Illegal Wildlife Trade and Illicit Finance in the UK

Blog / Illegal Wildlife Trade and Illicit Finance in the UK

The commerce of non-domesticated animals or plants, generally taken from their natural habitat or cultivated under controlled conditions, as living or dead animals or their body parts, is referred to as wildlife trade.

What Exactly is Illegal Wildlife Trade?

Unlawful wildlife trafficking is defined as any environmental crime involving the illegal trading, smuggling, poaching, capture, or assemblage of endangered species, protected wildlife (including animals and plants subject to harvest quotas and governed by licenses), derivatives, or products thereof.

A strong and rapidly growing demand for a variety of products around the world is at the spirit of illegal wildlife trafficking: bushmeat; ingredients for traditional Chinese medicine; exotic pets; jewelry, trinkets, and accessories such as chess sets; furs for uses ranging from coats to traditional costumes; and trophies. 

Illegal Wildlife Trade (IWT)

The Connections Between Illegal Wildlife Trade and Illicit Finance

The connections between illegal wildlife trade and illicit finance are mainly related to money laundering. Criminal networks involved in the illegal wildlife trade use illicit finance to launder the profits obtained from the sale of trafficked animals and their products. They do this by using various methods, such as setting up shell companies, laundering money through legitimate businesses, and using informal value transfer systems.

Money laundering is often used to fund other criminal activities, such as terrorism and drug trafficking. In some cases, the proceeds from illegal wildlife trade have been linked to terrorist organizations. For example, in 2013, Al-Shabaab, an Islamic extremist group, was found to be involved in the illegal ivory trade in Somalia. The group was using the profits from the ivory trade to fund its terrorist activities.

Furthermore, the illegal wildlife trade is often linked to corruption. In many cases, corrupt officials are involved in facilitating the illegal trade by providing permits and licenses, turning a blind eye to illegal activities, or accepting bribes. This creates a vicious cycle of corruption and illegal activities that undermines the rule of law and fuels insecurity.

Investigation on Illegal Wildlife Trade and Illicit Finance in the UK by RUSI

On the global stage, the UK is a major proponent of the need to follow the money when it comes to illicit wildlife trading (IWT). However, little attention has been paid to assessing the UK's domestic performance in this area. The Royal United Services Institute (RUSI) is the world's oldest defense and security think tank, as well as the UK's foremost defense and security think tank. Its purpose is to inform, influence, and deepen public discourse about making the globe a safer and more stable place. The RUSI's research is the first independent study to examine the UK's vulnerability to and reaction to IWT-related illicit funding, and it makes suggestions to strengthen enforcement action.

The G7 2030 Nature Compact, agreed upon under the UK Presidency in June 2021, charged relevant ministers with responding to the Financial Action Task Force's suggested steps to identify, analyze, and manage money laundering concerns associated with illicit wildlife trading.

In January 2022, the RUSI published the Whitehall Paper, which evaluates the UK's performance with respect to the Financial Action Task Force's (FATF) 2020 call for action in three key areas based on an open-source literature review, analysis of government enforcement data, a targeted 'request for evidence,' and 40 semi-structured interviews.

FATF calls for action in three specific areas: 

  • Impacted nations making efforts to analyze their vulnerability to IWT-related illicit financing;
  • to guarantee that legal authorities exist to bring financial charges in connection with IWT offenses;
  • and to conduct a higher number of concurrent financial inquiries in IWT instances.

Illegal Finance Associated with IWT

In general, the FATF considers the United Kingdom to be particularly "vulnerable and at risk of being exploited as a destination or transit place for illegal gains." Cyber-enabled IWT is known to produce substantial profits; in IFAW's single six-week observation study in 2018, advertising for suspected illicit wildlife goods totaled £741,676.45. However, in the lack of more intelligence, the UK's 2020 national risk assessment (NRA) of money laundering and terrorism financing merely indicates that the country is a source, transit, and destination country for illegally trafficked wildlife to varying degrees. It does so by stating that "the proceeds involved can in certain situations reach enormous amounts, but normally entail lesser levels of proceeds in the UK, with the potential to create exponentially bigger proceeds when sent overseas and resold in the purchaser's country."

Unlike other forms of offense, there is no attempt to determine the total amount of money laundered in the UK. The NRA also does not estimate the social and economic implications of IWT in the UK. Despite specifically noting that "criminal proceeds related with IWT are created in and transported through countries across the world, including the UK," the NRA often fails to distinguish between domestic and international offenses, the proceeds of which are laundered in the UK.

In the paper's conclusion, it is stated that although the NCA's 2020 National Strategic Assessment of Serious and Organized Crime recognizes the potential of bribery and corruption linked with politically exposed people (PEPs) participating in IWT overseas as an "emerging concern" to the UK. Similarly, the United Kingdom's 2017–22 Anti-Corruption Strategy emphasizes that IWT is aided by corrupt individuals who launder their gains "via international financial hubs." However, awareness of both the impact of foreign IWT-linked revenues laundered in the UK and the role of the UK financial system in facilitating IWT offenses that cause significant harm overseas remains inadequate.

Financial Crime Risks of Trade

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