Wildlife crime is a serious threat to the environment, economy, security, and public health, both domestically and internationally. Despite legal protections for wildlife, the illegal trade of protected animal species occurs frequently in Canada and other countries. Wildlife crime can include commercial activities, import/export, and re-export activities at any stage in the supply chain.
The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) regulates legal wildlife trade and ensures the protection of animal and plant species.
Additionally, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has issued an “operational alert” report “Laundering the proceeds of crime from illegal wildlife trade” to support regulated entities in recognising financial transactions that may be related to illegal wildlife trade activity.
How Serious is it?
Despite international efforts, illegal wildlife trade generates approximately USD 20 billion in criminal proceeds annually, threatening biodiversity, fuelling corruption, and facilitating other serious crimes.
In Canada, bears, cougars, geese, lynx, moose, crabs, eels, lobsters, turtles, sharks, and wolves are at high risk for illegal wildlife trade. Overseas syndicates often facilitate the illegal trade of wildlife across the world, and organised crime groups involved in wildlife crime are often involved in other domestic and internationally connected criminal activity such as human trafficking, drug trafficking, firearm trafficking, and money laundering. Wildlife crime can also have significant public health impacts, as illegally sourced and traded wildlife lack sanitary measures and increase the risk of human infection.
Between 2011 and 2022, FINTRAC reviewed around 200 Suspicious Transaction Reports (STRs) concerning illegal wildlife trade. Most of these reports involved the suspected illegal importation of wildlife into Canada, primarily from China and Sub-Saharan Africa. Additionally, some STRs suggested the suspected exportation of wildlife from Canada to other countries, including the United States and China.
How Proceeds of Wildlife Crime are Funnelled into the Economy
According to the STRs received by FINTRAC some of the common money laundering methods used for wildlife crimes include:
- Wire transfers
- E-mail money transfers
- Cash transactions
- Use of nominees (i.e., family members)
- Use of front companies (i.e., construction, transportation and logistics companies)
Red Flags for Wildlife Trade
FINTRAC identified some warning signs that suggest potential money laundering related to wildlife trade, and regulated entities should remain watchful for such indicators:
- Frequent wire transfers to jurisdictions known for wildlife crime, such as China, Hong Kong, Australia, and Sub-Saharan Africa
- Payments made to individuals or entities that are not consistent with the expected account activity, such as large or frequent wire transfers, or payments to offshore accounts or shell companies
- Transactions involving countries or regions that are known to have high levels of illegal wildlife trade
- Funds being sent to or received from individuals or entities suspected of being involved in animal-related business that are inconsistent with the profile of the client
- Invoices or shipping documents that are inconsistent with the type or quantity of goods being traded
- Importers or exporters that are not registered with relevant authorities or that have a history of non-compliance with regulations
- Payments to traditional medicine providers
- Transactions involving the procurement and payment of travel-related goods and services, such as air travel and accommodation, to and from jurisdictions where wildlife crime is a significant concern
- An individual or entity has received multiple wire transfers or email money transfers referring to species or animal parts associated with illegal wildlife trade from Canada (such as bears, grease, and eels)
- Frequent purchases or payments have been made for animal-related products or services, including supplies, cages, and freight equipment
- Frequent payments have been made to shipping companies, postal services, or cargo services
Wildlife money laundering example:
Vixay Keosavang was also known as the “Pablo Escobar of wildlife trafficking.” Keosavang was a notorious wildlife smuggler who operated out of Laos and trafficked wildlife, including elephant ivory and rhino horn, to buyers in China, Vietnam, and other Asian countries.
How the proceeds of wildlife trade were laundered
Vixay Keosavang used:
- a complex network of front companies
- shell corporations to launder the profits from his illegal activities,
- nominees or straw men to register the companies,
- a series of offshore bank accounts and then invested in legitimate businesses such as hotels and resorts.
What Can Regulated Entities Do?
Regulated entities have a critical role in combating illegal wildlife trade by implementing effective measures to identify and report suspicious transactions related to wildlife trafficking. These measures may include:
- Conducting thorough customer due diligence, particularly for customers or transactions that involve animal-related products, services, or jurisdictions known to be associated with wildlife trafficking
- Implementing risk-based policies and procedures to detect and prevent illegal wildlife trade, such as monitoring for unusual transaction patterns or red flags
- Providing regular training to employees on how to identify and report suspicious activity related to illegal wildlife trade
- Establishing strong record-keeping practices to maintain appropriate transactional data and other supporting documentation
- Collaborating with relevant law enforcement authorities, government agencies, and international organisations to enhance intelligence sharing and promote coordinated action to combat illegal wildlife trade
By implementing these measures, regulated entities can play an important role in disrupting the financial networks and supply chains associated with illegal wildlife trade and help to protect vulnerable species and ecosystems from harm.