A legal framework for combating trade-based money laundering in the African continental free trade area
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Date
2024
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University of the Western Cape
Abstract
African Union member states have commenced the process of establishing the African Continental Free Trade Area (AfCFTA), boosting intra-African trade through liberalisation and facilitation of trade widely seen as a crucial driver for economic growth, industrialisation and sustainable development. Despite the abundant opportunities the free trade area proposes to generate, as trade increases, it would engender the threat of trade-based money laundering, undermining the potential economic benefits.A number of commendable initiatives and instruments to deal with the commercial,criminal and corrupt elements of illicit financial flows (IFFs) have been embarked on; however,they are addressed in multiple and disconnected forums, which is a challenge to Africa. Currently,there is no single comprehensive global framework or architecture for tackling IFFs that utilises trade misinvoicing (TMI) and trade-based money laundering (TBML), the most frequently utilised mechanism facilitating measurable IFFs.This study proposes a harmonised legal regime under the auspices of the African Union and Regional Economic Communities as a pathway towards greater integration as envisaged.
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Keywords
African Continental Free Trade Area, African Union, Anti-Trade Based Money Laundering, Illicit Financial Flows, International Trade