Contents
Illegal Wildlife Trade (IWT)
The illicit trade in wildlife is not only a grave threat to global biodiversity but also a significant financial crime challenge that often goes under the radar.
Understanding IWT as a Financial Crime
Illegal Wildlife Trade is a multi-billion-dollar criminal industry that fuels corruption, threatens endangered species, and destabilizes ecosystems. It operates through complex global networks, making the financial trail as clandestine as the trade itself. To dismantle these networks, it is imperative to understand IWT not just as an environmental issue but as a serious financial crime.
AML and CTF Frameworks: The Frontline Defense
Financial institutions are uniquely positioned to serve as the frontline defense against IWT. By integrating robust AML and CTF frameworks, these institutions can scrutinize and flag suspicious activities that may indicate wildlife trafficking. Our site offers detailed insights into how AML and CTF policies, when effectively applied, can intercept the financial proceeds from IWT.
SARs and STRs: Critical Tools in Reporting IWT
A crucial component of AML and CTF efforts is the filing of Suspicious Activity Reports (SARs) and Suspicious Transaction Reports (STRs). These reports are the primary tools for financial institutions to alert the Financial Intelligence Unit (FIU) about potential money laundering or terrorist financing activities linked to IWT. Our resources guide you through the process of identifying red flags, documenting suspicious behavior, and fulfilling reporting obligations with precision and due diligence.
Collaboration and Compliance: A Collective Effort
The fight against IWT requires a collective effort from regulators, financial bodies, law enforcement, and conservation experts. Compliance with AML and CTF regulations is not only a legal requirement but also a moral imperative to protect our natural heritage. We emphasize the importance of cross-sector collaboration and the exchange of intelligence to fortify our defenses against IWT.
Key Industries
The key industries and sectors you’ve listed are significantly impacted by or involved in various ways with wildlife crime, including illegal wildlife trade (IWT). Here’s an overview of their roles and challenges:
Hunting/Eco-tourism
Legitimate hunting and eco-tourism can be exploited for wildlife crime. Poachers might pose as tourists or hunters to gain access to protected areas. Conversely, responsible eco-tourism can play a role in conservation efforts.
Timber
Illegal logging and the associated timber trade are a significant part of environmental crime. Protected tree species are often illegally harvested and mixed with legal timber exports, contributing to habitat destruction and loss of biodiversity.
Transportation and Shipping
These sectors are crucial for the movement of illegally obtained wildlife and timber. Smugglers use legitimate shipping and transportation channels to move contraband, often using sophisticated methods to evade detection.
Financial
Financial institutions and intermediaries may unwittingly facilitate wildlife crime by processing transactions related to these illegal activities. Money laundering is a significant concern, as criminals seek to legitimize the proceeds from wildlife crime.
Traditional Medicine
Products from endangered species, such as rhinos, pangolins, and tigers, are often used in traditional medicines. This demand fuels poaching and illegal trade in wildlife parts.
Exotic Pet Trade
The illegal pet trade involves the smuggling of exotic and endangered animals. Demand for unique pets drives a black market where animals are often kept in poor conditions and transported illegally.
Trinkets and Jewellery
Wildlife products are used to make various trinkets and jewelry items, such as ivory carvings and tortoiseshell accessories. These items are frequently sold to tourists, often under the guise of being ethically sourced.
Taxidermy
This industry can be implicated when it involves the preservation of protected species without proper permits. Illegal taxidermy is a means to commercialize poached animals.
Zoos/Breeding Facilities
Some zoos and breeding facilities may engage in illegal activities, such as the unpermitted trade or breeding of endangered species. However, legitimate zoos and facilities often contribute to conservation efforts and public education.
Food/Restaurants
Certain wildlife species are considered delicacies in various cultures. Restaurants and markets selling dishes made from protected species contribute to the demand that drives illegal hunting and trade.
Fashion
The fashion industry utilizes wildlife products for high-end clothing and accessories. Leather from exotic animals, fur, and feathers are in demand, which can lead to the exploitation of wildlife.
Art and Décor
Wildlife products are used in art and home décor, such as rugs made from big cat skins or ornaments made from ivory. The illegal trade in such items contributes to the decline of endangered species.
Key Species
Americas
- Sea turtles
- Iguanas
- Parrots
- Totoaba
- Corals
West & Central Africa
- Elephant
- Pangolin
- Rosewood
- Crocodiles
- Panther
East & Southern Africa
- Elephant
- Turtles/tortoises
- Rhino
- Big Cats
- Shark
Europe
- Birds of Prey
- Whale
- Bears
- European eels
- Songbirds
Asia-Pacific
- Tigers
- Turtles
- Pangolins
- Orangutans
- Parrots
Indicators for Identifying Money Laundering from Illegal Wildlife Trade
Financial institutions are equipped with risk indicators to help spot suspicious activities possibly linked to the laundering of proceeds from the illegal wildlife trade (IWT). These indicators are founded on insights from investigative country reports, public data, and contributions from organizations like United for Wildlife Financial Taskforce and the Basel Institute.
These risk indicators serve as potential red flags in customer profiles, transactional patterns, and account activities, offering actionable intelligence. They should be used in a broader context, considering additional client and transaction details, to effectively pinpoint potential money laundering activities.
The following indicators are designed to enhance financial institutions‘ vigilance against IWT-related money laundering but require careful implementation to avoid overwhelming false positives.
Customers (Natural Persons and Legal Entities):
- Engagement of international trade entities, particularly those in high-risk IWT sectors such as raw wood, plastics, or frozen foods.
- Utilization of shipping components or agents commonly seen in IWT-related scenarios.
- Involvement of politically exposed persons (PEPs) and affluent individuals, especially those in environmental oversight roles or wildlife-related ventures.
- Operations by legitimate wildlife-linked businesses like private zoos or safari operators.
- Ownership ties to entities in notable IWT transit or destination countries.
Transactions
- Substantial cash transactions by officials in wildlife protection, customs, or revenue roles.
- Unusually large deposits, transfers, or withdrawals by individuals in forestry or wildlife management positions, suggesting wealth beyond explainable means.
- Questionable CITES certificates accompanying legal wildlife shipments.
- Transactions named after CITES-listed species ingredients in traditional medicine.
- Unconventional financial dealings between firms in IWT-prone regions.
- Altered shipping documents historically linked to wildlife crime.
- Inconsistencies in trade documentation or financial transactions that don’t align with the actual commodities traded.
- Transactions disguised as gold trades which may actually be for wildlife shipping.
- Circular transactions involving the same owner, particularly in cross-border trade.
- Payments linked to known traffickers or used to facilitate trafficking activities.
- Transactions involving pet suppliers and wildlife traffickers.
- Significant payment discrepancies to pet suppliers that don’t match the goods or services provided.
- Wire transfers by traffickers for ostensibly personal reasons but could be a cover for illicit activities.
- Large transactions between wildlife farms and unrelated businesses.
- Payments between disparate business entities.
- Use of bank accounts in various countries by individuals or companies tied to IWT networks.
- Middleman transactions characterized by a pattern of large incoming and subsequent smaller outgoing payments.
- Multiple vehicle rentals booked in a short timeframe across neighboring countries.
Other
- Negative media reports on entities involved in financial transactions linked to wildlife or environmental offenses.
- Air travel on IWT-prone routes paid by third parties or in cash.
- Payments to wildlife traders from industries that utilize wildlife products, including traditional medicine, leather goods, and exotic foods.
Sources:
https://www.fatf-gafi.org/en/publications/Environmentalcrime/Money-laundering-wildlife-trade.html
https://www.fatf-gafi.org/content/dam/fatf-gafi/brochures/Private-sector-and-iwt.pdf
https://www.fatf-gafi.org/content/dam/fatf-gafi/brochures/Following-the-money-IWT-lea-fiu.pdf
https://www.oecd-ilibrary.org/sites/e89fdac0-en/index.html?itemId=/content/component/e89fdac0-en
https://www.unodc.org/unodc/es/corruption/wildlife-and-forest-crime.html
https://www.unodc.org/documents/Wildlife/Financial_Flow_Wildlife_Crime.pdf
https://www.unodc.org/documents/corruption/Publications/Corruption_WLC_leaflet_210x210_PRINT01.pdf