From Suspicion to Conservation: Leveraging Financial Insights to Fight Illegal Wildlife Trade
“The illegal wildlife trade is big business, [...] and it's growing. It's fueled by corruption at all levels and it's driving many species of animals, such as elephants and rhinos, and plants, such as rosewood trees, closer and closer to extinction.” Dr. Dame Jane Goodall.?
The Rising Tide of the Financial Fight Against Illegal Wildlife Trade
Environmental crime is a broad category of activities that violate environmental laws and pose substantial harm or risk to the environment and human health (Europol, n.d.). Each country criminalizes different activities as environmental crime; as a consequence, there is no uniform definition of environmental crime. Conceptually, this category encompasses forestry, illegal mining, mineral trafficking, and illegal trafficking or dumping of hazardous materials, chemicals and waste, #wildlifecrime, and in some countries even fishing crimes.
?Among all the types of offences against the environment, defining wildlife crime is particularly challenging. The UNODC (2020, p. 29) refers to it as ‘harvesting and trade contrary to national law, particularly, but not exclusively, the national laws implemented in fulfilment of CITES obligations’ (emphasis in the original). The Convention on International Trade in Endangered Species of Wild Fauna and Flora ( CITES ) is the international instrument designed to ensure that the international trade of wildlife and plant specimens does not endanger the survival of the species.
The illegal wildlife trade (IWT) has adverse economic, social, and environmental consequences, besides hampering conservation initiatives. Many protected species, considered high-value, are therefore targeted by organized crime groups. In this sense, IWT should be regarded as a serious crime and given priority in law enforcement efforts alongside other serious crimes.
The IWT gained increased attention in the anti-money laundering and counter-terrorist financing (AML/CFT) field in 2020 and 2021 when, in the Financial Action Task Force (FATF) , the Chinese presidency included the laundering of proceeds of IWT in its priorities and, the German presidency prioritized environmental crime more broadly. Both presidencies highlighted the implications of IWT and environmental crime for global security and biodiversity. Despite this heightened focus, the momentum to address wildlife crime seems to have declined on the global agenda.
However, multiple initiatives have started producing outstanding results and demonstrate that sustained commitment, effective partnerships, and active public involvement are crucial for combating this complex issue. This article explores these efforts, aiming to identify and discuss best practices that have emerged from successful interventions, providing valuable lessons for international stakeholders.
My Journey with Financial Investigations in Wildlife Crime
In 2018, UNODC and the Egmont Group of Financial Intelligence Units initiated a project on financial investigations into IWT and forestry crime. As part of the Egmont Centre of FIU Excellence and Leadership (ECOFEL), I worked on this project for the next three years. Despite IWT not being on most financial intelligence units' (FIUs) radar, my team and I designed and conducted several workshops, researched, and published the first report for FIUs (ECOFEL, 2021). By 2021, many FIUs knew something about IWT.
Since then, I have continued to support countries conducting risk assessments focused on environmental crime and IWT.
The Efforts of Compliance Professionals
Professionals dedicated to combating financial crime are increasingly aligning their efforts with the fight against IWT. On February 23, 2024, I was invited to participate in a webinar organized by ACAMS (Caso Cerrado: Cómo Usar los Reportes de Actividades Sospechosas (ROSs)), where I had the great pleasure of sharing the floor with Amanda Cabrejo le Roux ( Basel Institute on Governance ), Renata Cao de la Fuente ( WWF México ), and Gilberto Flores (HSBC).
I discussed how IWT is linked to money laundering in megadiverse countries like Mexico, Colombia, and Brazil, particularly focusing on the unique challenges of Latin America due to its biological diversity. I also examined changes in how countries are addressing the issue, the most urgent challenges in addressing IWT and its financial aspects, and the lessons learned. The webinar demonstrated that compliance professionals are keenly interested in and collaborative in the fight against IWT.
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The Power of Public-Private Partnerships in Fighting IWT
A month later, on March 23, 2024, I attended the 2024 Fighting Crime with Big Data & Artificial Intelligence Conference, organized by the Institute for Management & Innovation (IMI) UTM as part of the BIGDataAIHUB Seminar Series (https://www.utm.utoronto.ca/bigdataaihub/events/imi-bigdataaihub-seminar-series). This event discussed artificial intelligence and developing machine learning and data analysis solutions that can help combat the illegal wildlife trade.
This event revealed that more FIUs are actively working to combat IWT, using their tools and creating partnerships with the private sector. It was amazing to learn more about Project Anton, a public-private partnership initiative led by Scotiabank and supported by FINTRAC Canada | CANAFE Canada , The Royal Foundation’s United for Wildlife, and other key domestic and international partners to combat illegal wildlife trade.
February and March events highlighted how AML/CFT tools can be successfully used to combat IWT.
Closer Look at Recent Trends and Their Implications
As part of assessing the impact of international frameworks and collaborations on the IWT, it is essential to look at real-world data and enforcement outcomes. An interesting observation comes from reviewing the GAFILAT (Financial Action Task Force of Latin America) typology compendium. Between 2019 and 2020, there were 12 recorded cases related to environmental crime (GAFILAT, 2022). However, in the subsequent period of 2021-2022, the number notably decreases to only two cases (GAFILAT, 2024).
This data might suggest various underlying dynamics. For instance, it could reflect a shift in enforcement focus, changes in reporting mechanisms, or perhaps fluctuations in IWT and environmental crime activities. It’s important to consider that such variations could also stem from the increased attention and prioritization by bodies such as the FATF and the Egmont Group, which might notably influence how countries address and report on these issues.
Navigating Challenges: Lessons Learned
Many things have changed since 2018, among them, today there is no doubt about that IWT is a predicate offence of ML; in fact, the FATF includes it as an example of environmental crime as designated category offence. 世界银行 has a stand-alone module to assess the risks of this crime; and financial intelligence units have kept working on this issue quietly but restlessly. FIUs have signed memoranda of understanding with environmental authorities to formalise the exchange of information (Gibraltar FIU, n.d.); also have published strategic analysis on IWT; and even, included the issue in their national risk assessment.
While IWT may seem to be receiving less attention globally, FIUs are still working on the issue with excellent results. FINTRAC-CANAFE published an operational alert as a result of Project Anton. It was considered Canada’s position in the supply chain as an importer, exporter and transit of financial funds, their findings are remarkable (FINTRAC-CANAFE, 2023). They obtained a series of ML indicators on general wildlife trade, imports and exports. On the other hand, the Financial Intelligence Unit of Trinidad and Tobago identified the top ten of traded species in volume and value, legal breaches, and penalties (Trinidad and Tobago FIU, 2023).
Although IWT does not receive the same attention as in previous years, there are efforts that demonstrate that collaboration and partnerships are key in using the AML/CFT toolkit to combat it. Much work still needs to be done, but there are people working on it.
Join the Conversation
What do you think is the biggest challenge in applying AML tools to #endIWT and #followthemoney?
#Stopmoneylaundering #financialintelligence #fromsuspiciontoconservation #riskassessment #strategicanalysis
References and Further Reading
CEO y Socio Fundador en Governance, Ethics & Compliance Advisors
8 个月Mileidy, in response to your final question, I think the biggest challenge, is the vision of FIU′s and the enviromental authorithies, wich in general, don′t coordinate actions to combat the enviromental crimes. Rewards, Héctor
Environmental management and biodiversity conservation are my passion and expertise
9 个月Excelente artículo Mileidy!!!
Jefe División Supervisión Conducta de Mercado en Comisión para el Mercado Financiero (CMF)
9 个月Felicitaciones Mileidy!!! Cari?os
Consultoría Independiente
10 个月Amazing article, very interesting approach!!! Worth reading. ?? Especially for us in Latin America!