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European Union Funds New Guide to Investigating Wildlife & Timber Trafficking

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As part of an EU-funded initiative, TRAFFIC has released a new guide to support European Union (EU) investigations into the illegal wildlife and timber trafficking trades. The 86-page report offers firms and law enforcement crucial principles to ensure effective investigations into this burgeoning environmental crime typology. The report aims to help “ensure that trade in wild species is legal and sustainable, for the benefit of the planet and people.”

Recommendations to Financial Institutions

In a special notice to financial institutions, TRAFFIC urges firms to establish a solid grasp of “patterns, transfer typologies, and other relevant factors” to pinpoint transactions that may be enabling illegal wildlife or timber trafficking. To enable this, the guide recommends that firms engage in information-sharing initiatives and improve the systems they use for due diligence through participation in public-private initiatives with law enforcement. 

The guide also discusses key typologies and patterns firms should be familiar with to ensure effective investigations. A few key sections stand out.

Distinguishing Between Wildlife and Timber Trafficking Payments

In chapter three, the guide delves into insights for investigating money laundering related to trafficking crimes. The final section highlights vital differences between payments from wildlife and timber trafficking activities.

  • Timber trafficking funds typically pass through the private financial sector and banks due to the higher amounts involved in each transaction.
  • Wildlife trafficking funds usually pass through difficult-to-trace mediums such as prepaid cards, cash, Hawala, and mobile payment methods. These payment mediums are ideal for transactions involving high volumes but smaller amounts, between hundreds and low-thousands per transaction.

Key Suspicious Transaction Red Flags

Chapter four outlines risk indicators investigators should be aware of. Many of these red flags are derived from specific case studies. Signs of wildlife trafficking include: 

  • Transactions that appear to be associated with wildlife or wildlife-associated activities – for example, animal imports, zoos, breeders, animal equipment, or other mentions of wildlife.
  • Indications of wildlife having been traded for precious metals and other high-value goods.
  • Structuring larger payments, especially by breaking them into multiple installments of EUR1,000-5,000.
  • Repeated small-value transactions on dates coinciding coincide with EU animal trade fairs.

Meanwhile, investigators should look out for timber trafficking signs such as:

  • Funds with an apparent relation to the timber trade that pass through multiple corporate structures owned by the same entities and/or that pass through multiple locations
  • A single timber export or import shipment facilitated by multiple vessels or entities
  • Payments to vessels that could transfer timber in locations without regulatory oversight

Common Crimes Related to Wildlife and Timber Trafficking

In chapter 13 of the guide, attention is given to serious criminal activities tied to these trafficking activities – particularly corruption, document fraud, tax crime, money laundering, and corporate fraud. 

Of particular note are the most common forms of money laundering related to wildlife and timber trafficking, which include:

  • Layering via cash payments or international money transfers to accomplices.
  • Concealing the origin of illegal funds by mixing them with legal funds, such as in the case of a pet shop owner participating in the illegal reptile trade.
  • Attempting to pass off illegally-procured flora and fauna as legitimate by introducing them into legal EU trade and mixing them with legal goods (trade-based money laundering).

Key Takeaways

As a critical predicate offense leading to money laundering, wildlife, and timber trafficking present a significant risk for firms worldwide to be aware of in their risk assessments. The illegal timber trade, in particular, is among the most lucrative of environmental crimes, by some figures accounting for as much as 90 percent of tropical deforestation. Given the EU’s recent emphasis on investigating and preventing this crime, European firms should look closely at their approach to these offenses and ensure their investigative processes reflect current risks, trends, and typologies.

Firms may especially want to consider the case studies outlined in the report, which give concrete examples of patterns to look for.

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Originally published 15 June 2023, updated 16 June 2023

Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.

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