What Are the Key Money Laundering Red Flags in Africa and Asia?

Trade mispricing and hidden invoicing remain among the hardest money laundering schemes to detect — the red flags sit in the container stacks and shipping records, not in cash deposits.

Every compliance officer is taught to “look out for red flags.” But in practice, that advice can feel vague. What exactly should a bank teller in Nairobi or a compliance analyst in Jakarta be looking for?

The Financial Action Task Force (FATF) publishes global typologies of suspicious behavior, ranging from unusual transaction patterns to politically exposed persons (PEPs). Yet in Africa and Asia, these risks don’t appear in the abstract — they show up in very human stories of unexplained wealth, cross-border scams, and sanctioned entities hiding in plain sight.

And the stakes are high: FATF and the UN estimate that 2–5% of global GDP is laundered each year — between US$ 800 billion and US$ 2 trillion. In regions where financial institutions are still building compliance capacity, catching red flags isn’t a nice-to-have — it’s a survival requirement.

Unexplained wealth and lifestyle red flags

In 2018, the UK used its first Unexplained Wealth Order against Zamira Hajiyeva, the wife of a jailed Azeri banker. The headline detail was unforgettable: over £16 million spent at Harrods — including £150,000 in a single day at Cartier — with no clear source of legitimate income.

This was a London case, but the pattern is familiar in Asia and Africa. Malaysian regulators continue to unravel the 1MDB scandal, where at least US$ 7 billion was misappropriated through shell companies and complex layering. In 2024, Swiss courts convicted two executives for embezzling and laundering a further US$ 1.8 billion linked to 1MDB.

Red flag: customers whose lifestyle or asset accumulation far outpaces their known income — whether it’s a civil servant with luxury real estate in Nairobi or sudden overseas property purchases by a modest trader in Jakarta.

Crypto adoption in Africa and Asia is real — but so are the risks. From Dubai boardrooms to neighbourhood cafés, the same red flags appear when funds move fast and stories don’t add up.

Crypto and digital asset red flags

Nigeria is one of the world’s top ten crypto adopters, with Chainalysis estimating US$ 56 billion in crypto transactions between July 2022 and June 2023 (Chainalysis). But that growth has come with risks. The Central Bank of Nigeria has investigated exchanges accused of enabling scams and unlicensed transfers.

In Kenya, regulators have warned about “investment clubs” masquerading as crypto ventures, luring retail investors into Ponzi-style schemes. These funds often move rapidly between wallets, vanish into mixers, and re-emerge through exchanges with limited oversight.

Red flag: customers routing funds through multiple wallets or exchanges with no business rationale, or exchanges disproportionately used by high-risk customer groups.

Trade and remittance red flags

Trade-based money laundering (TBML) remains one of the hardest risks to detect. The World Trade Organization and Global Financial Integrity estimate that hundreds of billions of dollars in trade mispricing flow through under- and over-invoicing every year (GFI).

In Southeast Asia, customs authorities continue to find gaps between declared values of goods and actual payments. In West Africa, remittances are often structured just below reporting thresholds — a layering technique that turns informal corridors into laundering pipelines.

Red flag: invoice discrepancies, circular trade routes, and repeated small transfers that don’t fit the economic profile of the sender.

Sanctions evasion is designed to look ordinary. Ships move billions through the shadows of global trade

Sanctions-related red flags

Since Russia’s 2022 invasion of Ukraine, sanctioned oligarchs and companies have scrambled to move assets. Investigations have shown funds routed through shell companies in Dubai, and in some cases through African mining projects or Asian intermediaries.

Africa has its own sanctions exposure: In Nigeria, the Economic and Financial Crimes Commission (EFCC) flagged companies tied to sanctioned individuals winning procurement contracts. In late 2023, the EFCC also charged former CBN governor Godwin Emefiele with awarding ₦1.2 billion (≈ US$ 1.3 million) in contracts without due process (EFCC).

Red flag: indirect payments to vendors or counterparties with sanctioned links. Screening customers alone isn’t enough. Even indirect links can trigger enforcement and reputational damage.

PEP red flags

PEPs are a perennial risk category. In many African and Asian markets, business and politics are deeply intertwined. It is not uncommon for family members of senior officials to be beneficial owners of companies bidding for contracts or moving funds abroad.

FATF highlights that PEP-related laundering often relies on associates and family members rather than the official themselves. In practice, this means a reluctance to provide source-of-wealth details, complex ownership structures, or sudden high-value transfers involving state-linked projects should all ring alarm bells.

A Chatham House survey in Nigeria found that nearly 70% of respondents believed procurement fraud was common, and over half saw judicial bribery as routine. In practice, this means institutions must be alert not just to the official, but to their network.

Red flag: reluctance to provide source-of-wealth details, opaque ownership structures, or sudden transfers involving state-linked projects.

Money laundering rarely announces itself. It hides in plain sight, flashing briefly before disappearing into the shadows.

Context is everything

The FATF’s red flag lists are global, but laundering risks are always local. A $10,000 deposit may be ordinary in Singapore but extraordinary in Sierra Leone. A cluster of round-number invoices may signal nothing in one market but point to kickbacks in another.

For smaller institutions, the real skill is not memorizing every FATF typology, but understanding which red flags matter most in their context. That requires a balance: don’t ignore global typologies, but always calibrate them to your customer base, your market norms, and your regulatory environment.

Going further: An A–Z of red flags

This blog has touched on just a handful of categories. In reality, there are dozens more — from real estate red flags to suspicious NGO flows, shell company tricks, and trade finance anomalies.

To support compliance teams, Anqa has compiled a free A–Z of Red Flags, bringing together FATF guidance, regional case studies, and practical examples. It’s designed as a working reference — not a theoretical list — so smaller institutions can build training, monitoring rules, and due diligence processes around the red flags that actually matter.