05 Sep 2019
SIBOS19: defending against trade-based money laundering
Arun Kayal |
A shift in mindset by the financial services industry is needed to prevent trade-based financial crimes, says two ANZ experts.
17 Sep 2019
Illegal wildlife trafficking: why banks matter
Illegal wildlife trafficking (IWT) is an environmental crime. The illegal trade, smuggling, poaching, capture or collection of endangered species, protected wildlife or derivatives is also a growing global business.
Too many species are threatened with extinction as a result. Central Africa lost more than 60 per cent of its forest elephants between 2002 and 2011 alone. The demand for rhino horn - which is more expensive than gold - resulted in the extinction of Africa’s western black rhino in 2011 and threatens all five remaining species.
Illegal trafficking is the fourth largest global crime with an estimated street value of $US23 billion. Most participants are only involved for financial gain - but the impact to both habitats and humans is just as devastating.
"The demand for rhino horn - which is more expensive than gold - resulted in the extinction of Africa’s western black rhino in 2011”
Like all businesses, IWT is a function of supply and - more importantly - demand. A growing population and more affluent middle class across Asia and Latin America has increased the market for perceived luxury items - even if the purchasing these items leads to the extinction of a species and involves a high level of criminality.
And like all businesses, IWT exists on financial flows. And that’s where the global financial system can play a role.
Combining forces
Recognising the need to take greater measures in combatting IWT, United for Wildlife (UfW) works to tackle illegal wildlife trade by bringing together conservation organisations, governments and global corporations.
“Led by The Duke of Cambridge and The Royal Foundation, United for Wildlife is working to protect endangered species like elephants, rhinos, tigers and pangolins so they can share our world with future generations,” the Foundation says.
Three key projects have been established by UfW:
- Combining forces
- Demand reduction
- Protection
As part of the UfW's ‘combining forces’ initiative, a Financial Taskforce was created, acknowledging the global financial system is a crucial medium for the transfer of illicit proceeds. A key objective of the Taskforce is to improve awareness, identification and reporting of IWT.
In October 2018, ANZ joined the Financial Taskforce along with 12 other financial institutions during the Mansion House Declaration in the City of London.
"Supported by technical experts including Royal United Services Institute and TRAFFIC, along with a Secretariat, the Taskforce works to identify specific actions the financial sector can take on this issue."
Counting the cost
The commercialisation of IWT is big business. The elephant ivory market is valued at approximately $US240-$US720 million, the rhino market between $US91-$US698 million and the market for pangolins is estimated at $US46 million annually.
More than individuals
For every wildlife product sourced illegally, money changes hands in domestic pet stores, online marketplaces or, in some circumstances, under the eyes of corrupt officials.
Criminal syndicates who control the trade are dangerous adversaries for the rangers patrolling the park and protecting the animals. Poachers are often armed with automatic weapons and don’t shy away from shooting rangers. The estimated deaths of over an 1000 rangers in recent years doesn’t only impact the livelihood and families of those killed but it also undermines the very effort to detect and prevent the crime from occurring.
Despite this, IWT remains a crime that lacks an effective and holistic response.
Wildlife photographer James Morgan documented the work of an anti-poaching patrol in the central African country of Gabon for the World Wildlife Fund (WWF). He says poaching has brought more than the death of a few individuals: “It has brought about the disintegration of an entire way of life.”
But IWT doesn’t just impact population rates. Governments globally are beginning to recognise the role of IWT in undermining security and the rule of law. It is also having a direct impact on the safeguarding of financial systems meaning global banks and financial institutions have an important role to play in combatting the crime.
Steve Cumber is Financial Crime Advisory Lead and Kim Downs is Fraud and ABAC Lead at ANZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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