Sanctions Evasion Reference

Phantom shipment

A trade transaction documented and paid for in full where no goods, or substantially fewer goods, were ever shipped.

also known as

fictitious trade, ghost shipment

reviewed

2026-08-20

The phantom shipment is the limiting case of misinvoicing: rather than misstating the value of real cargo, the parties dispense with the cargo. Invoices, packing lists and bills of lading are produced, a bank settles against them, and the payment is the entire purpose.

It is caught by physical corroboration — port records, carrier confirmations, container tracking, vessel position histories — because the documents themselves will be internally consistent. The FATF and Egmont studies treat the inability of an applicant to evidence movement of the goods as a standalone indicator.

Where this term is used

  • How is correspondent banking used to evade sanctions? — Using a chain of banks that each know only their own customer, so that a payment for a restricted party reaches a currency it could not access directly, without any bank in the chain seeing the whole transaction.
  • 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 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.
  • Trade misinvoicing — Deliberately misstating the price, quantity or description of goods on trade documents so that the value recorded differs from the value actually exchanged.
  • Letter of credit — A bank undertaking to pay a seller against presentation of specified documents, substituting the bank's credit for the buyer's.

Sources

  1. Trade-Based Money Laundering: Trends and Developments. Financial Action Task Force and Egmont Group, 2020.
  2. Trade-Based Money Laundering: Risk Indicators. Financial Action Task Force and Egmont Group, 2021.

All glossary terms