Daigou Network: Key Takeaways
Daigou is a Chinese term that means “buying on behalf of”. Diagou Networks are informal groups of individuals who shop for usually luxury or in-demand items abroad on behalf of clients in China and then ship those items back to China for resale. Daigou Networks are often not institutionalised, which can encourage them to conceal the movement of money, avoid taxes, or facilitate Money Laundering.
Criminals follow Daigou Networks as they are informal and cross-border, making it difficult to trace transactions. They typically engage money mules, like students or temporary workers, to receive and structure small payments without detection thresholds.
Payments are often exchanged via e-commerce platforms, social apps, or Informal Value Transfer Systems (IVTS), avoiding regulated financial institutions and channels.
Example: Offenders disperse cash into separate deposits into many bank accounts, followed by using money out of those bank accounts to purchase high-end items, subsequently exporting them with falsified documentation to conceal the funding’s unlawful source.
The indicators below may indicate possible links to Daigou Network activities:
The following are the best practices for monitoring and mitigating Daigou-linked Money Laundering:
RapidAML anti-money laundering software helps to reduce the risk of Daigou-associated Money Laundering activity with integrated customer screening capabilities, real-time transaction monitoring software, automated compliance workflows, and customisable risk assessment modules so that Daigou Networks-related financial crimes can be significantly controlled, investigated, and mitigated.
Daigou operations are not always illegal. They become illegal when they involve tax evasion, smuggling, under-declaring goods, or processing illicit funds, using underground banking and transfer channels.
Criminals use Daigou Networks because the informal cross-border transaction methods allow them to conceal illicit proceeds and also not utilise a regulated manner of financing.
Compliance teams would consider the frequency of customer transactions, payment patterns, occupation of customers, and analyse whether the purchases of luxury goods align with customer profiles.
