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Our courses are intended for a global audience, with each one being completely customisable to suit the needs of the individuals it is being delivered to.

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  • Banking and Financial Markets, Corporate Finance, Derivatives, Financial Crime, Retail Banking, Risk and Credit, Trade Finance
  • Duration: Two days
  • Information

    A 2/3 day course focused on the AML and sanctions compliance risks in trade and commodity finance. This course will enable bank auditors and compliance officers to identify compliance risk zones in each of these product areas and key aspects from an audit perspective. The course uses a range of typologies and case studies to develop the understanding of delegates in a practical and engaging way across a range of scenarios.

    Training methodology:

    Each core product; will be described in terms of its use, operation and the parties involved through presentational slides, diagrams and examples. Key compliance risk zones of each (money laundering, counter terrorist financing and international sanctions breach) will be highlighted

    Typologies; the above will be supplemented with a typology/example of money laundering or terrorist financing activity in trade & commodity finance, with analysis of the key features, the attractiveness of the product or structure for criminal activity, and related summary of warning signs or red flags

    Case studies; these will provide an opportunity for the delegates to consider transactions and identify the key risk compliance features, areas of due diligence and enhanced due diligence, further information required to make a risk based assessment, and the reasons for suspicion of criminal activity and/or sanctions breach

    Each delegate will receive a workbook containing the presentational slides and supporting material

    Course Instructor:

    The course instructor has over 40 years of experience in international trade finance. He worked for 35 years in banking during which time he was Regional Head of International Trade Finance at RBS for several years. He continues today as an independent trade finance practitioner, consultant and trainer thus ensuring the materials and case studies are directly relevant to today’s corporate banking environment


    How this course will assist the delegates

    By attending this training course the delegates will understand the role, parties, mechanics and operation of:

    • Trade finance; letters of credit, collections, standby LCs, receivables finance and forfaiting
    • Structured commodity finance; pre-export finance, warehouse finance and tolling
    • Identify the compliance risk zones in each of the above areas from a sanction/embargo, AML and CFT perspective
    • Gain an appreciation of the red flag suspicious activity indicators and warning signals


    Day 1

    Why cross border transactions are a target for abuse

    • The importance and vulnerability of the correspondent banking relationship

    Typology; the use by a shell bank of its correspondent banking network to move criminally obtained money across jurisdictions to purchase high value tradable goods

    International payments versus documentary trade in the compliance environment:

    • Automated screening
    • Message stripping
    • Manual based due diligence

    Typology; the use of a group cross border cash concentration arrangement to mask the illicit origination of funds from a subsidiary participant and the recirculation of illicit monies in a disguised manner for apparent trade purposes

    The cost of non-compliance

    Case study examples

    Trade finance

    Introduction to trade finance; description, function and operation:

    • Conflicting requirements of sellers and buyers
    • Why trade finance carries high compliance risk
    • High risk customers; transactions; jurisdictions

    Trade finance compliance risk characteristics;

    • Key compliance risk zones
    • Trade cycle appreciation – “know your customer’s customer”
    • The different roles of banks; fragmented bank involvement
    • Banks deal in documents – no responsibility to validate
    • Negotiable instruments; implications for compliance risk
    • The role of finance in cross border abuse

    Trade based money laundering (TBML)

    • Common methods of TBML

    Typology; the co-mingling of legitimate cross border trade wired receipts with terrorist financing funds by a diaspora owned business

    Trade finance; vulnerability to sanctions violation

    • Sanctions risk identification


    Letters of credit

    Description and operation

    Example transaction and trade documentation

    • Payment conditionality
    • The independence principle
    • Trade documentation; compliance risk
    • Sanctions clausing
    • Differing roles of banks; the importance of LC availability
    • Payment terms
    • LC confirmation; financial engagement and responsibility
    • Mechanisms for financing letters of credit
    • Compliance risk assessment; issuance, presentation of documents, payment

    - Issuing bank
    - Advising bank

    • Product compliance risk profile

    Case study; the assessment of a potential money laundering cross border letter of credit transaction requiring delegates to identify key compliance risk issues and further information required to make a risk based assessment

    Transferable letters of credit

    • Description and operation
    • Parties
    • Transfer changes
    • Product compliance risk profile

    Case study; the assessment of a transferable letter of credit transaction with suspicion of breaching international trade sanctions. The delegates will be required to identify any unusual features, to identify key compliance risk issues and further information required to make a risk based assessment

    Synthetic letters of credit

    • Description and operation
    • Parties
    • Product compliance risk profile

    Case study; delegates will examine a case study transaction and identify the compliance risk aspects

    Documentary collections

    • Description and operation
    • Parties
    • Types; DP, DA
    • Example transaction and trade documentation
    • Compliance risk assessment;

    - Remitting bank due diligence
    - Collecting bank due diligence

    • Product compliance risk profile

    Typologies; examples of misrepresentation of invoice value, multiple invoicing and false description of goods as a means to attempt to legitimise the movement of illicit monies via trade flows

    Day 2

    Case study; delegates will consider a request to issue a letter of credit which is not in the ordinary course of business of the applicant and to identify the nature of the underlying transaction


    • Description and operation
    • Parties
    • Primary and secondary purchase
    • Debt instrument authenticity
    • The importance of due diligence; underlying trade transaction?
    • Product compliance risk profile

    Case study; purchase of an avalised bill of exchange. Delegates will be required to undertake due diligence and identify further information required to undertake a compliance risk based assessment of the transaction

    Standby letters of credit

    • Description and operation
    • Parties
    • Example transaction
    • Claim documentation
    • Its use in money laundering
    • Product compliance risk profile

    Case study; delegates will be required to consider the course of action resulting from a suspicious claim under a standby LC and how the use of this product for money laundering can be reduced


    • Introduction to commodity finance; description, function and operation
    • Key compliance risk zones (in addition to those listed under trade finance)

    - Emerging markets/high risk jurisdictions
    - Value and existence of goods
    - Syndicated facilities (due diligence on other lenders/participants)

    Commodity traders

    • Compliance risk profile

    Pre-export finance

    • Description and operation
    • Parties
    • Purpose of borrowing
    • Sources of supply; due diligence
    • Product compliance risk profile

    Typology; the use of commodity based pre-payments to disguise the movement of laundered funds

    Warehouse financing

    • Description and operation
    • Parties
    • Warehouse receipts
    • The role of collateral managers
    • Product compliance risk profile


    • Description and operation
    • Parties
    • Changed nature of product

    Product compliance risk profile
    Case study; delegates will be required to construct a trade cycle timeline and determine how they can validate, control and manage the transaction through each stage of the cycle from a compliance risk perspective

    Register interest

    As every course we run is tailored to meet the specific needs of each client, we can only provide an estimate after fully understanding your specific requirements. Please complete the form below of call +44 (0) 208 894 4977 to discuss how Taylor Associates can help you.

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