What does over-invoicing mean?

Over-invoicing: The exporter submits an inflated invoice to the importer, generating a payment that exceeds the value of the shipped goods. Greater value is transferred from the importer to the exporter.

What is under-invoicing and over-invoicing?

Underinvoicing. The act or practice of stating the price of a good on an invoice as being less than the price actually paid. Underinvoicing occurs if the importer and/or exporter wish to reduce a tariff or if a buyer and/or seller wish to reduce their apparent profits so as to pay less in taxes. See also: Fraud.

Is over-invoicing illegal?

Import over-invoicing is a common method of illegally moving money out of developing countries and results in illicit outflows of funds from a country, the report explained. Similarly, export under-invoicing can also be used for shifting money abroad. A key method of illicit inflows includes import under-invoicing.

What is under-invoicing in import?

Under-invoicing is a major source of customs duty leakage in imports in the absence of effective measures to curb or minimise this malpractice. Moreover, customs officials overrule the suspect under-invoiced and mis-declared entries in favour of the importer.

What is Ghost laundering?

The expanding trend of fraudulent transactions taking place through online retailers is known as ghost laundering. Ghost laundering is the multi-faceted process of leveraging true or passive merchants to appear to sell items which are counterfeit, valueless or entirely nonexistent.

How does under invoicing work?

In this method, the invoice is falsified to show that the price of goods being exported is lower than the actual price being paid by an importer abroad. Trade misinvoicing is also used to bring illicit funds into countries. A key method of illicit inflows includes import under-invoicing.

What is double invoicing?

What Is Double Invoicing? A simple sign of a duplicate invoice is getting more than one invoice for the same goods or services. Also, the company might see evidence that it made multiple payments on the same invoice, and yet the person who sent the invoice is demanding to be paid again.

How does under-invoicing work?

What is Phantom shipment?

In the wake of Trade Based Money Laundering, one term is being commonly used these days and is called Phantom Shipments -The shipments, which exist only on paper. Through the phantom shipments, the goods are moved out of the country and the foreign remittances are received by the exporters.

What do you mean by trade based money laundering?

Trade based money laundering and terrorist financing is a process of moving money made from criminal activities for the purpose of disguising its origins and integrating it back into the formal economy.

What is Ghost transaction?

A ghost payment is when they take only 1 payment but records show that another payment is ‘earmarked’ to come out again but never does. Don’t have enough to transfer (would have to be £150.00 + what else was needed.

How Uber ghost rides are linked to online money laundering?

Here’s how it works: the client employs a money laundering service to seek out and hire complicit Uber drivers looking to make an extra buck, who then accept ride requests from money laundering clients at pre-established rates. The operator takes a cut, and passes along the remaining, clean money to the client.

What does it mean to under invoice a product?

The act or practice of stating the price of a good on an invoice as being less than the price actually paid. Underinvoicing occurs if the importer and/or exporter wish to reduce a tariff or if a buyer and/or seller wish to reduce their apparent profits so as to pay less in taxes. See also: Fraud.

How is the over or under shipment of goods similar to invoicing?

The over or under shipment of goods is similar to over and under invoicing in that value is transferred to either the buyer or seller. However, rather than misrepresent the cost, the parties misrepresent the quantity.

How is over invoicing used in money laundering?

The key element of this technique is the misrepresentation of the price of the good or service in order to transfer additional value between the importer and exporter. Over-invoicing of exports is one of the most common trade-based money laundering techniques used to move money.

How does an exporter falsely invoice an item?

Quoting an example, the report says that an exporter may ship a relatively inexpensive good and falsely invoice it as a more expensive item or an entirely different item. This creates a discrepancy between what appears on the shipping and customs documents and what is actually shipped.