Banking on sustainability: South African lenders launch task force to crack down on illicit cash flows from wildlife trafficking

Pangolins are the most trafficked mammal in the world. Image: Wikimedia Commons.

Tanya dos Santos, Daily Maverick | September 20, 2021

The world is slowly coming to grips with its interconnectedness. Crises, such as the global financial crisis and the coronavirus pandemic, have shown us just how integrated we have become as a society, linking the systems that govern the world and highlighting the need for a collaborative effort across government, business and civil society to protect against future crises. Through this, the focus on sustainability has risen in prominence, but it seems, ironically, the interconnectedness of the sustainability goals is not fully appreciated.

Bold statements like “wildlife populations have fallen by more than two-thirds in less than 50 years” seem to have done little to elevate the importance or urgency of environmental crimes. Have we become desensitised to these emotive statements or are we merely oblivious to the reality that the health and abundance of our natural world are critical to our survival?

In the past two decades, the world has witnessed an alarming increase in poaching and illegal trade in a variety of protected wildlife species. This is addressed in Target 15.7 of the UN Sustainable Development Goals (SDGs). It calls for urgent action to end poaching and trafficking of protected species of flora and fauna and to address both demand and supply of illegal wildlife products – but as with all the SDGs, it cannot be viewed in isolation, either as a risk or in its mitigation. The impact of these wildlife crimes is not limited to biodiversity loss or environmental degradation, they also undermine the rule of law, and affect economic growth and the livelihoods of the communities that depend on a flourishing ecosystem of flora and fauna.

So, where does the financial system come in? Wildlife crimes are extremely lucrative, creating significant income for criminal networks who span the globe, from developing countries where wildlife may flourish, to more developed countries where demand proliferates. These illicit profits are flushed or laundered into the legal system through various methods, all aiming to conceal their criminal origin. We keep hearing that to disrupt the criminal networks we need to “follow the money”, but this is easier said than done.

Financial flows associated with wildlife trafficking have traditionally depended on cash transactions in source countries, where poachers at the bottom of the trade chain receive smaller disbursements, which multiply as you go up the ladder. But with the advent of the “cashless” economy, we now see these payments being made through mobile money transfers, iTunes vouchers and even cryptocurrencies. This is making it increasingly difficult to follow the distribution of money.

While financial flows at the source are mostly cash-based, further up the supply chain international wildlife crime syndicates rely on the global banking system to move funds.

Technological advancements have been made on both sides, however, and the use of financial and anti-money laundering investigative practices can substantially assist wildlife crime investigations. They help to identify associated members of the criminal network, determine the derived profits and potentially allow seizure and confiscation of the related assets, while providing additional evidence to support the predicate offence – a crime that is a component of a larger crime.

This is where the banking system has an important role to play. Banks have skills and resources to detect “dirty money” associated with wildlife crimes and report any suspicious activity to law enforcement agencies which can take the necessary steps to break the chain.

Law enforcement is another tricky area. Local legislation recognises wildlife crime as a predicate offence to money laundering. But due to the complexities in investigating financial crimes like money laundering, these elements are often not explored by law enforcement authorities and therefore never prosecuted alongside the actual wildlife crime. This means that wildlife crime is considered as an underlying criminal activity which results in laundered assets.

The problem is bigger than most perceive, as is so often the case with sustainability issues. Different countries can have different classifications as to what is regarded as a wildlife crime, which means it may not be seen as a predicate offence. We therefore need governments to urgently implement adequate and aligned international legislation for the application of anti-money laundering practices to be effective across borders.

However, we are encouraged by the increasing global collaboration taking place to tackle these issues. The Financial Action Task Force is an intergovernmental body created to set international standards for combating money laundering and provides guidelines to countries on how to go after the money involved in the illegal wildlife trade, and to identify and dislocate large criminal networks who are the beneficiaries.

Another example is the Royal Foundation’s work through the establishment of United for Wildlife, which now has more than 200 members and more than 50 partners connected across the world. Together they have supported more than 150 law enforcement investigations, facilitated the search of more than 120 suspicious shipments, enabled 49 arrests and trained more than 80,000 industry employees in countering illegal wildlife trade practices.

South African banks have taken it one step further and developed a working group under the guidance of Samlit, the South African Anti-Money Laundering Integrated Task Force, to ensure a consolidated approach to wildlife trafficking. Samlit is a financial information-sharing partnership involving the public and private sectors that highlights the efficacy of collaboration. The partnership is relatively new but is geared towards ensuring that knowledge of the modus operandi of financial criminals is shared, that institutions increase their understanding of financial crime types and that the work of Samlit helps law enforcement authorities in their follow-through.

We are already seeing signs of success as organised criminals are put under immense pressure with the joint, multidisciplinary intelligence operations leading to more and more arrests in the country, with valuable help from the private sector.

The increasing innovation around online payments and the cashless environment makes a coordinated response from public and private sectors and NGOs crucial to outsmart the criminals and disrupt the financial flows related to illegal wildlife trade.

There is, however, still a long road ahead. Achieving SDG 15.7 and all that it represents will depend on genuine political and legislative commitments, private sector participation and bank collaboration to ensure we secure wildlife sustainability.

Read the original story here.