Context: In its first global report on the illegal wildlife trade, the Financial Action Task Force (FATF) has described it as a “global threat”, which is linked with other organised crimes like modern slavery, drug trafficking and arms trade.
Findings of Report:
- Illegal trade is estimated to generate revenues of up to $23 billion a year.
- The report says a financial probe is key to dismantling the syndicates involved, which can in turn significantly impact the associated criminal activities.
- Findings of the study expressed concern over the lack of focus on the financial aspects of the crime..
- Complex fraud and tax evasion: The “Money Laundering and the Illegal Wildlife Trade” report said criminals are frequently misusing the legitimate wildlife trade, as well as other import-export type businesses, as a front to move and hide illegal proceeds from wildlife crimes.
- Funds are laundered through cash deposits, under the guise of loans or payments, e-banking platforms, licensed money value transfer systems, and third-party wire transfers via banks
- The study has highlighted the growing role of online marketplaces and mobile and social media-based payments to facilitate movement of proceeds warranting a coordinated response from government bodies, the private sector and the civil society.
- Lack of required knowledge, legislative basis and resources to assess and combat the threat posed by the funds generated through the illegal trade.
- 22 of the 45 respondent countries considered themselves as source for wildlife crime, 18 as transit countries and 14 as destination countries.
- Misuse of front companies: Front companies, often linked to import-export industries, and shell firms are used for the movement of goods and trans-border money transfers.
- According to the 2016 UN World Wildlife Crime report, criminals are illegally trading products derived from over 7,000 species of wild animals and plants across the world.
- Jurisdictions should consider implementing the good practices, as observed during the study.
- They include providing all relevant agencies with the necessary mandate and tools; and cooperating with other jurisdictions, international bodies and the private sector.
- Legislative changes are necessary to increase the applicability of anti-money laundering laws to the illegal wildlife trade-linked offences.
- The Financial Action Task Force (on Money Laundering) (FATF) is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering
- As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
- The FATF reviews money laundering and terrorist financing techniques and continuously strengthens its standards to address new risks, such as the regulation of virtual assets, which have spread as cryptocurrencies gain popularity.
- The FATF monitors countries to ensure they implement the FATF Standards fully and effectively, and holds countries to account that do not comply.
- FATF has maintained the FATF blacklist (formally called the "Call for action") and the FATF greylist (formally called the "Other monitored jurisdictions").
- The FATF Secretariat is located at the OECD headquarters in Paris.
Image Source of the image: the hindu