Warehouse Receipt Fraud And Duplicate Financing

Warehouse receipt fraud and the practice of financing the same goods more than once remains a serious and recurring risk in commodity markets. The losses involved can be substantial and recovery prospects difficult. Cases arise in the metals, agricultural commodities and energy markets and the sums at stake are rarely modest, making them high profile. Recent English Court judgments have included Mercuria Energy Trading Pte Ltd v Citibank NA¹, ED&F Man Capital Markets Ltd v Come Harvest Holdings Ltd², Natixis SA v Marex Financial and Access World Logistics (Singapore) Pte Ltd³ and QuadraCommodities SA v XL Insurance Company SE⁴. 

Understanding how these frauds arise, what can be done to prevent them and how to respond when they occur is essential for banks, traders, warehouse operators and collateral managers.