Every day, an unknown number of elephant tusks, rhino horns, pangolin scales, and other wildlife items – living and dead – cross the Indian Ocean in freight containers or on board of air cargo carriers. Their final destination is usually an Asian country such as China or Vietnam, where they are used for art, food, or in traditional Chinese medicine. That’s financial crimes related to illegal wildlife trade.
Financial Crimes Related To Illegal Wildlife Trade
According to the Financial Action Task Force, or FATF, which is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering, the illegal wildlife trade is a major transnational organized crime, which generates billions of criminal proceeds each year. The illegal wildlife trade fuels corruption, threatens biodiversity, and can have a significant negative impact on public health and the economy. To move, hide and launder their proceeds, wildlife traffickers exploit weaknesses in the financial and non-financial sectors, enabling further wildlife crimes and damaging financial integrity.
Criminal syndicates involved in wildlife crime continue to be highly organized, and are often involved in other forms of serious crime. For example, the large-scale ivory seizures and mixed shipments of multiple protected species suggests that transnational syndicates are continuing to grow and diversify. Wildlife traffickers also continue to rely heavily on the bribery of officials (e.g., including rangers, customs agents, prosecutors, and judges), as well as complex fraud and tax evasion, to enable their crime.
At this scale, illegal wildlife trade is, by all means, strongly connected to financial crimes, such as bribery and corruption. According to Interpol, illegal wildlife traffickers also commonly engage in fraud, tax evasion, money laundering, fraud, arms trafficking, and falsification of documents.
Globally, the proceeds from the illegal wildlife trade have been estimated at up to $23 billion per year, or alternatively, at around one quarter of the amount generated from the legal wildlife trade. As with other forms of illicit trade, there is often a significant price mark-up between the source and destination countries. Let’s discuss a few more examples:
Juvenile Glass Eels
In Europe, juvenile glass eels are worth $300 to 500 per kilo. However, the price can reach as high as $1,500 to $6,000 per kilo when exported to destination countries. This represents a mark-up of 200% to 1,100%.
According to EUROPOL data, between 2018 and 2019, European law enforcement seized 5,789 kilo of smuggled juvenile glass eels with an estimated value of $2,153 per kilo, which equated to potential proceeds of around $12.5 million.
While the price paid to elephant poachers can be just $200 or less, in destination markets ivory can be priced at between $500 and $1,000 per kilo, representing a mark-up of 150% to 400%.
Notably, the price of ivory has been decreasing in recent years due to high profile ivory bans in a number of countries (e.g., China, UK, US etc.).
Between March and July 2019, Vietnam, China and Singapore seized as much as 25.3 tones of ivory in three containers. This represents potential sales generating around $12.5 to $24 million.
The price of rhinoceros horn can reach around $65,000 per kilo, but has also been known to be sold as low as $9,000 per kilo, according to US authorities.
Criminals trafficked approximately 4,500 African rhinoceros horns between 2016 and 2017, generating estimated proceeds of between $79 and $292 million.
The supply chains for the illegal wildlife trade impact countries differently, and are largely distinct across species. Nevertheless, in general, syndicates involved in wildlife crime usually poach, harvest or breed wildlife in countries that are rich in biodiversity or where there may be weaker law enforcement oversight and criminal justice. These countries are typical “source countries” for the illegal wildlife trade.
Similarly, most syndicates involved in such crime transit the wildlife through other countries, which are the “transit countries”, in order to obfuscate the end-destination in the so-called “destination countries”. The transit countries typically include trade and transport hubs, and/or countries with higher levels of corruption.
Typically, the flow of funds is distributed across source, transit and destination countries for illegal wildlife. While the majority of proceeds usually end up in the country where the leaders of a criminal group are based, larger revenue shares also allocated to other stages in the supply chain. Criminals have also re-invested proceeds back into source countries to cover the ongoing costs of criminal activity. Examples include covering costs for shipping loads or for vehicles.
Similar to other major proceeds-generating crimes, transnational syndicates involved in wildlife crime are often composed of multiple distinct sub-networks or actors who each provide specialized criminal services and skills. Depending on size and geographic focus of the criminal group, the syndicate leadership may be more or less centralized. This is one of the reasons why following the financial flows is an important means of identifying links between individuals and the broader network.
While each criminal enterprise will have distinct characteristics, for largescale wildlife trafficking networks, syndicate leaders are often not involved in sourcing the wildlife themselves. Instead, they rely on local controllers based in source countries who oversee the illegal sourcing of the wildlife from various local poachers, breeders or farmers.
Syndicates often choose local controllers who have unique local knowledge or language skills, and can hide their financial activities behind the pretense of legitimate business in the country. For the payments to local poachers or breeders, criminals use cash, and to a lesser extent, mobile-money. Syndicate leaders may also make payments for members’ miscellaneous expenses, including hire vehicles and domestic accommodation.
For the transportation of wildlife and wildlife contraband, criminals frequently rely on a network of complicit officials – customs, immigration or port personnel – across source, transit and destination countries to avoid detection, as well as local intermediaries, such as packers or transporters, to help prepare and move the wildlife. To hide the real country of origin, criminals involved in the illegal wildlife trade often divert containers or shipments through third countries, and switch the bills of lading or vessel.
Finally, for the sale of the illegal wildlife, criminals commonly use cash, mobile or social media-based payments, and third-party payments.
Wildlife crime is defined by CITES as the taking, trading (supplying, selling, or trafficking), importing, exporting, processing, possessing, obtaining, and consuming of wild fauna and flora, including timber and other forest products, in violation of national or international law. The CITES definition of wildlife in this publication is “all wild fauna and flora, including animals, birds, and fish, as well as timber and non-timber forest products.” The term illegal wildlife trade (IWT) refers to wildlife crimes committed primarily for the purpose of illegal trade and profit extraction. This resource focuses on IWT because it has a significant impact on sustainable development, security, and risk management in both the public and private sectors both the public and private sectors