Written by Teodora Harrop, FICA on Monday February 28, 2022
Competing priorities mean that there are today many areas jostling for a compliance officer’s attention. But amid the din, there is one vital area often inadvertently overlooked: the illegal wildlife trade. We do so, however, to our great cost.
Targeting a wide variety of species, from sea turtles to black bears, the illegal wildlife trade end-customers range from private collectors to the fashion, cosmetic, traditional medicine and hospitality industries.
It has been described as a low-risk, high-reward crime; a conservative estimate of the illegal wildlife trade’s value is a staggering £17 billion a year, though some suggest it could be double this amount – for perspective, £17 billion is equivalent to that spent by the UK’s National Health Service during the current pandemic.
In its most recent SARs in Action bulletin, the UK National Crime Agency (NCA) stressed the pervasive, and destructive, nature of the illegal wildlife trade:
Next time you sit down to sushi just give a thought to the fact that you may be taking part in the illegal wildlife trade (IWT). That eel may have been sold as an American, but it may be an illegally smuggled European, heading for extinction. 
This excerpt neatly captures the corrosive nature of the threat the trade poses to our shared natural environment; in these times of ecological peril, illegally trading in wildlife is not just a crime but an assault on sustainability and the future of our planet’s species, too.
At a transnational level, corruption has become a critical enabler of the illegal trade in wildlife.
Most companies aim to conduct business with integrity. Yet sometimes, ambitious business plans – to expand quickly in new jurisdictions, for example, often through use of third-party intermediaries to expedite bureaucratic formalities – can lead to facilitation payments.
The proceeds of wildlife trafficking may also be used to bribe politically exposed persons (PEPs) and other lower ranking public officials to attain a desired business outcome, but also to obtain safe passage for the proceeds of wildlife trafficking.
Developing a reasonable understanding of the supply chain is the first step in ascertaining whether corporate entities may inadvertently participate or facilitate illegal trading in wildlife.
The first link in the supply chain comprises poachers and other people involved in the illegal sourcing of such products. At this stage, FATF estimates that informal money transfer value systems tend to be used, such as the Chinese value system Daigou, or alternative remittance systems such as Hawala. 
Runners or brokers purchase wildlife products directly from poachers and are the next link in the chain. At this stage, cash payments are typically used, making it difficult to monitor the range of transactions. 
Intermediaries or dealers usually specialise in transporting and delivering the products to the exporter. It is at this stage that money transfer services and bank accounts are used, with a corresponding high volume of transactions, often international.
FinTech and mobile money services can also be exploited by criminals at this stage of the supply chain. In recognition of this, M-Pesa was the first provider to proactively and publicly take steps to prevent this type of crime, by joining United for Wildlife in December 2020, a coalition of charities that aim to fight illegal wildlife trafficking. The then Head of Risk & Compliance of M-Pesa commented that:
Criminal activity not only endangers animals and threatens the security of rangers but also contributes to the spread of zoonotic diseases – infections caused by a pathogen that has jumped from animal to human – such as Covid-19 and Ebola. 
4. Exporters and importers
Here, the preparation work begins, in terms of obtaining relevant travel documents and potential concealing of the products.
Large international money transfers and remittances can be red flags for financial institutions, however companies providing transportation services also need to be cognisant of the risks of being misused by criminals. One of the recommendations of the United Nations Office on Drugs and Crime (UNODC) 2016 report on the topic was that ‘profiling and targeting mechanisms for suspicious shipments and persons should be mobilized to improve risk management systems and promote their active use’. 
5. Wholesale traders
Wholesale traders may at this point sell the products alongside legitimate products; the size and range of transactions are likely to vary at this stage too, depending on the actual products being trafficked.
Retailers sell the products to customers, from companies operating in a range of legitimate sectors (e.g. fashion, jewellery) to private collectors.
Traditional payment methods can be used at this point, such as invoice payments and card transactions, but often the description of the products is changed to obfuscate their provenance.
Due to the global nature of the crime and the wide range of jurisdictions involved, prosecution has been challenging. Often the illegal wildlife trade occurs alongside other offences, such as drug dealing or illegally trading weapons. In June 2020, FATF reinforced the message that further work is required for the fight against the trade to be effective:
Without a comprehensive legal framework for addressing both [the illegal wildlife trade] and ML offences, jurisdictions may be limited in their ability to effectively investigate, prosecute and sanction illegal wildlife traffickers, syndicates, and affiliated money launderers. 
The introduction of the Sixth EU Money Laundering Directive (6MLD) in 2018 played a key part in the development of such a framework in Europe, with 22 predicate offences introduced, including environmental crime. Member states were expected to transpose this into their domestic legislation by 6 December 2020.
Though corporate entities are at different stages in their journey to shape and implement their environmental, social and governance (ESG) strategies, the UK Financial Conduct Authority (FCA) signalled that firms ‘large and small can use their business decisions, their innovation and creativity, and their voice and their influence, to encourage positive change’. 
Due diligence, including adverse media and PEP screening, is an established defence in preventing the risk of money laundering and disrupting the flow of money relating to the illegal wildlife trade. Transaction monitoring and reporting any suspicions to the relevant financial intelligence unit are also invaluable in providing information, to allow for a better understanding of the key typologies and the steps that need to be taken.
However, better and more frequent information sharing of trends, typologies and red flags would greatly assist corporate entities in understanding their risk exposure and taking appropriate measures. Cooperation between the public and private sector also remains vital, helping prevent and disrupt the illegal trade in wildlife and aiding corporate entities to deliver their ESG strategies.
You may also like:
 European Commission, ‘The EU Approach to Combat Wildlife Trafficking’: https://ec.europa.eu/environment/cites/traf_steps_en.htm – accessed October 2021
 National Crime Agency, SARs in Action, November 2021: https://www.nationalcrimeagency.gov.uk/who-we-are/publications/578-sars-in-action-november-2021/file – accessed November 2021
 FATF, Money Laundering and the Illegal Wildlife Trade, June 2020: https://www.fatf-gafi.org/media/fatf/documents/Money-laundering-and-illegal-wildlife-trade.pdf – accessed October 2021
 Vodafone, ‘M-Pesa joins United for Wildlife’, November 2020: https://www.vodafone.com/news/planet/m-pesa-first-african-fintech-united-for-wildlife – accessed December 2021
 The United Nations Office on Drugs and Crime, World Wildlife Crime Report: Trafficking in Protected Species, 2016: https://www.unodc.org/documents/data-and-analysis/wildlife/World_Wildlife_Crime_Report_2016_final.pdf – accessed December 2021
 Financial Conduct Authority, ‘A strategy for positive change: Our ESG priorities’, November 2021: https://www.fca.org.uk/publications/corporate-documents/strategy-positive-change-our-esg-priorities – accessed November 2021
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