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The US Fish and Wildlife Service has been destroying ivory items to show it is serious about tackling illicit trafficking. Courtesy of USFWS Mountain-Prairie/Wikimedia

Wildlife Crime is Financial Crime: The Response Needs to Reflect This

Tom Keatinge and Cathy Haenlein
Commentary, 29 December 2016
Centre for Financial Crime and Security Studies, AML/CTF, Organised Crime, Africa
The illegal wildlife trade (IWT) is estimated to generate up to $23 billion per annum globally in illicit profits. Remarkably, it is still being treated as a wildlife crime rather than a form of organised crime, ignoring the financial dimension. A financial approach to tackling IWT is urgently needed.

The gulf between high-level rhetoric and effective, committed action to tackle the illegal wildlife trade (IWT) remains wide.

Even as high-level delegates from around the world came together in November in the Vietnamese capital of Hanoi for the third global IWT Summit, this gap was all too clear.

Speaking at the summit, Prince William, the Duke of Cambridge, noted, ‘The truth is we are still falling behind. A betting man would still bet on extinction’.

This is hardly a ringing endorsement of global efforts to tackle IWT. One particularly critical problem is the continued failure to recognise wildlife crime for what it is: organised crime on an industrial scale, driven by a profit motive. Responses need to reflect this motivation and systematically target the finances of those that benefit from this illicit trade.

Conservation NGOs, campaigning for national governments to do more in the fight to save endangered species, expressed disappointment at the outcome of the conference, the Hanoi Statement on Illegal Wildlife Trade.

Despite the nearly 200 commitments made by those states and multilateral organisations present and notwithstanding funding contributions from Germany, the US and the UK, the Hanoi Statement was criticised as lacking in concrete, binding commitments to take action, as well as displaying a lack of ambition.

Instead, achieving a step-change in tackling IWT requires not only 'comprehensive and collaborative implementation’ but, as the Duke of Cambridge rightly urged, a widening of the circle of involvement in combating this crime to include all elements along the supply chain, from both the public and private sectors.

New thinking and approaches are needed to complement existing efforts if the energy and enthusiasm that accompanied the first such summit in London in 2014 is not to fade by the time this gathering assembles next, back in London in 2018, with disastrous consequences for dwindling populations of endangered species worldwide.

One area in the fight against IWT that remains consistently under-emphasised is the related illicit finance. Despite the commitment made in Hanoi by the UN Office on Drugs and Crime (UNODC) to ‘work with the Financial Action Task Force (FATF) and FATF-Style Regional Bodies to ensure that wildlife crime is on their agenda’, collaboration between those tackling wildlife and financial crime remains limited.

Attendees at the summit, from NGOs and government ministries, focused overwhelmingly on arresting IWT through specific anti-poaching and trafficking measures, sustainable livelihood promotion and demand reduction.

Few take a ‘follow the money’ approach to tackling IWT. Those tasked with tackling financial crime more broadly, particularly those from national law enforcement and organisations such as FATF that set global anti-money laundering (AML) standards were conspicuous by their absence.

Yet IWT is an illicit trade estimated to be worth up to $23 billion annually. According to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), large-scale ivory seizures have risen from 5–7 cases per year prior to 2009, to an average of 15 from 2009–2013.

This is a form of organised crime that exists purely for the enrichment of those who perpetrate the business. Finance, therefore, can also contribute significantly to its disruption. Wildlife crime is, at its heart, financial crime.

Thus, until the range of tools that exist to tackle financial crime are brought to bear on IWT, an illicit global trade, the organised crime networks that have industrialised it in recent years will continue to profit.

So what should be done? Belatedly, some finance-related action is being taken. The International Consortium on Combating Wildlife Crime, which brings together parties to CITES, INTERPOL , UNODC, the World Bank and the World Customs Organization, has developed a wildlife crime and AML training programme.

The US government has committed funding to develop technical financial investigation and prosecution skills for selected countries. UNODC has committed to support countries detect, investigate and disrupt illicit financial flows from IWT.

And earlier this year, CITES adopted its first-ever resolution on the corruption that facilitates and itself accounts for much of the flow of illicit finance generated through IWT. This was reflected by the first-time inclusion of IWT at December’s International Anti-Corruption Convention in Panama.

Yet much progress remains to be made; still greater recognition of wildlife crime as financial crime is needed to allow financial crime tools, laws and responses to be deployed. Leadership is also needed from the financial crime prevention community.

While some IWT finance work has been undertaken by FATF’s regional bodies in the Asia Pacific and East Africa, leadership from the task force itself is lacking.

National Risk Assessments prepared by high-risk countries prior to FATF evaluations must identify IWT as a national money-laundering risk and it should assess the disruptive measures proposed to address this crime.

Thus far, evaluations undertaken of high-risk IWT countries such as Malaysia have failed to acknowledge and assess this risk. Vietnam itself is due to face a FATF evaluation in the next couple of years and demonstrating an AML approach to tackling IWT should be a key assessment criterion for the country.

The financial sector can also help. Placed on the frontline of financial crime prevention by regulators and law enforcement, financial institutions have developed considerable investigation capabilities that can be harnessed to assist in identifying illicit flows.

Global banks that span source, transit and demand countries can use their regional connections to raise standards in local banks, too. Domestic banking systems that fail to treat IWT as financial crime may find their access to international finance restricted; no international bank wants to handle the proceeds of this destructive crime.

No single approach will arrest the alarming decline of endangered species. Strengthened law enforcement, sustainable livelihoods, demand reduction and political leadership are all critical factors.

And so too is recognising IWT for what it is: an organised illicit business that exists like any business to generate profits for those involved.

Targeting those profits and disrupting the finances of this business needs to become as central to the fight against IWT as those traditional approaches under discussion last month in Hanoi.

Banner image: The US Fish and Wildlife Service has been destroying ivory items to show it is serious about tackling illicit trafficking. Courtesy of USFWS Mountain-Prairie/Wikimedia

Author

Tom Keatinge
Director, Centre for Financial Crime and Security Studies, RUSI

Tom Keatinge is the Director of the Centre for Financial Crime and Security Studies at RUSI, where his research focuses on matters at... read more

Cathy Haenlein
Research Fellow, National Security and Resilience

... read more

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