Effects of trade misinvoicing on money laundering in developing economies

Abstract

Purpose

This study aims to define the concepts and determine the extent to which trade misinvoicing influences money laundering activities in developing countries.

Design/methodology/approach

A qualitative research methodology was adopted using a descriptive synthesis of secondary data due to the heterogeneous nature of data sources (empirical evidence and content analysis).

Findings

Analysis revealed that in recent times trade misinvoicing accounts for over 20% of international trade value between developing and developed countries, and trade misinvoicing has been identified as a trade-based money laundering mechanism.

Research limitations/implications

Unavailability of homogenous data relating to trade misinvoicing among developing countries, different methods for measuring trade misinvoicing and inadequate high-quality research papers that led to the use of reports from reputable organisations.

Originality/value

To the best of the author’s knowledge, this study is among the few research works to assess the effects of trade misinvoicing and how it influences money laundering activities in developing countries.

Citation

Umar, B. (2023), "Effects of trade misinvoicing on money laundering in developing economies", Journal of Money Laundering Control, Vol. 26 No. 1, pp. 60-68. https://doi.org/10.1108/JMLC-11-2021-0124