Wildlife Trafficking & Illicit Financial Flows: The Role of Financial Investigation 8 November 2016
Jan 08, 2017
Wildlife Trafficking & Illicit Financial Flows:The Role of Financial Investigation
8 November 2016
RUSI, finance and environmental crime• RUSI: defence and security think-tank• Range of security-related (not just military) programmes
• Financial crime (Tom Keatinge)• Centre for Financial Crime & Security Studies
• Policy focus: UK, EU, FATF, etc
• Application of finance as security tool (CTF, HT, CPF)
• Partner with other RUSI programmes to bring ‘financial angle’
• Environmental crime (Cathy Haenlein)• IWT and IUU
Topics for discussion
• Wildlife trafficking: setting the scene
• Wildlife trafficking as terrorist financing?
• Wildlife trafficking as illicit trade and AML predicate offence
Setting the scene
• Poaching v’s trafficking
• Conservation v’s security
• Wildlife crime v’s financial crime
• Agent v’s principle
IWT is illicit trade and predicate AML offence
Quantifying environmental trafficking
• Narrow definitions: $7-23bn (2014, UNEP, INTERPOL)
• Wider definitions: $70-213bn (14), $91-258bn (16), +5-7%
• 4th largest illicit activity (after drugs, human trafficking, counterfeiting)
• Wide uncertainty range, variation in estimates, inconsistent data collection, variation in seizure record, volatility in prices
The pricing incentive: ivory as an example
The supply chain: ivory
The supply chain: rhino horn
IWT value chain
Wildlife trafficking as a security threat
• Not traditionally viewed as a security threat: environmental security literature, conflict resource literature
• View of wildlife trafficking as a conservation, regulation issue
• Recent change this decade – rise of 3 narratives:• Poaching, wildlife trafficking and terrorism
• Poaching, wildlife trafficking and organised crime
• Poaching, wildlife trafficking and human security
Wildlife trafficking and terrorism• Are terrorist groups earning significant revenues from
illegal ivory trade?• Al-Shabaab, LRA, Janjaweed
• The narrative is strong• Research and conservation NGO campaigns/reports
• Media (Western and East African)
• High-level political statements
• Main assertions related to Al-Shabaab• Involved directly in poaching
• Plays a major role in ivory trafficking
Wildlife trafficking and terrorism (cont’d)
Wildlife trafficking and terrorism (cont’d)• Hillary & Chelsea Clinton (2014):• ‘We have seen al-Shabaab from Somalia, the Janjaweed from Sudan, the Lord’s Resistance Army in
east Africa and other armed groups move into illegal wildlife trafficking. It has become a
multibillion-dollar business…’
• Uhuru Kenyatta (2014):• ‘The money gained from the callous business [elephant poaching] is usually directed into funding
terrorism’
• Uhuru Kenyatta (2014):• ‘The war against poaching should be treated as a double-edged sword, which decimates two evils
at once’
Why has the narrative been propagated?• No one likes poachers or terrorists – combining the two
makes a good story• ‘Softer’ way for the Western security community to
frame increased CT intervention in Africa• For NGOs and private security firms: a way to tap into
CT funding from Western governments (over conservation or counter-organised crime funding)
• For Kenyan citizens, security forces and ministers, it continues a long-standing process of externalising and politicising Kenya’s security problems, in particular blaming Somalia
‘An Illusion of Complicity’
• Exaggerated benefit• At most small-scale, ad hoc,
opportunistic and indirect involvement
• Conflation of Somali poachers with Al-Shabaab – trend of blaming Somalis
• Few herds within easy striking distance of Al-Shabaab
• Majority of poachers come from communities in major ranges
• Most East African poaching has occurred in Tanzania
IWT as financial/organised crime
• The role of organised crime and corruption at all levels of the chain is far more pervasive
• Booming demand and prices – emergence of transnational, industrial-scale and organised operations
• Growing evidence of OCG involvement. In East Africa, accepted that OCGs/corrupt officials are main facilitators
IWT as financial/organised crime (cont’d)
• Huge scale/complexity, clear indicators of OC involvement, enabled by high and low-level corruption
• This is evident by the difficulties involved in:• consolidating the hundreds of tusks necessary to make up the large volumes involved;
• moving them across multiple borders along complex supply chain (air/land/sea routes)
• and avoiding interdiction at each stage of these chains
IWT as financial/organised crime (cont’d)
• Growing % of ivory seized in ‘large’ shipments of >500kg – CITES determinant of OC facilitation
• CITES data: frequency of seizures has increased this decade. Prior to 2009, an average 5 such events occurred annually; 2009-13 rose to an average of 15
• 2012-14, such seizures accounted for 61% of all ivory confiscated worldwide
Tackling IWT as a financial crime
• RUSI HMG-funded project investigating illicit financial flows related to IWT in Kenya, Tanzania, Uganda
• Desk-top research; phone and field interviews• Private sector; local law enforcement; FIUs; anti-corruption offices; ODPP; NGOs; multi-lateral
organisations
• Next phase: in-country training for public/private sector
IWT: illicit trade, linked to OC and corruption
Yang Fenglan: Chinese national, 70 tusks, 1.9 tonnes, US$1.4 million, in court
Feisal Mohamed Ali, Kenyan national, 2 tonnes, jailed for 20 years – big success.
IWT: response must be shaped accordingly• Countries have made progress tackling ‘wildlife crime’
• Reduced poaching of rhino/ elephant (eg 80% in Kenya)
• New laws (cf Kenyan Wildlife Conservation & Management Act, 2013)
• But…• More ivory shipped through Mombasa than any other African trade route
• Financial investigation techniques underused
• Network analysis not exploited
• Link between IWT and AML/financial crime not exploited
• Rare use of financial evidence in court
• Who pays bail and fines?
Considering responses
• Champion financial investigation• Apply financial crime legislationPublic Sector
Capacity Building
• IWT spans the globe; so do financial institutions• Support training for correspondent banks• Develop awareness in transport/logistics
industry
Private Sector Involvement
• Raise IWT profile in appropriate for a addressing financial crime and illicit trade, e.g. FATF/OECD
• Industry efforts; cf Royal Foundation logistics initiative
International Support
Thank you and questions…?
• Tom Keatinge, Director• RUSI Centre for Financial Crime & Security Studies
• Tel: +44 7785 363 259
• Email: [email protected]
• Cathy Haenlein, Research Fellow• Environmental Crime Research
• Tel: +44 7762 718 992
• Email: [email protected]