IMB uncovers fraudulent steel trades in North Africa

IMB Director Captain Pottengal Mukundan commented: “False bills of lading or those that have been tampered with are a threat to the legitimate trade in steel cargoes.”

The latest case analyzed by IMB concerned a shipment of over 1,000 tonnes of various types of scrap metal destined for the Indian sub-continent. IMB found that that the bills of lading contained numerous discrepancies, including incorrect container numbers, and concluded that the bills of lading were false.

An additional risk factor identified by IMB was the presence of an intermediary in the deal. In this most recent case and others like it, a middle-man had allegedly purchased cargo that he was attempting to sell to prospective buyers. Frequently, the intermediary is located far away from the country of origin of the goods, adding to the difficulty for the intermediary to verify the existence of the goods. Sometimes, the intermediaries are victims themselves.

“The operators of these scams are improving their methods and are using increasingly sophisticated techniques,” noted Captain Mukundan.

False bills of lading relating to vessels that actually docked at the listed load ports are presented for payment. A simple check of the ports visited by the vessel will not reveal the scam.

Fraudsters are also taking their con online. In a number of recent instances, IMB found that fraudulent sellers set up counterfeit websites under the names of genuine cargo carriers in an attempt to add credibility to their illegal activities and to persuade buyers that their shipments had been handled.

“It is vital that banks and traders exercise due diligence and be aware of the latest fraud efforts. Failing to do so could result in significant financial losses. Fraudsters tend to use banks where due diligence procedures are not robust,” warned Captain Mukundan.