A Guide to Anti-Money Laundering for Crypto Firms
Financial Action Task Force (FATF) President Dr. Marcus Pleyer has called for a global move against illicit profits generated from environmental crimes.
Speaking at a high-level conference attended for the first time by heads of international organizations including the UN’s Office on Drugs and Crime (UNODC), UN Environment Program (UNEP), and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), Dr. Pleyer discussed how to develop partnerships to tackle the “dirty money that helps fuel environmental crimes”.
“Tackling money laundering linked to environmental crime is an often overlooked part of a much larger solution to helping save our climate,” said Dr. Pleyer. “At the moment, far too often, criminals and their gangs are getting away with it. They make billions from looting our planet.”
Environmental crimes – which include illegal logging and mining, waste dumping, and animal trafficking – are a growing topic of concern and focus of compliance efforts around the world.
It is estimated environmental crimes generate around $110bn to $281bn in criminal gains each year, and ‘following the money’ connected to these crimes is an increasingly important focus.
The conference focused on two themes: how to assess exposure to illicit financial flows from environmental crimes, and how international cooperation can help combat this threat.
Under its German Presidency, the FATF has made it a priority to help countries follow the money linked to environmental crimes, and identify and disrupt the criminal networks involved. Its environmental crime report provided practical guidance to help compliance teams operationalize concerns about environmental crimes.
The conference highlighted that while many countries are starting to make progress in areas such as increased financial intelligence, there is still a need to prioritize data collection, anti-corruption measures, and the effective implementation of FATF standards, including transparency around the beneficial ownership of companies. FATF has added several examples of environmental crimes to its Glossary to clarify the types of offenses that fall into this category.
Implementation of FATF’s wider standards will itself help tackle environmental crimes, and mutual evaluation processes will be used to help countries follow money linked to environmental crime. Outcomes from the conference will be reported to FATF’s next plenary meeting in February.
Environmental crime in Asia Pacific
The fight against environmental crime also took center stage at November’s Asia Environmental Enforcement Awards, where environment protectors and bodies within Asia were recognized for their work on the prevention of environmental crime.
“Crimes that harm the environment enjoy a high level of impunity as they fall between the cracks of different sectors, such as security, conservation, and trade,” Jeremy Douglas, Regional Representative for UNODC told the Awards’ virtual attendees.
“The winners of this Award have succeeded in filling those gaps and bringing justice thanks to their drive, courage, and creativity.”
The Fintel alliance developed by AUSTRAC, the Australian regulator, has also been recognized by INTERPOL for its contribution to protecting wildlife from illegal trafficking. The initiative, which includes major Australian banks as well as PayPal Australia and Western Union, has helped to develop a complete picture of the threats to wildlife in the country.
In Singapore, dogs trained to sniff out ivory and other illegal wildlife parts were introduced in 2021 to help clamp down on wildlife smuggling and enforce a new ban on all trade in ivory.
Wildlife and forest crime in the East Asia and Pacific region more widely is generating around 19.5 billion every year, according to the UNODC and ASEAN Center for Biodiversity. The pandemic has also pushed 104 million people in Asia into extreme poverty, amplifying illegal wildlife hunting and illicit trade at a local level. The pandemic also impacted enforcement and record keeping.
For compliance teams, it is important to fully understand their firms’ exposure to environmental crimes. Chapter 5 of FATF’s Money Laundering From Environmental Crimes report focuses on priority actions that firms should be instigated, and the potential risk indicators on page 53 are particularly worth delving into.
There is a wealth of information about environmental crimes available for compliance teams globally, and it is important to stay up-to-date with legislation and regulations that might impact firms indirectly as well as directly. Staff vigilance on client accounts that might be linked to environmental crimes is also key.
Read our insights into detecting and preventing environmental crime.
Originally published December 16, 2021, updated December 16, 2021
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