Chapter 3 - Escalating Risks (Red Flags and Suspicious Activity) Flashcards
IWT investigations and financial institutions
Illegal wildlife trade investigations rarely include financial crime investigations, despite the reality that trafficking presents financial institutions with serious legal, financial, and reputational risks.
Kromah Case
- syndicate members originating in Uganda used the Kenyan financial system to transfer funds for illicit wildlife products with falsified documents
- the syndicate had a preference for using money transfer service businesses to transfer illicit cash
Shows: - transcontinental and transnational nature of illegal wildlife trade syndicates
- Convergence with Drug trafficking
US-China Turtle Smuggling Network (Paypal)
Significance
- US authorities were able to target a Chinese national living in China through money laundering laws
- Money laundering can be applied as a stand-alone offence in the context of wildlife crime
- transactions ranged in value from as little as $472- $4,000, and flowed through accounts the accused opened at a Chinese bank, sometimes involved the use of an alias. Additional transactions involved mobile banking platforms such as Zelle and WeChat
High Risk Industries - observed as linked to the IWT
Source Countries
• Game lodges, safari parks
• Captive-breeding farms, ranches, and facilities, especially involving CITES listed species
• Animal product exporters- (e.g. donkey skins, seafood, hunting trophies)
• Any environmental product supplier
• Secondhand car dealers and other cash intensive businesses, used clothes and shoes businesses
• Companies that sell low value/high bulk agricultural products (key exports that may be exempted or fast-tracked for export i.e.: tea in Kenya)
• Import-export companies, shipping logistics providers
• Restaurants
• Logging companies, timber companies, other extractive industries
- Travel agents
- general trading companies and free-trade zone companies
-
High Risk Industries - observed as linked to the IWT
Destination Countries
- Medicine production, medical testing facilities
- Pet stores, zoos and breeding farms
- Leather goods importers, manufacturers
- Import-export companies
- General trading companies
- Furniture production companies
- Arts, crafts, curios and antiques retailers
High Risk Industries - observed as linked to the IWT
Across the supply chain
- Travel Agents
- Restaurants
- Timber trading companies
- Cash intensive businesses (e.g. used clothing and shoe sales, used car sales)
- Transport and logistics companies
- General trading companies and free-trade zone companies
- Import-export companies
- Seafood and Marine Products importers/exporters
- Any company involved in the legal wildlife industry
- Low-value cash industries
Financial transaction red flags
- Account activity is inconsistent with the client profile
- Deposits followed by immediate withdrawals of similar amounts
- Commingling of personal and business proceeds
- Heavy use of cash, linkage of local PEPS and public officers (bribe payments) and the use of nominees
- Use of money transfers services
- Multi-country accounts and payment schemes
- International bank transfers via general trading companies
- Illogical or anomalous loans between trading or import/export companies in key illegal wildlife trade source or transit countries
- Unexplained large financial transactions from Companies in high risk Destinations»_space;to» Freight forwarding/Customs clearance companies operating in high risk Origin countries
Often generic money laundering red flags and cannot always be distinguished as wildlife crime
When the indicators are combined with data on high risk client profiles, geographies
and industries, they can be powerful tools to identify suspicious transactions.
Key Reports
3 - on red flags and typologies and financial flows related to IWT
2016 - ESAAMLG
2017 - UNODC & APG
2020 - FATF
All report addtl insights, types, case studies
IWT Red Flags
- Account activity is inconsistent with the client profile
- heavy use of cash, linkage of public officers (bribe payments), use of nominees
- deposits followed by immediate withdrawals of similar amounts
- commingling of personal and business proceeds
- use of money transfer services
- International bank transfers via general trading companies
- Multi-country accounts and payment schemes
- illogical or anomalous loans between import/export companies in high risk zones
- unexplained large financial transactions from Companies in high risk Destinations to Freight Forwarding/Customs Clearance Companies operating in high risk Origin countries
- often generic money laundering red flags, hard to distinguish as wildlife crime within the bank r institution
however - when combined with data high risk profiles, industries and geographies, can be used to ID suspicious transactions
- criminals nest their work in licit interactions
- financial investigations are labor intensive, but much needed
Xaysavang Network
- Thai national played important role - pseudo hunting techniques
- Thai sex workers posing as hunters - paid $300US
- ## Finanical investigaions
Xaysavang Network
- Thai national played important role - pseudo hunting techniques
- Thai sex workers posing as hunters - paid $300US
- Financial investigations show
CASH: withdrew from his Laotian bank account in large amounts from local casino
- used to pay sex workers (?), other syndicate members for the goods, and transportation
International Bank Transfers
International payments
- wildlife products - rhinoceros products paid for by local cash payments and international payments
- intl bank transfers sent from personal and business (import/export) accounts in Thailand and Laos to game farms in South Africa for the illegal hunts
Commingling funds
- invoices were sent from various game farms
for payment under the name of the Saysavang Import Company
“PAblo Escobar of IWT”
Saysavang Network linked to several species
Outcome:
- sentenced in South Africa to 40 years under the for national environmental management biodiversity act of 2004 for failing to comply with permitting requirements and
- customs excise (?) act 1964 for misusing permits and licenses and docs
Appealed to 13 years with 1 mill or addtl 5 years in prison
- However he has already been extradited to Thailand
- SA authorities considered paying money laundering charge which was dropped to speed up the prosecution
- Assets accumulated from the proceeds of crime were recovered in both SA and Thailand including high value ?? in SA, Thai authorities forfeited multiple bank accounts
