Stormy Seas Ahead? Here’s How UK SMEs Can Stay Safe from Trade-Based Money Laundering

 Photo by Radission US on Unsplash

Conversation with Denisse Rudich, Chief Compliance Officer at sherloc

Let’s face it: 

International trade is a goldmine of opportunity—but it’s also riddled with risk.  For UK SMEs trying to grow, expand, and stay competitive, global trade offers scale and possibility. But lurking in the shadows? A rising tide of trade-based money laundering (TBML), fraud, and cybercrime. 

And unfortunately, SMEs are often on the frontlines—without the tools, time, or backup to spot the red flags. That’s got to change. 

Wait… What is TBML? 

It’s when criminals hide dirty money behind the smokescreen of legit international trade.  Fake invoices. Overpriced goods. Shell companies.  The goal? Wash illicit funds and make them look squeaky clean. 

Global trade hit $33 trillion in 2024. That’s a lot of noise to hide in.  And while banks and big corporates have compliance teams and tech, SMEs are being left exposed. 

Why Are SMEs More Vulnerable? 

Let’s break it down: 

Blocked from trade finance  50% of SME applications get rejected by banks. That often forces small businesses to look elsewhere—sometimes in riskier or less-regulated corners of the market. 

Too much paper, not enough tech  There are 4 billion paper documents in circulation across global trade at any one time. That’s a playground for fraudsters. 

Mind-boggling complexity  A single trade deal can involve 20+ entities, 10+ documents, and thousands of data points. It’s overwhelming even for the pros. 

Resource-strapped  Most SMEs don’t have an in-house compliance team, sanctions expert, or legal eagle. That makes it harder to catch risks hiding in the supply chain. 

Regulations Are Getting Tighter (And SMEs Are on the Hook) 

Here’s the kicker:  Even though rules like the Modern Slavery Act are supposed to apply to big companies (those earning £36M+), SMEs aren’t off the radar. 

In 2024, a UK court ruled that even companies without direct knowledge of forced labour could face asset seizures—if they should’ve known. 

That’s a big shift. And it means SMEs need to start thinking like the big players. Now. 

The Tricks Criminals Use (So You Know What to Watch For) 

Here are some of the classic TBML tactics: 

• Over- or under-invoicing: Prices way off what they should be 

• Phantom shipments: Goods that never actually move 

• Mislabelled goods: Declaring electronics as textiles, or vice versa 

• Complex ownership chains: Shell companies, PO boxes, fake identities 

All of it designed to confuse, mislead, and wash dirty money clean. 

What SMEs Actually Need 

Forget the whitepapers. Let’s talk about what would actually help busy SME founders and finance leads: 

Digital trade docs – Less paper, more protection  

Standardised data – So info matches across partners  

Better access to trade finance – Without jumping through flaming hoops  

Real-time alerts and supply chain insights – Know what’s coming before it hits 

How sherloc Has Your Back 

Let’s be real: you didn’t start your business to become a sanctions expert or compliance guru. 

That’s why we built sherloc. 

We give you the same risk insight firepower as the big guys—without the cost, complexity, or jargon. 

Monitor global trends (tariffs, shipping costs, FX shifts, commodities)  

Track your internal metrics (cash flow, burn rate, forecast stress tests)  

Spot red flags early (supply chain risks, policy shifts, regulatory changes)  

Run simulations to protect your margins—and your business 

sherloc gives you the tools to move from reactive to proactive, turning risk into strategy. 

You Belong in the Global Game 

We believe UK SMEs deserve to thrive—not just survive.  And that means giving you the knowledge, tools, and clarity to navigate global trade with confidence. 

Because in today’s world, every trade deal could hide a threat. But with sherloc by your side, you’re not sailing blind. 

Let’s Talk 

Not sure if your business might be at risk?  Want help understanding how TBML might affect your operations?  Let’s have a real conversation. 

Because the only thing scarier than a hidden threat… is not knowing it’s there. 

Marie-Charlotte Rouzier, Head of Research, Strategy and Ecosystem Engagement at sherloc

Denisse Rudich, Chief Compliance Officer at sherloc