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Thursday, February 29, 2024

ICE Has Limited Ability to Identify and Combat Trade-Based Money Laundering Schemes, OIG Says

The audit also determined that ICE does not retain the expertise needed to identify and combat TBML schemes, relying instead on temporary promotions and 18- month tours to fill staffing needs.

The Office of Inspector General (OIG) says U.S. Immigration and Customs Enforcement (ICE) has limited ability to identify and combat commodities imported as part of trade-based money laundering schemes. 

In trade-based money laundering (TBML) schemes, criminal organizations use illicit cash to buy goods, which are imported and sold in another country. The sale proceeds are returned to the criminal organization, which completes the laundering. Criminal organizations use these trade transactions to disguise their criminal proceeds and finance terrorism and other illicit activities.

In 2021, the value of goods exported throughout the world was approximately $22.3 trillion. The United States alone imported goods valued at $2.8 trillion in fiscal year 2021. This volume of trade provides criminal organizations ample opportunity to launder an estimated $1.6 trillion across the world every year.

OIG found that ICE does not have automated technology to identify import commodities at high risk for TBML schemes. Instead, it identifies TBML activities through manual searches of import records, which is time-consuming. OIG found that funding constraints and competing priorities have hampered ICE’s development of automated capabilities to identify TBML schemes.

OIG recommended that Homeland Security Investigations (HSI) within ICE develop and implement a work plan detailing prioritized upgrades to the Repository for Analytics in a Virtualized Environment, Data Analysis & Research for Trade Transparency System, estimated funding requirements for those upgrades, and timelines for implementing the upgrades. OIG added that the upgrades should include processes to achieve program objectives and respond to program risks such as capabilities to facilitate identifying trade-based money laundering transactions.

The audit also determined that ICE does not retain the expertise needed to identify and combat TBML schemes, relying instead on temporary promotions and 18- month tours to fill staffing needs. OIG said ICE has not allocated enough funding to hire the additional full-time permanent staff HSI’s Trade Transparency Unit (TTU) needs to achieve its mission. At the time of OIG’s audit, the TTU had only one full-time section chief and three full-time criminal research specialists. TTU officials estimate it would require a minimum of five program managers and two or three criminal research specialists to perform the basic duties of the TTU. However, the basic duties do not include generation of TBML-related leads, increased outreach, and training with other government agencies and outside entities. It is reasonable to suggest that having more full-time staff to identify TBML activities and support investigations would increase the number of arrests and seizures resulting from the investigations.

Consequently, OIG has recommended that HSI conduct an analysis of the Trade Transparency Unit workforce to determine the number of full-time staff needed to accomplish the unit’s mission and convey those requirements to the Office of the Chief Financial Officer for future funding consideration.

ICE agreed with both recommendations and aims to complete work to meet the first by April 2025 and the second by April 2024. Despite the limitations it faces, ICE reported making 444 criminal arrests and seizing more than $356 million associated with TBML investigations from fiscal years 2019 through 2021. However, until ICE addresses technology and staffing limitations, OIG is concerned that TBML-related imports will continue to go undetected, thus allowing transnational criminal organizations to finance activities, threatening U.S. national security.

Read the full report at OIG

Kylie Bielby
Kylie Bielby
Kylie Bielby has more than 20 years' experience in reporting and editing a wide range of security topics, covering geopolitical and policy analysis to international and country-specific trends and events. Before joining GTSC's Homeland Security Today staff, she was an editor and contributor for Jane's, and a columnist and managing editor for security and counter-terror publications.

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