Illegal Wildlife Trafficking /
Why Illegal Wildlife Trafficking Matters
And how the financial sector can do more ...
A couple weeks after World Environment Day, the Financial Action Task Force (FATF) released its first ever report addressing the illegal wildlife trade (IWT) and money laundering.
The analysis reveals that a fairly marginal number of financial investigations have been conducted in this area. Yet IWT is a pronounced environmental crime generating as much as 23 billion USD per year, making it the
fourth largest type of organized crime in the world, right behind drug trafficking. The lucrative trade boasts big profits and weak penalties, while bringing dire economic, social and environmental consequences.
While the report helps shed much-needed attention on this issue, the current pandemic offers another reason for bringing IWT to the fore.
The prime suspect of COVID-19, pangolins, are the most illegally trafficked mammals in the world. This is in spite of a January 2017 international ban on pangolin trade, which sought to help remedy their dwindling numbers in the wild. Pangolins are mainly sourced from Africa to satisfy demand in African and Asian markets where they are popular in treating a number of ailments. In Chinese medicine, the meat is used as a tonic and the scales to promote blood circulation and increase lactation in pregnant women. In many countries the consumption of exotic animals like the pangolin also bears a cultural significance, being tied to wealth and prestige.
In early June, after pressure from the Chinese NGO
China Biodiversity and Green Development Foundation, the Chinese government announced their removal of pangolins from the official list of traditional Chinese medicinal treatments.
But for some, this is not enough.
Environmental groups are demanding the government to burn stockpiles of scales as a symbolic gesture and to send a clear message — just as stockpiles of ivory tusks have been burned in countries like Kenya.
But it’s not just about pangolins.
Other trafficked wild species including birds, tigers, bears, iguana eggs and turtles are consumed by humans, often in conditions which
"escape any hygiene or sanitary control".
Non-sentient beings, including the gravely endangered and
most trafficked flora or fauna in the world, the rosewood tree, are smuggled across borders — decimating environments in Madagascar and fueling corruption.
The multitude of source, transit and destination countries clearly make IWT a global issue.
Since around 70% of emerging infectious diseases are zoonotic, meaning they originate from the transfer from animals to humans, the potential human health risk posed by this industry looms. So does the realization that preventing IWT could potentially prevent the proliferation of zoonotic diseases.
In fact experts believe in the long term, wildlife trafficking may be understood as the ultimate cause of COVID-19. This could lead to enhanced coordinated international policy, stronger enforcement crackdowns and a cultural and societal shift that significantly tarnishes the view on the consumption and trading of illegal wildlife products.
Laundering the proceeds
In its research,
the FATF report
found that during the placement and layering phase of the money laundering process, cash deposits, e-banking platforms, licensed money value transfer systems, and third-party wire transfers were used. Money mules and low-value payments were also employed to conceal the identities of sellers and buyers, as well as avoid thresholds.
In Africa and Asia, criminals commonly use prepaid cards, mobile apps, and social-media based platforms to transfer and launder proceeds. It was found that in Africa especially, mobile banking is extensively used to facilitate IWT payments.
To help justify the “movement of goods and payments across borders” front companies related to import-export industries, including in the plastics, timber, frozen foods or artwork sector were used, as were companies connected to the legal wildlife trade, such as taxidermists, farm breeding facilities, pet shops and zoos. While shell companies were common in both source and destination countries, other jurisdictions with weak regulatory environments were also exploited. This results in the prevalence of complex company structures, often multi-jurisdictional and entailing multiple layers of ownership.
The report notes in the integration stage of the money laundering process criminals laundered proceeds quite typically — through real estate and luxury items, including vehicles, jewelry and artwork.
What do you think about the future of illegal wildlife trafficking? Did any of this surprise you? Hit reply to this email — we would love to hear from you!