Latin American criminal gangs are increasingly looking to transnational criminal organisations in China to launder money according to an associate professor of Economics at the State University of New York.

Sara Hsu, who is specialist in the Chinese financial system, says that trade-based financial crime is routinely used to launder drug proceeds for cartels in Mexico and Colombia.

Strengthening links

Hsu says links between Latin America and China are strengthening, partly due to increasingly close relations between Mexican drug cartels and Chinese mafias.

She also says that some Chinese gangs are encouraging Latin American criminals to launder money through China and participate in other illegal activities.

Fake commerce

Some of the most common money laundering techniques according to Hsu are the purchase of Chinese products and fake commercial exchanges through casinos in Macau and Chinese money exchange houses.

Hsu’s findings chime with the US Drug Enforcement Administration (DEA). In its 2017 National Drug Threat Assessment it said that recent information indicates that Asian-American organised crime groups are increasingly involved in illicit bulk cash pickups in the United States.

Streamlining TBML

It is likely much of this bulk cash is collected as part of larger trade-based money laundering (TBML) schemes involving the export of Chinese trade goods to Latin America the DEA says.

It says the closer involvement of these Asian-connected money laundering organisations may represent a streamlining of the money laundering cycle through TBML.

This may also suggest that traditional Latin American money laundering organisations that previously acted as middlemen, are being cut out of the cycle the DEA concludes.