This study investigates the prevalence and mechanisms of trade-based money laundering (TBML) in Ghana's automobile sector, highlighting its implications for the economy and regulatory frameworks. It aims to develop data collection tools, assess the magnitude of TBML, identify typologies used by illicit actors, and propose actionable recommendations to enhance anti-money laundering (AML) efforts. It employs value chain and political economy analyses to uncover the factors contributing to the sector's vulnerability to TBML and assess its impact on the economy, financial systems, and legitimate businesses. It also used mirror trade statistics and price filter methods to identify instances of trade mispricing, suggesting that these anomalies warrant further investigation. The findings indicate that, while there is no direct evidence of intentional money laundering by traders, the sector's vulnerabilities, such as high demand for used vehicles, low compliance with AML regulations, and inadequate financing, create an environment conducive to TBML. Criminals exploit technological advancements, including virtual banking and decentralised finance, to facilitate their activities. This study identifies several categories of individuals involved in TBML, including uninformed traders, opportunistic actors, and politically exposed persons leveraging trade systems for illicit gains, and underscores the need for a comprehensive approach to combat TBML in Ghana. Key recommendations include enhancing awareness and compliance among non-financial operators, empowering customs authorities with advanced risk assessment tools, and fostering inter-agency collaboration. Furthermore, leveraging artificial intelligence for transaction monitoring can significantly improve the detection of suspicious activities, emphasising that Ghana's position as a transit point for illicit goods necessitates urgent policy intervention. By implementing robust regulatory frameworks and fostering a transparent trading environment, Ghana can mitigate TBML risk, protect its financial integrity, and promote sustainable economic growth. This study provides a foundational analysis that can inform policymakers and stakeholders in their efforts to effectively combat TBML in the automobile sector.
