Price Checking Goods: Overrated & Underwhelming

For years, compliance specialists within banks have been skeptical that the price checking of traded goods is an effective measure to counter money laundering and illicit trade. Consensus thinking is that price checking involves a great deal of work for little or no return. Put another way, the juice isn’t worth the squeeze.

While there is no doubt that goods are being over-priced and under-priced, the sense among some industry experts is that criminals are using much more devious techniques than, for instance, charging 50 dollars for a standard pencil. They are adding miscellaneous charges, giving random deductions, or, in some cases, distorting freight bills.

Freight charges have had wild swings since the beginning of the pandemic. For example, typically the cost for moving one container from China to the US was USD 1,200 prior to the pandemic. In September 2021, the fee shot up to USD 20,000 because most containers were stuck elsewhere and China had very few to ship out.

These days, container availability has straightened out and the cost has returned to the USD 1,000-1,500 range. Conventional price checking strategies are not set up for any of this and so would not catch when freight costs are inflated.