ITFA warns AML rules could increase pressure on trade finance banks

The International Trade and Forfaiting Association (ITFA) has warned that evolving anti-money laundering (AML) requirements could place additional pressure on banks active in trade finance.

The concern centres on the growing complexity of compliance frameworks, which already represent a significant operational burden for institutions managing cross-border transactions and documentation-heavy trade flows.

While regulators are aiming to improve risk-based approaches to financial crime, industry participants warn that increasing compliance requirements could slow onboarding, raise costs and reduce appetite for certain transactions.

For trade finance, where margins can already be tight, the impact may be particularly acute in higher-risk jurisdictions and lower-value transactions, where compliance costs can outweigh returns.

The warning comes as banks continue to balance regulatory expectations with the need to maintain efficient access to trade finance, particularly for SMEs and emerging markets.

The development highlights ongoing tension between regulatory tightening and the need to maintain liquidity in global trade systems.