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Across the supply chain, for every animal or animal part poached illegally from the wild, money changes hands. Alongside the animals themselves, money moves in markets, on online platforms and between corrupt officials. This illegal trade does not only affect wildlife: it is organised financial crime run on an industrial scale for profit.
Recognition that the illegal wildlife trade is not only a crime against the environment, but also a financial crime conducted for profit is gathering momentum. While research by the UN Office on Drugs and Crime and RUSI has highlighted an ongoing lack of engagement with the financial dimension of this crime, some initiatives are picking up. These include IWT-focused financial crime courses run by a range of multilateral actors, such as the World Bank and the Asset Recovery Inter-Agency Network for Southern Africa in affected source and destination countries. Another promising initiative is the establishment of a financial taskforce led by United for Wildlife, bringing together more than 30 international banks in a communal pledge to identify and share intelligence on illicit financial flows connected to IWT. At this week’s London Conference on IWT, one of the core themes will be tackling IWT as a serious organised crime, with financial approaches on the tip of everyone’s tongue.
But recognising the profit motive behind IWT is just the first step. Taking action to identify the illicit proceeds of IWT and the use of financial investigation, confiscation laws and money-laundering charges to tackle criminals’ ill-gotten gains must be prioritised if the ‘financial’ appeal of IWT is to be addressed. Put simply, the low risk/high reward equation that currently characterises IWT needs to be reversed.
Over the past three years, the authors of this article have dedicated considerable time to researching the extent to which financial tools used to combat other organised crime types are being deployed by those seeking to investigate and prosecute individuals and groups engaged in IWT. Promisingly, some bright spots exist. For example, in a timber export permit forgery case in Zambia last year, the initial prosecuting authority – the Forestry Department – also passed the case to the anti-money laundering investigation unit of the country’s Drug Enforcement Commission to conduct a financial investigation into the profits of the alleged crime.
Uganda also offers another promising case. In 2017, the seizure of 1.3 tonnes of ivory in the capital of Kampala saw three individuals sent to trial not only for unlawful possession of protected species, but also for money laundering. On the latter charge, the lead suspect is charged with allegedly transferring $190,000 between 2014 and 2017 from an account with the Vannaseng Trading Company in Laos to accounts registered in his name at a Kampala branch of Eco Bank. The case is awaiting trial, but its precedent-setting potential is clear.
Still, these are rare exceptions, rather than the norm. In the vast majority of IWT cases, the focus of law enforcement and prosecutors is on convictions for possession. Until finance-based responses are deployed more systematically, the ‘financial’ appeal of IWT will remain as strong as ever. Sitting with his back to a noticeboard covered in seizure notifications, one IWT investigator the authors recently met with observed that without parallel financial investigations, ‘there is a page missing from the IWT investigators handbook’. Until that ‘missing page’ is inserted into the national laws and standing operating procedures of those national agencies charged with combatting IWT, the response will remain neutered and the crime cycle will continue.
The IWT London Conference is an unprecedented opportunity to write this missing page. And, in the urgent quest to translate theory into practice, there are some simple but highly effective steps that can be taken by international policymakers, domestic practitioners and the private sector.
First is the need to incorporate IWT into the national risk assessments performed by all countries ahead of their evaluations by the Financial Action Task Force (FATF), the global standard setter for anti-money laundering. These assessments are essential building-blocks used to evaluate and subsequently reinforce national economic systems against the context-specific money laundering (and, incidentally, also terrorist financing) threats they face.
Many developing countries seek assistance from the World Bank as they prepare these reports. Yet, from those reports the authors have been fortunate enough to see (few from sub-Saharan Africa are made public, with Zambia being a notable exception), there is little mention of the illicit finance related to IWT. The World Bank and its consultants command a unique position to ensure that IWT is recognised as a distinct and relevant form of financial crime that demands a national response.
Following these assessments, a second, and related duty falls on those charged with evaluating countries’ effectiveness in combating the threats identified on behalf of the FATF and its regional bodies, such as the East and Southern Africa Anti-Money Laundering Group and the Asia/Pacific Group on Anti-Money Laundering. These bodies must ensure that all forms of financial crime, including IWT, are captured in their evaluations.
Third, where existing wildlife crime legislation lacks financial crime provisions, and where IWT is not treated as a predicate offence to money laundering, this should be addressed. At the same time, resources should be devoted to reviewing upcoming or recently prosecuted IWT cases with a view to identifying any potential avenues for a parrallel financial investigation.
Fourth, when it comes to conducting financial investigations in practice, cooperation is key. Here, memoranda of understanding and other cooperative agreements between wildlife management authorities and financial crime units are crucial. Where possible, national taskforces should be formed that bring together key representatives from across prosecutors’ offices, financial intelligence units, criminal investigations police and wildlife agencies. Taskforces established in source countries should be encouraged to collaborate internationally with partners in market countries, particularly those in Asia. They should also engage with private sector actors such as mobile money operators and financial institutions that can leverage their compliance capabilities to support the identification and investigation of transnational financial flows.
All efforts to pursue these measures are welcome – and should be supported in light of their potential not only to take the profit out of IWT, but just as importantly to disrupt associated corruption. To date, however, financial investigation tools remain underutilised in relation to IWT in many locations, particularly when compared to other forms of transnational organised crime such as drugs-trafficking.
There are no easy wins in the fight against the illegal wildlife trade , but so long as the proceeds of the trade remain untargeted, we will continue to fight a losing battle. The London Conference represents a unique opportunity to open an effective and coordinated financial front against this pernicious and – with the extinction of some species looming – soon to be irreversible crime.
BANNER IMAGE: Examples of rhino horn products seized by the Hong Kong government, on display at the Visitor Centre of the Agriculture, Fisheries and Conservation Department of Hong Kong. Courtesy of Wikimedia.
The views expressed in this Commentary are the authors’, and do not necessarily reflect those of RUSI or any other institution.