The pangolin—a creature found largely in Africa—is the most trafficked mammal in the world. This creature looks prehistoric, weighing anywhere from 2-33 kilograms and measuring 30-152 centimeters. It is estimated over 2.7 million pangolins are harvested and trafficked every year. It is believed in some cultures that their bodies possess magic-like powers and have the ability to affect crop weather. In some cultures, the pangolin is seen as a defense against witchcraft.1
By the numbers, this crime is alarming in its size and scope. It is estimated that wildlife trafficking is the fourth largest organized crime scheme in the world today. It is believed there are more tigers in captivity in the U.S. than there are free in the world. Cost markups for items like rhino horns and elephant ivory range from 10 times to over 200 times the initial cost. Prices for animals and their parts vary from region to region and depend on the desire for cash at the ground level. One of the most sobering statistics is that over 1,000 park rangers have been murdered by poachers in the line of duty protecting these endangered animals. One of the most common trends in wildlife trafficking is creatures from Africa being captured, killed or held captive then shipped to Asian countries. It needs to be stressed that wildlife trafficking has engulfed the entire planet and all are responsible for its eradication.2
Wildlife trafficking affects not only the small animals but the largest of animals as well. If current trends continue, the savannah elephant in Africa will be extinct in ten years due to wildlife trafficking.3 This is a startling statistic. The Great Elephant Census foretells their slow tragic elimination at the hands of unscrupulous wildlife traffickers. These are simple examples of how wildlife trafficking is altering the very composition of an endless list of species inhabiting this planet. A planet humans share with them.
The Success of AML Professionals
“Some people talk to animals. Not many listen though. That’s the problem….”
Modern day anti-money laundering (AML) professionals are tasked with doing more and more, at times with fewer resources. The globalization of national economies has greatly affected financial institutions and all the other industries represented in the AML industry. This has put a downward pressure on AML professionals’ capabilities as they attempt to obtain as many resources as possible to complete their goal of preventing financial crime. Having said that, AML professionals now find themselves, based on their relative success as integral players in the financial health of their requisite countries, achieving success as a result of ingenuity and persistence against significant odds.
The Environmental Impact
One of the common denominators in this matrix of proactive efforts to assist in fighting global criminal phenomena is that the poorest countries find themselves at ground zero. The exploitation of wildlife occurs most often in countries where relative poverty is commonplace and a co-driver of this illicit market. In an informative piece on this topic, David Feige observed that from a biodiversity perspective, the culling of wildlife for trafficking groups badly impacts the healthy biodiversity of the countries where these actors live. Not only are they exploiting wildlife but the actual act is also killing their local environments.4
As with other schemes, illegal wildlife trafficking is facilitated in part by the anonymous movement of funds in an effort to elude financial institutions and state governments. As capabilities are increased to track funds through partnerships and data sharing, the criminals are also working to sidestep these efforts. There is currently a “data and modus operandi” arms race.
In an effort to organize and establish frameworks to deal with wildlife trafficking, the U.K. recently convened the London Conference on the Illegal Wildlife Trade. This conference set out to comprehensively examine the root causes of this problem as well as establish priorities and frameworks in which to deliver lasting solutions. To illustrate the commitment to end this crime, the conference convened by stating:
“We, the representatives of Governments, gathered in London on 11 and 12 October 2018, recognizing the significant detrimental economic, environmental, security and social impacts of the illegal trade in wildlife, make the following political commitment and call upon the international community to act together to support and build urgent collective action to tackle the illegal wildlife trade as a serious crime carried out by organized criminals, and to close markets for illegally traded wildlife.”5
This conference laid out a simple but holistic framework in which AML professionals can have a clear line of sight into the entire issue and where AML expertise can be added. Tracking funds throughout the supply chain of trafficked wildlife will be exceedingly difficult and at times impossible. It is within the wildlife trafficking supply chain where there will be opportunities to identify the criminal players and their unique methods of moving their commodity and associated funds. The U.S. Attorney General Jeff Sessions, while addressing delegates, stated that the U.S. government estimated the value of this crime exceeds $20 billion annually.6
The AML Profession’s Mission
Advocacy by the AML community is the key to success when looking downstream toward lasting solutions and realistic assessments of the challenge. As with other efforts the industry has undertaken, AML professionals must consult and advise at all stages of the strategy formation processes. The London conference, along with previous gatherings (Kasane in 2015 and Hanoi in 2016) stressed a transnational approach leveraging partnerships and an almost asymmetrical approach to combating this crime. Any AML response to wildlife trafficking must come from robust information sharing, continual engagement with state and nongovernmental organization (NGO) actors as well as academia.
A common theme in this slow-forming international strategy is the engagement of academia at every conceivable juncture. This must be no different in the industry-specific future strategy. Understanding international, national, regional and local economies is critical to begin tracking illegal funds. The emergence of cryptocurrencies—and the more traditional wire transfer and fiat currency trading—will also loom large in any solution. Oftentimes governmental efforts to fully understand the problem have limits.
Academics as Partners
Leveraging the “muscle” of a relatively unfettered team of academic researchers, driven by a plan to dissect the issue, will equip governments and the AML industries with critical intelligence. As with efforts to understand and combat human and organ trafficking, experience has shown that academics—when properly resourced—will not only study and quantify problems but they will qualify them as well. By physically being in areas of wildlife trafficking and engaging local authorities and NGOs, insights will be gleaned otherwise unavailable to governments and financial institutions set on tracking the illegal funds.
The key to any measureable success will be to identify the origins of the more commonly trafficked species, the smuggling routes and the organized wildlife brokers, and ultimately determine the final markets for these creatures. Through intelligence-led partnerships, the majority of this information can be gleaned and synthesized into plans of action. The most successful and reliable partnerships will come from financial institutions and law enforcement agencies. Gleaning financial intelligence to deal with wildlife trafficking must come from intelligence continuums.7 Information must be constantly collected from governments, NGOs, advocacy groups, community partnerships, investigative media groups, industry-specific organizations, law enforcement, faith-based entities and many more groups.
“The greatness of a nation and its moral progress can be judged by the way its animals are treated.”
Financial institutions with mature and well-resourced AML teams have significant analytical and research capabilities. The simple act of adverse media scans followed by mass checks against transactional and account data often leads to the discovery of illegal actors banking with specific institutions. These adverse media scans will rely heavily on law enforcement publicly announcing arrests of wildlife traffickers. Law enforcement will in turn rely on regulatory filings by financial institutions to their regulators where wildlife traffickers are suspected to be operating through evidence found in transactional and account data.
Information and Data Challenges
How financial institutions come up with data models to find these wildlife traffickers will be problematic. Enter the previously mentioned academic researchers. Thorough current research, including the collection of aggregate data of previous academic efforts and the process of meta-analysis, can be informative with respect to enhancing financial institutions’ data modeling. Academia is good at finding and identifying typological evidence that is critical to any effort to seek out wildlife traffickers.
One partnership that is gaining traction in the crime-fighting world is that of evidence-based policing societies (SEBP). Memberships are growing as is the amount of research generated with these partnerships. These groups can be found in the U.K., Canada, the U.S., continental Europe as well as Australia and New Zealand. These academic research groups consist of both academics and law enforcement personnel and focus on evidence-based solutions and conclusions. By leveraging law enforcement, financial institutions’ AML/anti-financial crime teams, academia (including SEBP groups), regulators and other national government agencies, a more fulsome picture is and can be painted. This added dimension will improve our collective efforts by enhancing our line of sight into larger amounts of research.
There is great urgency for AML professionals to pick up this torch and create action teams and partnerships before more exotic and rare animals with no means of defending themselves are lost. A scan of existing research into this crime reveals that most concerned parties view this crime as the responsibility of law enforcement, animal welfare groups and environmentalists.8 Although these sectors already take care of this crime, AML teams—and financial institutions in particular—are well-positioned to aid in the fight. If AML as an industry is prepared to join this cause, they need to align with the existing strategy immediately:
- Create partnerships with national law enforcement agencies and financial regulators and study existing publicly available cases where traffickers were charged
- Work with other jurisdictions, NGOs, advocacy groups, researchers and investigative reporters to create lists of known offenders, methods of transporting these rare creatures, methods of payments at each stage, and final destinations to ascertain the customer and product typologies
- Work in partnership with other international financial institutions and create typological and statistical baselines in which data models can be created to search accounts and transactional systems to pinpoint potential wildlife traffickers
- Engage academia to assist in creating profiles of traffickers, corrupt government officials, countries with lax laws and enforcement efforts
- Organize and facilitate forums with multi-disciplinary partners to enjoin AML professionals into future solutions and enduring strategies
Lastly, this effort must center on creatures and animals that cannot defend themselves against the greed of thoughtless poachers and customers seeking these “products.” There cannot be room for moral equivalence here as there is a tragic trend of animals and other creatures being pushed toward extinction because of customer demand. Calling any future AML-centered efforts Project Rescue or something else is premature but the action will not be. The AML industry’s decision to join this fight is almost too late.
- “Pangolin,” African Wildlife Foundation, https://www.awf.org/wildlife-conservation/pangolin
- “Illegal wildlife trade is booming,” Standard Chartered, https://www.sc.com/fightingfinancialcrime/av/scb-combatting-Illegal-wildlife-trade-infographic.pdf
- “Great Elephant Census Final Results,” Great Elephant Census, http://www.greatelephantcensus.com/final-report
- David Feige, “Wildlife traffickers eye money laundering,” Fraud Magazine, March 2018, http://www.fraud-magazine.com/article.aspx?id=4295001665
- “London Conference on the Illegal Wildlife Trade (October 2018): Declaration,” gov.uk, October 16, 2018, https://www.gov.uk/government/publications/declaration-london-conference-on-the-illegal-wildlife-trade-2018/london-conference-on-the-illegal-wildlife-trade-october-2018-declaration
- “Attorney General Sessions Delivers a Statement on Behalf of the United States at the London Illegal Wildlife Trade Conference 2018,” The United States Department of Justice, October 11, 2018, https://www.justice.gov/opa/speech/attorney-general-sessions-delivers-statement-behalf-united-states-london-illegal-wildlife
- “Remarks by Interim Director Barry MacKillop - Financial Transactions and Reports Analysis Centre of Canada at the US Parliamentary Intelligence-Security Forum,” Financial Transactions and Reports Analysis Centre of Canada, December 7, 2017, http://www.fintrac-canafe.gc.ca/new-neuf/ps-pa/2017-12-08-eng.asp
- Tanya Wyatt, Wildlife Trafficking: A Deconstruction of the Crime, the Victims and the Offenders, https://rd.springer.com/book/10.1057%2F9781137269249