What are common financial crime risks for APAC shipping firms and how to mitigate them

The Asia-Pacific (APAC) region plays a central role in global trade. Home to nine of the world’s ten busiest container ports, the region’s freight and logistics market is expected to reach almost $3.9 trillion by 2031. Alongside that growth, however, shipping firms operating in APAC can expect increased exposure to financial crime risk.

The shipping sector’s cross-border operations, complex supply chains, and high transaction volumes and values make it vulnerable to a range of financial crime threats, including money laundering, terrorist financing, and sanctions evasion. Given these challenges, firms need effective anti-money laundering and countering the financing of terrorism (AML/CFT) measures in place to protect themselves and meet their regulatory obligations.

What are common financial crime risks affecting the shipping industry?

Trade-based money laundering (TBML)

Criminals have become increasingly sophisticated at using the complex mechanisms of international trade to launder money. Trade-based money laundering (TBML) involves manipulating the contents of shipments and invoices to move illicit funds through the global trade system and disguise them as the proceeds of a legitimate business.

TBML works by artificially transferring or retaining value from shipments, from forging trade documents to misclassifying commodities. Common examples include:

• Over-shipment, or sending more goods than stated in shipping documents, to transfer value to the importer.
• Under-shipment, or sending fewer goods than stated, allows the exporter to retain the extra value.
• Over-invoicing occurs when the exporter receives more money than the actual value of the shipment.
• Under-invoicing, so the importer receives goods worth more than what they have paid.
• Submitting multiple invoices for the same shipment.

Because it spans multiple jurisdictions and involves several parties, TBML can be difficult to trace, making it a significant risk for shipping firms. According to the Financial Action Task Force (FATF), TBML red flags include:

• Complicated or opaque corporate structures, including the use of shell companies.
• Companies registered at addresses that are apparently used for mass registration.
• Vague descriptions of commodities on invoices and contracts.
• Prices that do not align with typical market values.

The threat continues to grow: in our State of Financial Crime 2026 survey, 38% of compliance leaders said they expect TBML to surge over the next year – just behind high-end laundering through property and assets (41%).

Sanctions evasion 

Governments impose sanctions on countries, businesses, or individuals to punish violations of international law. Because sanctions often restrict the movement of goods across borders, firms operating in the maritime sector need to pay them particular attention: deliberate or accidental violations can result in severe civil and criminal penalties.

Sanctions particularly relevant to the shipping industry include:

• Import and export embargoes: These ban buying or selling specific goods from or to a designated entity. Arms embargoes, which prevent the trade of weapons or dual-use goods, are a common type of trade restriction.
• Transport sanctions: These restrict the movement, registration, or ownership of specific vessels, including ships and aircraft. They are often imposed on vessels or operators carrying goods on behalf of sanctioned entities. So-called dark or shadow fleets have become a significant issue in relation to Russian sanctions evasion. The UK sanctioned 27 ships in a single package in June, 2026 – bringing the total number of shadow fleet and Russian LNG vessels it has designated to more than 600 – while the EU’s 20th sanctions package, adopted April 23, 2026, extended port and service bans to 632 vessels.

To avoid facilitating sanctions breaches, APAC shipping businesses need to stay up to date with the latest sanctions lists, including Singapore’s Targeted Financial Sanctions, Australia’s Consolidated List, and Japan’s economic sanctions list.

The complexity of the sanctions regime poses particular problems for the shipping sector:

• Evolving sanctions lists: Many jurisdictions update their sanctions lists frequently, so firms need constantly refreshed sanctions data to avoid trading with designated entities.
• Establishing beneficial ownership: Obtaining information on a vessel’s ultimate beneficial ownership (UBO) can be difficult. A vessel operates under the flag of its country of registration but may be operated by a firm located elsewhere and owned by an entity in yet another jurisdiction – especially where corporate structures are exploited to disguise ownership.
• Convoluted supply chains: Moving goods through multiple handlers and locations gives criminals opportunities to manipulate shipping information or exploit regulatory differences between countries. It also means firms need to understand exactly who they are doing business with to avoid exposure.

Third-party risks 

In practice, shipping companies rely on several parties to complete trades and transactions. This means they risk interacting with businesses or vessels acting on behalf of sanctioned entities or criminal groups seeking to launder money – and it complicates compliance by requiring firms to screen a wide range of individuals and entities, including suppliers, traders, distribution centers, vessel captains, insurance companies, and crewing companies.

Third parties also expose firms to the shipping fraud typologies that occur across the industry: criminals posing as official personnel to collect goods, misdirecting goods in transit, or double brokering (when a carrier collects payment for moving a shipment but subcontracts the job to a third-party carrier at a profit). The scale is growing: cargo theft losses reached $725 million in 2025 in North America alone – a 60% rise on 2024 – driven largely by deception tactics such as carrier impersonation and fictitious pickups rather than physical theft. Globally, in 2025, 22% of incidents involved insider cooperation. Shipping fraud disrupts supply chains and leaves businesses out of pocket for lost or stolen goods.

The State of Financial Crime 2026

Read our sixth annual state-of-the-industry report, built around a global survey of 600 senior financial crime decision-makers.

Download the report

How can shipping firms mitigate financial crime risk?

These risks can seem daunting, especially given the time, resources, and staffing they imply – and many firms have work to do. Our State of Financial Crime 2026 survey found that while 63% of firms have dedicated systems for monitoring dual-use goods, the misuse of HS/IMO codes, and TBML, the remaining 37% either lack full integration or are not monitoring these trade evasion vectors at all. 

With appropriately trained staff and specialist compliance software, firms can adapt as risks evolve without compromising their operations. Best practices include:

• Conduct due diligence on all customers and suppliers: Firms need strong know your customer (KYC) and know your business (KYB) processes: gathering and verifying key identifying information about an entity, including its beneficial owner(s). This information feeds a risk assessment of every business relationship, with compliance procedures calibrated to those risks and the firm’s risk appetite.
• Tailor compliance strategies to local regulations: The sector’s cross-border nature calls for flexible compliance rather than a one-size-fits-all approach. Firms benefit from applying different rulesets across their AML/CFT screening and monitoring – avoiding both the dangers of non-compliance and the inefficiencies of over-compliance.
• Enhance screening with automation: Due diligence works best with a combination of screening tools – not only for sanctions, but also for adverse media and politically exposed person (PEP) status. Together they build a fuller view of an entity’s risk; adverse media stories, for example, can surface risks not yet reflected in official sources. Screening software that uses artificial intelligence (AI) to scan for updates automatically can reduce compliance costs and risk exposure.
• Continue to monitor business relationships: Ongoing monitoring of partners, vendors, and customers keeps firms alert to changes in risk levels. As with screening, this works best continuously through automated systems rather than periodically with manual checks.

What are integrated AML/CFT solutions for shipping firms?

Facing risks that run from sanctions exposure to shipping fraud, APAC shipping companies benefit from specialized compliance software capable of carrying out essential due diligence checks.

Singapore-based firm Hafnia began using ComplyAdvantage’s screening software after searching for a solution that matched the needs of its large global operation. Since then, the software’s insights and ease of use have strengthened its screening capabilities.

“We previously had trouble getting people across the shipping industry to comply and ensure transparency, especially when it came to obtaining UBO data. […] But with ComplyAdvantage, the simplicity of the search functionality has made it easy to onboard people and explain the necessity of client references and ongoing monitoring.” 

Sinclair Coghill, Manager, Compliance and Executive Projects, Hafnia 

ComplyAdvantage Mesh Customer Screening combines a cutting-edge risk screening solution with market-leading proprietary data so you can: 

• Get updates in real-time: ComplyAdvantage’s data is sourced straight from regulators and refreshed using automated systems, so you receive updates well ahead of competitors. 
• Detailed risk intelligence: Access more than just names on sanctions lists with sanctions-related data that shows entities related to or controlled by sanctioned individuals and businesses. Go beyond the minimum expected by regulators and ensure compliance with true, in-depth insights. 
• Process case decisions efficiently: Customer profiles are integrated and viewable on a single screen, allowing analysts to swiftly access all the information they need to make informed decisions.