Sanctions Evasion Reference

Incoterms

Standard trade terms published by the International Chamber of Commerce that allocate cost, risk and responsibility for delivery between buyer and seller.

reviewed

2026-08-20

Incoterms decide who arranges carriage and insurance and where risk passes. They matter for detection because they determine which party controls the shipment at each stage, and therefore who chose the route, the vessel and the insurer.

A term that gives the buyer control of carriage from an early point, in a transaction where the buyer has no logistics capability, is a structural oddity worth explaining.

Where this term is used

  • What is a phantom shipment? — A phantom shipment is a trade transaction that is documented, financed and paid in full when no goods, or far fewer goods, were ever shipped. The payment is the entire purpose.
  • What is third-country transshipment? — Routing restricted goods through an intermediate country so that the shipment reaching the restricted destination appears to originate somewhere the exporter would have supplied without question.
  • What is trade misinvoicing? — Trade misinvoicing is misstating the price, quantity or description of goods on trade documents, so that value moves across a border in a direction and an amount the paperwork does not admit.

Related terms

  • Bill of lading — A document issued by a carrier acknowledging receipt of cargo, stating its terms of carriage, and in negotiable form serving as a document of title to the goods.
  • Freight forwarder — An intermediary that arranges carriage on behalf of shippers, books space, prepares documentation and may consolidate cargo from several customers.

Sources

  1. Trade-Based Money Laundering: Risk Indicators. Financial Action Task Force and Egmont Group, 2021.

All glossary terms