More than $2 trillion in trade finance transactions move through global networks every year. Behind those flows lies a labyrinth of banks, exporters, freight operators, customs agents, insurers, and brokers—each holding a fragment of the truth about who is paying whom, for what, and from where. In this maze, visibility is currency. When ownership trails vanish across jurisdictions or when a single fraudulent document passes undetected, the financial and reputational cost can be immense.
Recent reviews by the International Chamber of Commerce and the Financial Action Task Force show that trade-based money-laundering and documentation fraud still represent one of the largest sources of compliance exposure for banks. Despite growing digitalisation, 40 percent of institutions admit losing visibility once goods leave the exporter’s control. In short, the global system that underpins most of world commerce still operates with partial eyesight.
For financial institutions, importers, and insurers, that opacity translates directly into risk: undetected sanctioned entities, duplicate invoices, forged bills of lading, and beneficial-ownership chains designed to disguise control. The result is an ecosystem in which trust depends less on transparency than on momentum.
The Challenge: Hidden Risks in the Trade-Finance Chain
Trade finance was built on paper. Letters of credit, packing lists, inspection certificates, and airway bills still pass through multiple hands before a shipment is cleared. Each intermediary—forwarder, agent, or correspondent bank—introduces an additional layer of dependency. In theory, every participant performs due diligence on the next; in practice, most rely on the same incomplete registry data or unverified declarations.
This fragmentation allows bad actors to thrive. A single shell exporter can issue counterfeit invoices to move illicit funds across borders. A sanctioned shareholder concealed two layers deep within a holding company can escape detection. A logistics intermediary with an unverified address can disappear once goods are released. According to FATF’s 2024 Trade-Based Money-Laundering Report, mis-declared ownership accounts for nearly 70 percent of enforcement cases globally.
Banks attempting to mitigate these risks face an operational paradox. Traditional due-diligence procedures depend on information that counterparties rarely disclose in full. Manual verification is slow and expensive; digital solutions, if not integrated, merely reproduce the same silos electronically. The outcome is a system that demands speed but punishes it with uncertainty.
The Insight: Visibility Through KYB and Data Integration
Restoring trust to trade finance begins with one principle—know who stands behind every document. This is where Know Your Business (KYB) and Ultimate Beneficial Owner (UBO) verification have shifted from regulatory box-ticking to strategic necessity.
KYB enables banks and corporates to validate legal existence, registration status, and management structure across jurisdictions. UBO analysis reveals the natural persons who ultimately control a company, often buried behind nominee directors or offshore entities. When combined, these checks expose the true counterparties to a transaction, closing one of the largest loopholes in trade-based money-laundering.
The evolution of technology has made this process both faster and more precise. Real-time data feeds and API-based onboarding tools now allow institutions to screen counterparties automatically against sanctions lists, adverse-media databases, and politically exposed-person registries. Instead of relying on static snapshots at onboarding, compliance teams can maintain continuous monitoring, receiving alerts the moment a director change or sanctions update occurs.
Yet the real transformation comes from integration. When registry data, shipping documentation, and payment information are unified into a single workflow, the invisible becomes visible. A bank can trace the full journey—from exporter to consignee to carrier to insurer—seeing not only the entities involved but also their interconnections. Patterns that once took months to uncover now surface instantly: duplicate shipments, over-invoicing, or links to high-risk jurisdictions.
Cedar Rose has been instrumental in helping institutions achieve this visibility. Its trade-finance data intelligence platform aggregates verified corporate records, UBO hierarchies, and AML screening results into a single, API-driven environment. For banks balancing speed with scrutiny, such automation turns compliance from a bottleneck into a competitive strength.
The Vision: Transparent Trade Ecosystems
The next era of trade finance will not be defined by faster transactions alone but by transparent ecosystems—networks where every participant can trust the provenance of data. Regulators across the GCC and Africa are already demanding greater end-to-end visibility, aligning with global standards on beneficial-ownership disclosure and continuous monitoring.
In this future, information flows will mirror the movement of goods: seamless, verifiable, and traceable. Exporters will share verified credentials directly through digital KYB gateways; banks will access real-time risk profiles via integrated APIs; insurers will underwrite policies with complete visibility of ownership and compliance status.
For institutions that act early, the benefits extend beyond compliance. Visibility enhances efficiency. Automated verification reduces onboarding times, prevents duplication, and allows capital to
circulate faster. The same systems that prevent financial crime also unlock liquidity and trust—the twin currencies of trade.
Cedar Rose’s role in this transformation is clear. By providing accurate, verified company data across more than 200 jurisdictions, the firm offers the foundation on which transparent trade ecosystems can operate. Its integrated verification tools enable banks, insurers, and logistics providers to replace assumptions with evidence, building a culture of accountability that strengthens every link of the chain.
Real-World Illustration
Consider a multinational commodities trader sourcing raw materials from multiple suppliers across North Africa and the Levant. Each counterparty provides invoices and certificates of origin through local agents. Previously, verifying these entities required weeks of manual checks and correspondence with registries in several languages.
By embedding an API connection to Cedar Rose’s database, the trader’s bank now verifies every supplier automatically—confirming registration, directors, and ownership hierarchy within seconds. When one supplier’s parent company appears on a newly updated EU sanctions list, the system triggers an instant alert, preventing payment release and averting regulatory exposure.
In the past, such a red flag might have surfaced only during a post-transaction audit—long after funds and goods had moved. Now, visibility happens in real time, turning risk management from reaction to prevention.
From Compliance to Confidence
Trade finance thrives on trust, and trust begins with visibility. As cross-border transactions grow more complex, institutions that integrate KYB, UBO verification, and continuous monitoring will be those best positioned to expand safely.
Cedar Rose helps financial institutions and corporates achieve that visibility—combining verified company data, AML screening, and real-time alerts into one unified workflow. It is how compliance evolves from a regulatory obligation into a catalyst for growth.
Sources:
- FATF — Trade-Based Money Laundering overview, https://www.fatf-gafi.org/en/publications/Methodsandtrends/Trade-basedmoneylaundering.html fatf-gafi.org
- FATF — Money Laundering National Risk Assessment Guidance (2024), https://www.fatf-gafi.org/content/dam/fatf-gafi/reports/Money-Laundering-National-Risk-Assessment-Guidance-2024.pdf.coredownload.inline.pdf fatf-gafi.org
- FATF — The FATF Recommendations, https://www.fatf-gafi.org/en/publications/Fatfrecommendations/Fatf-recommendations.html fatf-gafi.org
- ICC — Trade Register hub, https://iccwbo.org/news-publications/policies-reports/icc-trade-register-report/ ICC - International Chamber of Commerce
- ICC — Trade Register 2023 Summary Report (latest public PDF), https://iccwbo.org/wp-content/uploads/sites/3/2023/11/ICC_Trade_Register_Report_2023_Summary_vF-1.pdf ICC - International Chamber of Commerce
- World Bank — Global Supply Chain Stress Index (2025), https://www.worldbank.org/en/data/interactive/2025/04/08/global-supply-chain-stress-index worldbank.org
- WTO — World Trade Report 2024, https://www.wto.org/english/res_e/booksp_e/wtr24_e/wtr24_e.pdf wto.org+1
- OECD and WTO — Aid for Trade at a Glance 2024, https://www.oecd.org/en/publications/aid-for-trade-at-a-glance-2024_7a4e356a-en.html OECD
- IMF — AML and CFT policy resources, https://www.imf.org/en/Topics/Financial-Integrity/amlcft IMF
- BIS Basel Committee — Sound management of risks related to money laundering and terrorist financing (banking guidance), https://www.bis.org/bcbs/publ/d353.pdf Bank for International Settlements
- Thomson Reuters Institute — 2024 Global Trade Report, https://www.thomsonreuters.com/en-us/posts/wp-content/uploads/sites/20/2024/10/Global-Trade-Report-2024.pdf Thomson Reuters
- Atradius — B2B Payment Practices Barometer, United Arab Emirates 2024, https://atradiuscollections.com/us/knowledge-and-research/reports/b2b-payment-practices-barometer-united-arab-emirates-2024 Atradius
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Question & Answer
Check our FAQs for quick answers to frequently asked questions we receive.If you have other questions write.
Why is visibility so difficult in trade finance?
Because transactions involve multiple intermediaries and jurisdictions, each with its own documentation standards and disclosure rules. Data often remain siloed, incomplete, or paper-based.
How does KYB differ from KYC?
KYC verifies individuals; KYB verifies companies and their ownership. In trade finance, both are essential because corporate entities conduct most cross-border transactions.
What is UBO verification?
UBO confirmation identifies the real people behind a company—those owning or controlling 25 percent or more of shares or voting rights—helping to expose hidden risk.
How does automation reduce fraud?
Automated data integration eliminates manual gaps. When systems cross-check registry, sanctions, and trade data in real time, false documentation and duplicate invoicing are far easier to detect.
Is data integration only for large institutions?
No. APIs and modular platforms allow regional banks, insurers, and logistics firms to connect at scale or selectively, according to need and budget.
What is the future trend?
Convergence. Trade finance, compliance, and supply-chain management will operate on shared data ecosystems, making transparency intrinsic rather than optional.
