In December 2021, FinCEN released a Financial Threat Analysis focused on illicit wildlife trafficking threat patterns and trend information identified in Bank Secrecy Act (BSA) data filed between January 2018 and October 2021.
With the illicit proceeds of wildlife trafficking estimated to be up to $23 billion per year, the analysis seeks to highlight and further inform efforts to combat wildlife trafficking and the associated movement of illicit proceeds.
Here are 3 key takeaways you need to know to improve the detection of illicit wildlife trafficking:
1. Funds transfers between depository institutions are the most common wildlife trafficking-related payment mechanism
They’re identified in 67% of the wildlife trafficking-related suspicious activity reports (SARs) that FinCEN analysed between January 2018 and October 2021.
Other wildlife trafficking-related payment methods detailed include money service business (MSB) transfers (17%), cash (12%), peer-to-peer transfers (10%), cheques (8%) and automated clearing house transfers (7%).
Funds potentially associated with wildlife trafficking have been reported to move through the financial systems of some of the world’s largest economies, as well as to countries that are a focus for wildlife trafficking. The U.S. Department of State has identified Cambodia, Cameroon, Democratic Republic of the Congo, Laos, Madagascar, and Nigeria as six such “countries of concern,” for wildlife trafficking.
2. Apparent money laundering activity is identified with 80% of wildlife trafficking-related SARs
FinCEN finds that the laundering of proceeds generated by potential wildlife trafficking is similar to the laundering of proceeds generated by other major crimes, including using typologies such as comingling proceeds. Laundering occurs at multiple stages of the wildlife trafficking supply chain, including laundering proceeds arising from the poaching and transport of wildlife.
FinCEN also found that illicit actors or transnational criminal organisations (TCOs) engaged in wildlife trafficking may handle the laundering of proceeds generated by wildlife trafficking themselves or potentially outsource it to a third-party or money laundering organisation.
3. There are at least 5 indicators linked to potential illicit wildlife trafficking activity
To help improve detection, FinCEN suggests there are at least five indicators linked to potential illicit wildlife trafficking activity.
While these indicators are helpful, the detection of wildlife trafficking remains challenging as it is often comingled with legal activity and often there are no specific hallmarks to wildlife trafficking. Moreover, the indicators differ according to what is being trafficked and where.
The 5 indicators of illegal wildlife trafficking are:
- The prevalence of import-export and logistics companies, which may be associated with wildlife trafficking
- Transactions involving wildlife-associated entities, such as private zoos, exotic parks or hunting-related businesses
- Transactions referencing wildlife-associated care or equipment, such as those related to the purchase or maintenance of enclosures, food and equipment
- Wildlife shipping payments masked as payment to gold, diamonds or precious metals dealers/trading businesses
- Overt or covert references to wildlife, wildlife parts, or wildlife products in chats or messages on platforms that support both communication and financial transactions
FinCEN states that since “no single indicator is necessarily indicative of criminal or suspicious activity, before determining if the transactions are connected with potential wildlife trafficking activities, financial institutions may wish to consider additional contextual information and the surrounding facts and circumstances, such as a customer’s historical financial activity, whether the transactions are in line with prevailing business practices, and whether the customer exhibits multiple wildlife trafficking-related indicators. Financial institutions may also consider performing additional inquiries and investigations where appropriate.”
How can you improve your detection of illegal wildlife trading?
You can find out more about money laundering through the illegal wildlife trade here.
While FinCEN observes that SARs filings have increased for wildlife trafficking-related financial activity, it also recognises that financial institutions’ current identification and reporting of potential wildlife trafficking does not reflect the totality of wildlife trafficking and associated illicit financial activity:
“We assess that the SARs are likely capturing only a small percentage of all wildlife trafficking-associated illicit financial activity.”
Increased reporting will however improve intelligence and ultimately help to more effectively combat illegal wildlife trafficking.
To improve your SAR filing process, take a look at our STR Builder, which transforms your suspicious transaction reporting to facilitate safer, easier filing.
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