As global trade volumes continue to grow and supply chains increase in complexity, Customs administrations are confronting threats and risks that extend well beyond traditional revenue, safety, and compliance concerns. Among these is the threat of trade-based illicit financial flows (TB-IFFs) which are linked to activities such as trade‑based money laundering (TBML), sanctions evasion, and financing of both proliferation of weapons of mass destruction (WMD) and terrorism.

Under TB-IFF schemes, legitimate trade frameworks are manipulated through methods like false invoicing, misdescription of goods, manipulation of quantities or values, and the misuse of trade documentation. However, their purpose differs from conventional Customs fraud. Rather than targeting duty evasion alone, TB-IFF schemes are designed to move, store, or disguise illicit value within legitimate trade flows.

These flows cut across multiple sectors and mandates, impacting public agencies and private sector actors. Customs, tax administrations, police services, financial intelligence units, financial supervisors, banks, and participants in the trade sector may each observe fragments of activity, yet no single authority or sector sees the full picture. TB-IFF schemes exploit vulnerabilities in both the financial and trade systems, requiring coordinated public- and private-sector responses.

Customs authorities occupy a critical, unparalleled position at the intersection of goods, documentation, and trade data. Unlike financial or law-enforcement bodies that may see threat actors or transactions in isolation, Customs can assess how value moves in practice – through shipments, routes, counterparties, and commercial relationships – and whether activity aligns with legitimate economic behaviour.

Critically, TB-IFF schemes do not exploit commodities alone. It preys on legitimate trade chains: producers, intermediaries, logistics providers, financiers, and commercial practices that enable lawful trade. Understanding how goods are normally produced, priced, financed, transported, distributed, and paid for is therefore essential to identifying when trade behaviour deviates from economic reality.

Targeting TB-IFFs requires shifting from a focus on individual commodities to examining entire trade chains. In recognition of the central role of Customs in combatting TB-IFFs, the Canada Border Services Agency (CBSA) established what would become the Border Financial Crime Centre (BFCC) in 2020 to determine the prevalence of TBML in Canada, and to develop appropriate responses to enforce these threats. While institutionally Canadian, the BFCC model reflects a broader, international shift toward assessing TB-IFFs through a goods and tradechaincentred perspective, integrating Customs and financial expertise, intelligence analysis, and enforcement authorities.

Years of experience have taught the CBSA that commodities alone rarely expose TBML. Illicit finance is more often revealed through anomalies in trade chains – counterparties inconsistent with sector norms, use of shell and front import/export companies with opaque or complex ownership structures, pricing or margins and payment processes lacking commercial logic, circular routing, or activity misaligned with a firm’s declared business function. To be effective, Customs administrations must understand both what is traded and how value legitimately flows through a sector.

In 2025, the Government of Canada established a Trade Transparency Unit (TTU) within the BFCC. The TTU proactively identifies leads based on anomalous trade behaviour by applying advanced analytics methods to data to identify suspicious transactions and patterns of trade.  Canada’s TTU approach shares similarities with the United States method for trade transparency. However, the Canadian model aims to identify suspicious transactions from its own data holdings first, and using suspicious transactions as the basis of seeking corresponding trade transaction information from foreign customs partners. BFCC intelligence analysts develop leads referred by the TTU, along with those received from frontline border services officers, trade compliance specialists, as well as other foreign and domestic regulatory, intelligence and law enforcement partners, the trade sector, and the public. Analysts overlay Customs data with trade-chain information, financial transaction reporting and other open and proprietary data sources and validate their suspicions through examinations conducted by front‑line border officers.

Detection alone is not sufficient. In recognition of the threat posed by TB-IFFs, Canada introduced legislation to apply anti-money laundering controls at the border to all goods being imported and exported to and from Canada, as defined in the Canadian Customs tariff. These changes are supported by a dedicated Regulatory Investigations Unit (RIU) within the BFCC which applies goods forfeitures or monetary penalties to enforce non-compliant import and export anti-money laundering reporting requirements.

The Canadian BFCC model demonstrates a core truth: trade-based illicit financial flows cannot be countered by any one authority or type of enforcement alone.

By following the goods, understanding legitimate trade chains, and collaborating closely with financial, regulatory, and law‑enforcement partners, Customs administrations can play a decisive role in safeguarding international trade and the financial systems.