Trade Finance Duplication: How to Prevent This Fraudulent Practice

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Trade finance duplication is a fraudulent practice where a fraudulent party creates a duplicate trade finance request in order to obtain funds for the same trade transaction from multiple financial institutions.

This practice has become a major concern for banks and other financial institutions, as it can result in significant financial losses.

Types of Trade Finance Duplication

There are two main types of trade finance duplication: duplicate invoices and duplicate bills of lading. In the case of duplicate invoices, the fraudster submits the same invoice to multiple financial institutions for financing.

Duplicate bills of lading, on the other hand, involve submitting more than one bill of lading to multiple financial institutions for financing.

Preventing Trade Finance Duplication

There are several measures that can be taken to prevent trade finance duplication:

1. Verify the authenticity of invoices and bills of lading: Financial institutions should verify the authenticity of invoices and bills of lading before approving any trade finance requests. This can be done by cross-checking the information on the invoice or bill of lading with…