Webinar on “Frauds in trade finance: recent cases and toolbox for preventing intentionally deceptive actions”

Designed to provide the perpetrator with an unlawful gain or to deny a right to a victim, frauds are intentionally deceptive actions that can have devastating impacts on businesses.

In the wake of the COVID-19 crisis and the economic disruption caused by the pandemic, high-profile cases of frauds in trade finance with significant financial harm have brought to the spotlight intentionally deceptive actions to the trade and finance community[1].

Against this background and bearing in mind the importance of risk mitigation strategies for trade finance transactions, and particularly factoring and receivables finance, the webinar held on 7 December 2021 offered a platform for experience sharing in addressing this challenge.

The webinar benefited from the expertise of FCI, the global representative body for factoring and financing of open account domestic and international trade receivables, in addition to the insight from Mr Robert PARSON, Partner at Squire Patton Boggs (UK) LLP.

Mr Parson is the author of the following article: Receivables Finance – Fraud Risk and How to Deal with it Effectively.

The detailed report is contained in the Yearbook for 2021.

[1] Loss figures in recent trade finance scandals: USD 3.5 billion with the oil trading company Hin Leong, USD 650 million for the trader Agritrade, USD 470 million for the oil trader Hontop Energy, and USD 450 million for agricultural products trader Phoenix Commodities. Sources: Reuters, Bloomberg. Source: Receivables Finance – Fraud Risk and How to Deal with it Effectively.

AGEFI (https://agefi.com/actualites/marches/focus-commodities-fraudes-lemoigne-en): “While 2020 will be remembered, obviously marked by the health crisis, it will also leave the world of commodity trading with a bitter taste. Indeed, the cases of fraud revealed have very concrete consequences that could have a lasting impact on the future of this essential link in world trade..”