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Leveraging AI to manage financial risk in trade operations

The intricate nature of global maritime trade creates ample opportunities for exploitation by bad actors who seek to perpetrate financial crimes such as fraud and trade-based money laundering (TBML). The United Nations Office on Drugs and Crime estimates that the amount of money laundered globally per year is between USD 800 billion to USD 2 trillion. When it comes to maritime-related financial risks, financial institutions tend to think primarily in terms of sanctions compliance.

Considering the fact that the majority of the world’s traded goods are carried onboard vessels at some stage of the transaction, we can assume volumes are high. As maritime trade inevitably grows, financial institutions must move towards an all-encompassing risk approach and harness advanced maritime intelligence as part of their trade finance processes. By adopting this approach, institutions can better understand and evaluate risk exposure, beyond sanctions compliance.

The latest OFAC and OFSI advisories called on financial institutions to understand the risks involved with maritime trade and the need for regulatory systems. Deceptive shipping practices can be used to facilitate illicit trade. Currently, the use of maritime data is limited to supporting monitoring tasks related to commodity trade finance. And that is an additional source for investigations.

Financial institutions must pursue solutions that can effectively lower false positives without disrupting day-to-day business operations. The most effective solution for holistic maritime risk analysis lies in savvy AI implementation. Financial institutions are expected to comb through vast amounts of data to detect red flags. Implementing maritime AI into trade screening solutions can provide more visibility into each deal. This is key to supporting safe exit management and preventing onboarding new business with exposure to maritime risk.

Opening accounts is a holistic approach to maritime AI will help banks fight financial crime and enable more business opportunities. Different lines of business can enhance maritime due diligence without needing to develop further expertise. Currently, 90% of globally traded goods are transported via maritime shipping. This is with maritime trade volumes and are expected to triple by 2050.

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Euro zone ministers expect inflation to slow in 2022

The acceleration of euro zone inflation, driven energy prices, is mostly temporary. Then the price growth will slow down again. The euro zone finance ministers agreed that, that too the next year as forecasted by the European Central Bank and the European Commission.

Paschal Donohoe, chaired the talks of the ministers in Luxembourg. In a news conference he said that there was also agreement that the inflation spike was not an argument against the transition to renewable sources of energy. This is under the EU’s ambitious plan of reducing CO2 emissions to zero by the year 2050.

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Under new rules, borrowing for investment sensible

British finance minister Rishi Sunak said that the government borrowing to fund investment was a sensible thing. This is to allow under new fiscal rules that he is likely to announce, unlike borrowing for day-to-day spending. He said that borrowing for capital investment that is going to drive up their growth is probably a sensible thing for them. And that too particularly in an environment of slightly lower interest rate. Sunak stated this in an event on the sidelines of the annual conference of Britain’s ruling Conservative Party. This event was organized by the Taxpayers’ Alliance advocacy group. Sunak stated in that event, that borrowing for more day-to-day spending is probably less something that you would want to have as part of your framework.

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IMF board to interview Georgieva-sources

The International Monetary Fund’s executive board is going to interview Managing Director Kristalina Georgieva. This is regarding that; its reviews claims that she pressured World Bank staff to alter data to favor China in her previous role. Board members were initially expected to meet with Georgieva. But spent their time working on other regular business matters.

The board members spent hours for questioning lawyers from the WilmerHale firm. This is about their World Bank investigation report which alleged that Georgieva, as the bank‘s CEO applied undue pressure on staff, to alter data in the flagship “Doing Business” report to benefit China. Then, an IMF spokesperson said that the IMF board remains committed to a thorough, objective, and timely review of the matter. Georgieva has strongly denied the accusations.

The upcoming interviews could prove pivotal in either increasing support for Georgieva. This is with many IMF shareholders are keen to wrap up the board’s deliberations on the matter. The fund’s most influential member governments, including the top shareholder the United States, have withheld public judgment. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020. The law firm’s report contends Georgieva. The former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so that the China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.

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