Wildlife crime is the illegal trade of protected animal and plant species. This activity poses significant threats to the environment, economy, security, and public health. The trade in illegal wildlife products includes poaching, smuggling, and sales of live animals or their parts. Many species are targeted for their high value, whether as exotic pets or ornamental objects.
The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) was created with the aim of managing and supervising the legal wildlife trade, as well as safeguarding animal and plant species from the adverse impacts of illegal trade. Still, the illegal wildlife trade thrives, with criminal networks using increasingly sophisticated tactics to evade detection and prosecution.
To assist regulated entities in identifying financial transactions associated with illegal wildlife trade, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has released an "operational alert" report titled "Laundering the proceeds of crime from illegal wildlife trade." The report provides guidance to financial institutions and other regulated entities to recognise and report suspicious transactions related to the illegal wildlife trade.
Despite international efforts, illegal wildlife trade generates approximately USD 20 billion in criminal proceeds annually. In Canada, many species, including bears, cougars, geese, eels, lobsters, turtles, and wolves, are at high risk for illegal trade.
Furthermore, wildlife crime can have significant public health impacts, as illegally sourced and traded wildlife lack sanitary measures, increasing the risk of human infection.
Understanding wildlife crime is essential for identifying and combating illegal wildlife trade and its associated criminal activities, as demonstrated by FINTRAC's review of around 200 Suspicious Transaction Reports (STRs) between 2011 and 2022 concerning illegal wildlife trade.
According to STRs received by FINTRAC, there is evidence to suggest that a variety of money laundering techniques are used for wildlife crime. These include wire transfers, email money transfers, cash transactions, the use of family members as nominees, and the use of front companies such as construction, transportation, and logistics firms. These firms are often used as front companies to blend legitimate funds with the proceeds from the illegal wildlife trade.
Wildlife crime is often linked to other criminal activities. Criminals use the illegal profits of wildlife crime to finance other illicit activities, laundering the proceeds through shell companies, tax havens, and other financial mechanisms.
Overseas syndicates are responsible for facilitating the illegal trade of wildlife across the world, and organised crime groups involved in wildlife crime are also connected to other domestic and internationally linked criminal activities such as human trafficking, drug trafficking, firearm trafficking, and money laundering.
Regulated entities should be vigilant for warning signs that may indicate potential money laundering associated with wildlife trade, as identified by FINTRAC.
These indicators include:
• Frequent wire transfers to countries with a known history of wildlife crime, such as China, Hong Kong, Australia, and Sub-Saharan Africa.
• Payments made to individuals or entities that do not align with expected account activity, such as large or frequent wire transfers or payments to offshore accounts or shell companies.
• Transactions with countries or regions recognised for high levels of illegal wildlife trade.
• Funds sent to or received from individuals or entities suspected of involvement in animal-related businesses that do not match the client's profile.
• Invoices or shipping documents that are inconsistent with the type or amount of goods being traded.
• Importers or exporters that are not registered with relevant authorities or have a history of non-compliance with regulations.
• Payments made to traditional medicine providers.
• Transactions that involve paying for travel-related goods and services, such as air travel and accommodation, to and from areas where wildlife crime is prevalent.
• Receiving 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 for animal-related products or services, including supplies, cages, and freight equipment.
• Frequent payments made to shipping companies, postal services, or cargo services.
Regulated entities play a crucial role in the fight against illegal wildlife trade by putting in place effective measures that enable them to identify and report suspicious transactions related to wildlife trafficking. To achieve this, they may adopt the following measures:
• Performing comprehensive customer due diligence (CDD), particularly for customers or transactions associated with animal-related products, services, or regions known to relate to wildlife trafficking.
• Implementing risk-based policies and procedures to detect and prevent illegal wildlife trade, including monitoring for unusual transaction patterns or red flags.
• Providing regular training to employees on how to recognise and report dubious activities linked to illegal wildlife trade.
• Establishing rigorous record-keeping practices to maintain appropriate transactional data and other supporting documentation.
• Collaborating with relevant law enforcement authorities, government agencies, and international organisations to improve intelligence sharing and encourage coordinated action to combat illegal wildlife trade.
By carrying out these measures, regulated entities can play an instrumental role in disrupting the financial networks and supply chains that support illegal wildlife trade, ultimately helping to safeguard vulnerable species and ecosystems from harm.