Environmental crime might sound new to financial crime professionals, but it is a challenge that investigators have wrestled with for years. Discussions about using open-source intelligence (OSINT) to prevent financial crime have long been underway. The Financial Crimes Enforcement Network (FinCEN) published articles urging organisations to consider the importance of environmental crime when doing business.¹

However, the growing urgency around making environmental crime more difficult for perpetrators has increased pressure on financial institutions (FIs) to play their part. This pressure was compounded by the EU’s Sixth AML Directive (6AMLD),² which added environmental crime to the list of predicate crimes for money laundering in Europe.

Although this legislation is vital if we are to slow the impact of humans on the environment, it presents a new challenge for financial crime investigators across Europe. They are now legally obliged to become experts on yet another type of crime and risk being held responsible if they do not spot its signs. This article will detail the techniques that should be used by industry experts to identify financial crime, in particular the network-centric approach and use of OSINT.

Why Should FIs Care About Environmental Crimes?

Awareness of the scale and nature of environmental crimes is growing, but progress in preventing these crimes is slow. On average, in 2020, one rhinoceros was killed every 22 hours in South Africa,³ whilst over one million pangolins⁴ have been killed in the last 10 years. These crimes are not just horrific, but they damage local livelihoods and the loss of income from tourism, for example.

Sustainability is also a consideration when understanding the true impact of environmental crimes. For example, between 25% and 35% of the greenhouse gas released into the atmosphere comes from deforestation.⁵ Potential damage cannot be accounted for where logging is illegal and therefore uncontrolled. Illegal timber harvesting undermines many attempts by developed and developing countries to reduce human impact on the environment to manageable levels.

Money is at the heart of environmental crimes

Money is at the heart of environmental crimes. Crimes are committed so that global criminal networks can sell illegal goods in what constitutes a complex, multinational business model. Put simply, by disrupting the profitability of this business model by identifying criminal networks and stopping the passage of ill-gotten funds, these crimes can be stopped. The key to this ambitious goal is the ability to investigate potential perpetrators of wildlife crime in a timely and effective manner.

The Network-Centric Approach

For financial crime investigators, identifying and understanding environmental crimes is easier said than done. When attempting to identify criminal activity, many investigators in FIs will first rely on a list or database of relevant individuals. Whilst it may provide some usual information when looking to identify politically exposed persons or sanctioned individuals, this approach is far less effective when identifying environmental criminals, which are often unidentified and rarely listed in these databases. Instead, a network-centric approach is needed to understand subjects of interest and how they relate to the illegal wildlife trade.

Network-centric investigations focus on analysing the wider network of a subject of inter­est, such as their relationships with people, organisations and other enti­ties, to see the whole picture of the situation

The network-centric approach allows financial crime investigators to move away from the list-focused model of an investigation toward a more intelligence-led approach. Network-centric investigations focus on analysing the wider network of a subject of interest, such as their relationships with people, organisations and other entities, to see the whole picture of the situation. An individual’s name and transaction history may not provide enough context for an investigator to assess whether they have been involved in suspicious activity. However, if the individual in question is connected to several individuals on social media whose profiles show images of wildlife poaching, the investigator’s understanding of the situation may immediately change.⁶

External Data is Vital

In order to gather the data needed for a network-centric approach for investigations, financial crime investigators must look at external data sources, including live internet data. These sources may include data from the following sources:

• Corporate records: This is an essential source of information about companies that are often used as vehicles for the export and sale of products derived from environmental crimes.
• Search engines: This type of data includes articles, blog posts, personal websites and any information available on the suspect.
• Social media: Where social media is publicly accessible, it can be a great source of information about connections between individuals. In turn, this can help investigators to identify entire criminal networks.
• Dark web: If investigators can access the dark web safely, they will find numerous sellers of illegal wildlife goods and identifiers such as email addresses and phone numbers that warrant investigation.⁷

Tools provided by organisations such as Traffic⁸ also prove to be an excellent source for gathering data on individuals, crimes, as well as identifiers connected to them. By combining this data with OSINT, financial crime investigators can take a network-centric approach to understand environmental criminals and avoid facilitating the passage of funds acquired through these crimes.

Considering Technology

The network-centric approach is not only beneficial to investigators trying to identify environmental crimes, but is also useful in investigations for any predicate crimes of money laundering. This is because these crimes are typically conducted through a network of companies and individuals—regardless of whether its predicate crime is environmental, drug trafficking or terrorist financing. Therefore, a network-centric approach should, ideally, be used wherever it is not possible to understand a case using a traditional compliance/sanctions database. However, this approach has limitations, including:

• Reviewing all the sources listed above can be very time-consuming.
• When conducting investigations using online data, investigators must ensure that their identity is protected and that they are not susceptible to viruses and malware.
• Understanding the large volumes of data that these investigations can yield. Identifying connections within this data is very difficult for a human to achieve manually.

The use of technology can significantly enhance the speed and quality of an investigator’s work by automating some of the slower, manual tasks involved.⁹ This leaves the investigator with more time for analysis, which is often hard to automate and where humans can add more value. For example, technology might be able to automate data collection from multiple sources and categorise it for the investigator to easily find the data searched.

Preventing More Than Wildlife Crime

Increasing awareness of the impact that human actions have on the environment means that FIs need to take responsibility for their role in environmental crimes. By equipping their investigators to better identify environmental crime proceeds, FIs can avoid facilitating these crimes. This also can help FIs prevent damaging their reputation and violating regulatory requirements.

What is more, the impact of investigating environmental crimes can go even further. Investigations conducted by wildlife-crime-focused non-governmental organisations have revealed that many of the networks responsible for the global illegal wildlife trade are also involved in other serious crimes.¹⁰ Effective investigation of environmental crimes could not only prevent the extinction of a species but also stop drug trafficking.¹¹ Ultimately, the network-centric approach, supported by appropriate technology, is well-positioned to reduce the impact of multiple predicate crimes of money laundering.

Stuart Clarke, head of product, Blackdot Solutions, Cambridge, UK, stuart.clarke@blackdotsolutions.com

Rebecca Lindley, marketing lead, Blackdot Solutions, Cambridge, UK, rebecca.lindley@blackdotsolutions.com

1. “Proposal for a directive of the European Parliament and of the Council on the mechanisms to be put in place by the Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and repealing Directive (EU) 2015/849,” EUR-Lex, 20 July 2021, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52021PC0423
2. “FIN-2021-NTC4 FinCEN Calls Attention to Environmental Crimes and Related Financial Activity,” Financial Crimes Enforcement Network, 18 November 2021, https://www.fincen.gov/sites/default/files/2021-11/FinCEN%20Environmental%20Crimes%20Notice%20508%20FINAL.pdf
3. “394 rhinos poached in South Africa during 2020,” Save the Rhino, 1 February 2021, https://www.savetherhino.org/africa/south-africa/394-rhinos-poached-in-south-africa-during-2020/#:~:text=%E2%80%9CEvery%2022%20hours%2C%20a%20rhino,poaching%20throughout%20the%20last%20decade
4. “Saving Pangolins: The Guardians of the Forest,” The Nature Conservancy, https://www.nature.org/en-us/about-us/where-we-work/asia-pacific/china/stories-in-china/saving-pangolins/
5. “Illegal logging,” Preferred by Nature, https://preferredbynature.org/sourcinghub/info/illegal-logging-0
6. Stuart Clarke, “Tracing a Wildlife Trafficking Network with Videris,” Blackdot Solutions, https://blackdotsolutions.com/blog/tracing-wildlife-trafficking-network-with-videris/
7. Stuart Clarke, “Dark Web vs Deep Web vs Surface Web,” Blackdot Solutions, https://blackdotsolutions.com/blog/dark-web-vs-deep-web/
8. “Action on Wildlife Trade,” Traffic, https://www.traffic.org/
9. “What is an Intelligent Automation Platform?” Blackdot Solutions, https://blackdotsolutions.com/blog/intelligent-automation-platform/
10. “Shared Skies: Convergence of wildlife trafficking with other illicit activities in the aviation industry,” Traffic, 18 March 2021,   https://www.traffic.org/publications/reports/shared-skies/
11. Daan van Uhm, Nigel South and Tanya Wyatt, “Connections between trades and trafficking in wildlife and drugs,” Springer Link, 18 May 2021, https://link.springer.com/article/10.1007/s12117-021-09416-z