international law quarterly
winter 2015 • volume XXXII, no. 3
The Black Market Peso Exchange, continued
meantime, Anytown’s bank severs its banking relationship with the company, and the government retains possession of funds that Anytown Wireless, a small company, may need to pay accounts payable and remain in business. How can such a disaster be avoided in the first place?
Avoiding Being an Unwitting Accessory to TradeBased Money Laundering To avoid being caught in the web of trade-based money laundering through the BMPE, a small exporter must be diligent in ascertaining exactly who is paying for its exports and cannot rely only on what appears to be the legitimacy of its business relationship with its known customers. Although it is not illegal in and of itself to receive wire transfers from third parties to a transaction, when the small exporter receives a wire into its account from an unknown third party to pay for goods exported to a known customer, the question must be asked: Why? What is the business reason for receiving payments from an unknown third party unconnected to the underlying transaction, besides providing an opportunity for and enabling that third party to launder illicit funds through international trade? Is the third party actually a related entity to the foreign customer? Another supplier of the foreign customer with whom the customer has a legitimate business credit? A legitimate financing or factoring entity? A relative of the owner or other person for which there may be a business or personal reason, inconsistent with money laundering, for making third-party payments? If the foreign customer insists on making payments only through third parties that are unknown even to the foreign customer itself, FINCEN’s red flags teach that the transaction has a high probability of being part of tradebased money laundering through the BMPE. Inadequate due diligence in the records of the small exporter regarding a wire transaction with such red flags may be the proverbial kiss of death when law enforcement is evaluating whether the small exporter is an unwitting dupe or an intentional participant. A small exporter (and its principals/officers) accepting such payments without being objectively satisfied as to their legitimacy does so at its own risk of incurring civil forfeiture and potentially criminal liability for either intentional engaging in, or
being willfully blind that it is engaging in, a conspiracy to commit money laundering. For a small company, exporting can be extremely lucrative, but without adequate knowledge, training, experience and diligence regarding the acceptance of payments for such exports, exporting can also be a money-laundering disaster waiting to happen for the unwary. Obtaining advice from experienced counsel and professionals regarding IVTS and BMPE transactions may be the difference between survival and extinction for the small exporter in these turbulent international waters. Robert J. Becerra of Becerra Law, P.A., is a Florida Bar board certified specialist in international law. He concentrates his practice in the areas of civil and white collar criminal litigation in matters involving international trade, including exports, imports, cargo losses, R. BECERRA trade-based money laundering, export enforcement, customs and FDA seizures and investigations and civil forfeitures. Becerra Law, P.A., is based in Miami, Florida.
Endnotes
1 The International Trade Administration web page on the National Export Initiative, found at http://trade.gov/nei/, 22 December 2014. 2 FINCEN Advisory FIN-2010-A0001, 18 February 2010. 3 Understanding and Detecting the Black Market Peso Exchange, Evan Weitz and Claiborne Porter, United States Attorneys’ Bulletin, September 2013. 4 Where Does the Money Come From? Illegal Drugs, Due Diligence and Company Accounts, David L. Goldberg, ABA Business Law Section, Volume 12, Number 3, January/February 2003. 5 FINCEN Advisory FIN-2010-A001; FINCEN Advisory, FIN2014-A005, 28 May 2014. 6 FINCEN Advisory, Issue No. 33, March 2003. 7 FINCEN Report to Congress in Accordance with Section 359 of Patriot Act, November 2002. 8 Walter Perkel, Money Laundering and Terrorism, Informal Value Transfer Systems, 41 Am. Crim. L. Rev. 183 (Winter 2004). 9 Javier Sarmiento, CFE, CPA, Black Market Peso Exchange: An International Scheme; Fraud Magazine, July/August 2007. 10 FINCEN Advisory Issue No. 33, March 2003. 11 FINCEN Report to Congress in Accordance with Section 359 of Patriot Act, November 2002. 12 Transcript, House of Representatives Subcommittee on General Oversight and Investigations on Banking and Financial Services, Law Enforcement Efforts to Combat Money Laundering Through Black Market Peso Brokering, 22 October 1997 at 61-62 (Chairman Bachus: “And it is all illegal?” Agent James, IRS Criminal Investigations Division: “Not in our country, sir”). ILQ
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