Transfer Pricing-Based Money Laundering in Barter Trade

Abstract

Barter trade attracts money launderers by its flexible contract, payment term of reciprocal letters of credit, and convenient capital flight and tax evasion. As far as fair value and invoiced value of the transacted goods are concerned, transfer price-based money laundering in barter trade is done by the means of deflated import-inflated export, inflated import-deflated export, deflated import-deflated export, and inflated import-inflated export, where the money laundered can be measured by capital flight, income tax evasion, import duty evasion, and VAT refund evasion in each case. So we should reinforce transaction supervision, promote intelligence exchange, perfect relative regulations, and improve anti-money laundering awareness and capabilities.