Estimation and Analysis of Trade-Based Money Laundering Using Mirror Trade Data: The Case of South Africa

Living in a globalised economy, opportunities arise for cross-border trade. As cross-border trading activities increase, they give rise to trade-based money laundering (TBML). Despite trade growth, TBML continues to be prevalent and not widely recognised compared to other traditional forms of money laundering. Estimation of money laundered globally remains problematic. Therefore, this study estimated and analysed TBML by applying mirror trade data for South Africa (SA) trading with Africa and the European Union (EU). To assist historical quantitative quarterly time series, mirror trade data were gathered covering the period of 2011 to 2025. The findings reveal that the magnitude of SA’s TBML to Africa was highly volatile, while the magnitude of SA’s TBML to the European Union indicated that SA uses EU trade channels for receiving illicit flows into the country. Comparatively, analyses of the structural patterns and trends of SA’s TBML with Africa versus that with the EU over the study period revealed large structural differences, which is a characteristic feature of the two regional economic trading blocs. In conclusion, TBML for SA–Africa was mainly carried out through import over-invoicing, while TBML for SA–EU was carried out through export over-invoicing. The findings contribute to filling the knowledge and practice gaps associated with TBML estimation.