July 06, 2011 (LBO) – Documents used for international trade such as bills of lading are easily forged, a maritime fraud expert has warned Sri Lankan shippers, saying physical verification of cargoes would help reduce risk. “They don’t get resolved quickly and can take years – many banks have been caught in that position.” “Trade finance today is wide open to manipulation,” declared P Mukundan, director of the International Maritime Bureau, an industry body which probes trade fraud and runs the Piracy Reporting Centre giving information on piracy attacks.
The reliance on documents to make payments for cargo shipments makes it attractive to sophisticated criminals looking to launder money.
“Trade finance is used by South American drug smugglers and others to clean their dirty money into clean money,” Mukundan told a forum on maritime crime and trade malpractices organised by the International Chamber of Commerce Sri Lanka and the Shippers’ Academy Colombo.
With commercial systems based on the premise that they are meant for the use of honest buyers and sellers and not intended to prevent fraud, it was possible for determined fraudsters to dupe gullible shippers and their banks.
“A good analogy is emails