Paris at the OECD informing new partners and communities on our ILLICIT SHADOWS investigative docuseries, starting with Season I Episode on the Chemical (Fentanyl) Cartels in North America and their shadow economies now streaming on YouTube.

Illicit Shadows is an investigative docuseries and multimedia project that exposes the dark forces of the global criminal underworld. It covers illicit pipelines—including the illegal trade in fentanyl and synthetic opioids, illegal mining, and an array of illicit trafficking activities—that exploit gaps in governance, trade, and technology, often through an unseen networks of illicit markets and criminalized economies around the world.

From the dense forests of the Amazon to the bustling ports and free trade zones around the world, from the cyber battlegrounds of Eastern Europe to the hidden safe financial havens of the West, Illicit Shadows™ reveals the complex web of interactions and influences that drive illicit trade and impact global security.

Each episode is a journey into the heart of a shadowy underworld, where geo-security malign influence operations, economic manipulations, and human struggles converge with corruption, money laundering, and criminality, painting a vivid picture of a reality that, while hidden, impacts us all.

#EverythingIsConnected

Other Key Illicit Shadows™ Programmatic Streams:

• The Museum of Illicit Shadows (MIS): A forthcoming virtual knowledge hub and digital museum designed to provide interactive insights into global criminal underworld and the harms of illicit trade. Through exhibitions, research, and public programming, MIS examines how crime convergence—from narcotics and counterfeit goods to human and environmental trafficking—threatens global communities and international security.
• Project Helix & Predictive Convergence System (PCS): A technology initiative aimed at creating a predictive intelligence system to anticipate and analyze the intersection of illicit threat vectors, global supply chain risks, and threat finance/transaction laundering nodes. 

The initiative aims to illuminate the “Shadowverse” of global criminality, providing data-driven stories and strategic narratives to inform global communities on the harms and impacts of illicit economies, and to foster public-private partnerships, strengthen countermeasures, and develop resiliency to fight illicit trade and organized crime.