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Editor’s Note: The ACAMS moneylaundering.com legal team examines U.S. and global initiatives to trace and target the proceeds of illegal logging, fishing, mining, wildlife trafficking and other environmental crimes.

On Earth Day, Sunday, April 22, the U.S. Financial Crimes Enforcement Network reminded financial institutions of the role that suspicious activity reports play in helping locate and seize some of the hundreds of billions of dollars that environmental crimes generate each year.

FinCEN drew attention in the reminder to a 2021 “Financial Threat Analysis” in which the bureau disclosed that SARs filed by U.S. banks and other financial institutions from January 2018 to October 2021 named the U.S. as the top destination for suspected wildlife-trafficking proceeds, followed by China, Hong Kong, the United Arab Emirates, Kenya and the U.K.

The SARs identified “funds transfers between depository institutions” as the most common method of payment, followed by remittances, cash, peer-to-peer transfers, checks and automated-clearing-house transactions.

Ivory, rhinoceroses, elephants, reptiles, big cats, turtles, pangolins, sharks, tortoises, corals, raptors and totoabas meanwhile ranked as the most commonly traded wildlife or wildlife parts flagged by the SARs, according to FinCEN.

Congress has also taken notice of environmental crimes.

In March 2023, Sen. Marco Rubio (R-FL) introduced the Unites States Legal Gold and Mining Partnership Act, which calls upon U.S. officials to boost the “capacity of foreign civilian law enforcement [in South America] to counter linkages between illicit gold mining and money laundering, forced labor, sex work, child labor and trafficking.”

The Fostering Overseas Rule of Law and Environmentally Sound Trade Act, or FOREST Act, legislation pitched by Sen. Brian Schatz (D-HI) in the waning months of 2021, would classify deforestation as a predicate offense of money laundering and prod the White House to develop a list of nations with adequate anti-deforestation controls.

Neither bill has advanced out of committee.

On the other side of the Atlantic, U.K. authorities unveiled plans in February to launch an Economic Crime Unit within the Environment Agency to bolster Britain’s fight against illegal dumping and other waste management-related crimes through account freezing orders, cash seizures and money laundering investigations.

Germany’s Federal Environmental Agency warned in an 89-page report in January of last year that companies participating in the EU’s Emissions Trading System, a cornerstone of the bloc’s efforts to combat climate change, would soon “become considerably more attractive for money laundering due to the rising price level.”

The agency recommended that, among other measures, EU officials should ban payments of more than €10,000 in cash to guard the system from illicit finance.

The Financial Action Task Force in June 2021 identified transactions between logging companies and parties in offshore financial centers as a potential indicator of environmental crime. Financial institutions should also consider applying enhanced scrutiny to metals and waste management companies that lack a usual or logical organizational structure, FATF warned at the time.

Europol noted the following year that seemingly legitimate businesses, third-party professional enablers and fraudulent documentation underpin most attempts to launder the proceeds of environment crimes in the EU.

“Laundering … occurs through trading companies and cash payments to mules, and profits are used for the purchase of plane tickets, equipment, transport rentals, logistics, etc.,” the agency warned. “Laundering also occurs through the purchase of real estate and luxury goods, gold, and even through false loans.”

The Rio de Janeiro-based Igarape Institute recommended in August of last year that to protect the Amazon, Brazil, Colombia and Peru should “explicitly” classify environmental crimes as money-laundering predicate offenses; retrain compliance officers on how to detect and report them; and ensure that law enforcement agencies, financial intelligence units and customs authorities cooperate during trade-based money laundering investigations.

Contact Larissa Bernardes at lbernardes@acams.org