Follow the money – welcome move to target money laundering in illegal wildlife trade

LONDON: The Environmental Investigation Agency (EIA) welcomes a decision today to prioritise action to crack down on money laundering linked to the illegal wildlife trade.

The agreement was reached by the intergovernmental Financial Action Task Force (FATF) meeting in Paris to endorse a proposal by the Chinese Government during its year-long presidency of the international standard-setter in anti-money laundering actions.

At the meeting’s close, a summary of outcomes by the Task Force stated: “The FATF will work to develop good practices in tackling the financial flows linked to illegal wildlife trade. This project will analyse common supply chains and payment methods, as well as case studies from countries that have experience in investigating the financial flows from illegal wildlife trade. It will also consider the role of public-private partnerships and international cooperation in combating this crime. The project is slated to complete in June 2020.”

Despite wildlife crime generating annual profits of between $7 billion and $23 billion, making it one of the most lucrative forms of transnational organised crime, the enforcement response in many jurisdictions remains inadequate. Potentially powerful tools such as anti-money laundering measures are rarely deployed and for crime groups the illegal wildlife trade represents a high-profit/low-risk undertaking.

The FATF commitment is long overdue. A survey by the UN Office on Drugs and Crime (UNODC) of 45 jurisdictions found that while 86 per cent of them reported being affected by wildlife crime, just 26 per cent of countries had conducted financial investigations into wildlife crimes – and in only one per cent of cases were anti-money laundering laws used.

Julian Newman, EIA Campaigns Director, said: “Anti-money laundering measures represent a crucial but under-used tool in the fight against the organised crime groups driving endangered species towards oblivion for profit.

“EIA commends China, which is a major market for illegal wildlife products, for using its presidency of FATF to press for greater action against the illegal wildlife trade.”

An important aspect of the FATF regime are National Risk Assessments (NRA) which countries must carry out to identify the main types of crime within their territory where money laundering is a threat and then demonstrate what measures have been taken in response.

To date, few assessments have adequately addressed illegal wildlife trade, often due to the very low number of cases where financial investigations have been conducted. For example, Laos, which is an important transit and destination country for illegal wildlife, deems it to be a low risk for money laundering solely based on the lack of prosecutions in the country.

By listing illegal wildlife trade as a priority, FATF evaluations of National Risk Assessments should ensure the threat level is properly recognised and measures put in place to counter it.

Another key enforcement flaw is the dearth of financial investigations into illegal wildlife trade cases, representing missed opportunities to go after the criminal profits generated by wildlife traffickers and to identify the syndicate bosses who rarely come into physical contact with illegal wildlife products but who certainly touch the money.

One of the main FATF recommendations – which are used to gauge a country’s response to money laundering threats – calls for parallel financial investigations where crimes have been committed which generate major proceeds. From EIA’s experience of scrutinising major illegal wildlife trade cases in Africa and Asia, such financial investigations are extremely rare.

Newman added: “All too often when major seizures of contraband wildlife, such as ivory tusks, occur, the onus is on publicising the event rather than looking at the financial picture around it. Yet these consignments are worth millions of dollars and that money is not moving around as just cash but intersects with the global financial system.

“Failure to conduct financial investigations into these cases is a missed opportunity to significantly disrupt the criminal syndicates involved, which view seizures as a business expense.”

EIA has conducted detailed analysis of the financial flows associated with several major ivory smuggling cases. In one example from Tanzania, a network of Chinese nationals was implicated in two ivory seizures totalling 4.7 tonnes and valued at $5.9 million. The traffickers used a series of front companies to mask their activities, with both company and personal bank accounts used to move money between China and Tanzania. On a single day, half-a-million dollars in cash was paid into one of the accounts, yet no prosecution under anti-money laundering laws was undertaken.

CONTACTS FOR MEDIA

• Paul Newman, EIA Press & Communications Officer, via [email protected] or +44 (0) 20 7354 7960

EDITORS’ NOTES

1. The Environmental Investigation Agency (EIA) investigates and campaigns against environmental crime and abuses. Our undercover investigations expose transnational wildlife crime, with a focus on elephants, pangolins and tigers, and forest crimes such as illegal logging and deforestation for cash crops such as palm oil; we work to safeguard global marine ecosystems by tackling plastic pollution, exposing illegal fishing and seeking an end to all whaling; and we address the threat of global warming by campaigning to curtail powerful refrigerant greenhouse gases and exposing related criminal trade.

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