Cargo and Goods in Transit Fraud
Domain 3 focuses on cargo claims where documents, physical evidence, and commercial incentives diverge. The exam tests bills of lading, Incoterms, valuation, survey evidence, container integrity, and the difference between genuine loss and fabricated or exaggerated claims.
Core rules
- A bill of lading is a receipt, evidence of the contract of carriage, and, when negotiable, a document of title. A clean bill states goods were received in apparent good order; a claused bill records damage or shortages.
- Incoterms allocate risk, cost, and insurance duties. A CIF buyer may claim under a cargo policy while an FOB buyer may bear transit risk differently; misstating the trade term can reveal a fabricated interest.
- Phantom shipments, non-existent cargo, round-tripping, and overvaluation are common fraud patterns. Verify vessel manifests, container numbers, terminal gate records, and supplier invoices.
- Pre-shipment damage may be presented as transit damage. Compare pre-loading survey reports, loading photographs, and discharge surveys.
- Container seal numbers, CCTV, and terminal records test whether theft or damage could have occurred as alleged.
- General average and salvage contributions can create incentives to inflate cargo values; declared values should be checked against market and purchase records.
Worked example
A claim seeks $900,000 for water-damaged electronics in 12 containers. The bills are clean, but the container numbers do not appear on the vessel manifest, the invoice unit price is above market, and the survey shows corrosion only on older units. The combination suggests documentary fabrication or pre-existing damage. Investigators should obtain carrier loading records, terminal CCTV, customs entries, and supplier confirmation before accepting the loss.
Traps
Do not treat a bill of lading as conclusive proof of shipment or condition. Do not ignore Incoterms, general average, or the possibility that only part of the claim is exaggerated.