Tariffs, trade and financial crime: What banks must do now in World Economy News 23/02/2026 Seismic shifts are underway in global trade. Economies are redrawing global supply chains. Tariffs are springing up, and sometimes falling, at a pace not seen before. The rules of global trade are in constant flux – and that creates opportunity for criminals. Estimates suggest that 2-5% of global GDP, as much as $5.5 trillion annually, is laundered worldwide. A significant share of this flows through trade, which remains one of the most exploited channels for money laundering and the illicit movement of funds. Criminals are moving a worrying amount of money across borders in plain sight. The chaos from geopolitical disputes only blurs the line between lawful commerce and illicit activity further. And that growing instability has made financial crime harder to detect but easier to disguise. The real question, therefore, is whether today’s systems can adapt as quickly as the threats themselves. The new frontline of financial crime Sudden shifts in tariffs and sanctions create volatility in trade flows, forcing banks to adjust risk models on the fly while leaving exploitable gaps. The European Central Bank has even warned that such shocks ripple through supply chains and financial systems, where criminals are quick to seize on the instability. Ports, shipping companies and customs authorities are crucial infrastructure, yet their processes are built for logistics and revenue collection, not financial crime detection. From falsified invoices to vessels rerouting from declared routes or “going dark” entirely, much of this activity takes place in plain sight. Recent industry warnings highlight how rising cargo theft and global freight fraud are only exacerbating these risks. And the burden of policing this complexity then falls squarely on banks, financial institutions and payment service providers. When tariffs rise or sanctions are imposed, new loopholes open up across these networks. Tariffs, in particular, can fuel trade-based financial crime by encouraging over- and under-invoicing, rerouting shipments through less regulated markets and creating inconsistencies in trade documentation. Alongside this, financial crime is evolving in ways traditional controls were never designed to catch. Criminals are using AI and other emerging technologies to circumvent the broader chaos of the ecosystem, whether that’s analysing sanctions enforcement for exploitable gaps or generating and using shell companies as the proverbial “getaway car” for criminals to obscure the ultimate beneficiary. Banks often only see the payment, not the goods or routes behind it, leaving them one step behind once more. While criminals innovate, compliance teams are being stretched to breaking point. Across Europe, 75% of compliance decision-makers report that regulatory demands on their teams have increased significantly in the past year, and the pace of change shows no signs of slowing. Yet when institutions are still conducting manual reviews and duplicating work across siloed systems, it comes as little surprise that $750 billion in illicit funds slipped through Europe in 2024. Decades of “patch and upgrade” approaches have left institutions with fragmented infrastructures, which has led to overworked teams and investigations moving more slowly than the crime itself. The reality is that banks are being asked to monitor a chaotic, interconnected web of global trade with tools built