Transfer Price-Based Money Laundering: A Transit Trader's Perspective

Money laundering (ML) flies on the wing of transfer pricing to wherever international trade spreads. Previous import price (PIP) and external comparable but uncontrolled price (ECUP) are both used to determine whether a transit trader overinvoices or underinvoices his/her transit business. Capital flight, income tax evasion, and import duty evasion are estimated to identify their contribution to global ML under Transit Trader's pricing paradigms of inflated/deflated import followed by inflated/deflated export. ML activities are recognized even when Transit Trader's account booking indicates a facial loss.