Freeland’s Steve Galster discusses new initiatives to stop illegal wildlife traffickers by hitting them where it hurts the most – in their bank accounts – and how financial institutions can help.
Trafficking in illegal wildlife is a global business with soaring profits. According to the United Nations Environment Program, the illegal wildlife trade is estimated to generate USD 20 to USD 30 billion a year. Adding to the lure of big profits is the fact that penalties for trading in illegal wildlife are ridiculously low, which makes this a tempting high-profit, low-risk business.
Stopping this trade, which is often linked to other nefarious smuggling operations such as narcotics and human trafficking, is uniquely challenging, however, because the vast majority of these dark exchanges take place under the auspices of legal enterprises.
These are registered companies with legitimate, legal pedigrees. They have accountants and books. They pay taxes and customs fees. In the end, however, every dark transaction ties back to the wanton slaughter of wildlife, which is decimating populations of elephants, tigers, rhinos, pangolins, and other species worldwide, while opening the door to potential pandemics through zoonotic transfer of viruses like Covid-19.
In the past, efforts to stop these crimes have centered around improving wildlife laws in the countries that have them and implementing them in the countries that don’t. Efforts to strengthen CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora) and the United Nations’ endeavors to curtail wildlife crimes are ongoing, and while we certainly support their continuance, their process is slow.
At Freeland, a global non-profit organization, our strategy is taking us in a different direction.
A new way to stop traffickers
Since enterprises are committing these crimes to deliver huge returns for their investors, we believe we need to look at this from a stronger business perspective to foster ways that ultimately render the entire wildlife trade business unprofitable.
Utilising Digital Intelligence (DI) is critical. DI refers to the data that is extracted from digital sources (smartphones, computers, the cloud) and the process by which agencies access, manage, and leverage data to more efficiently run their operations.
DI is interwoven into every aspect of wildlife trafficking operations. From tracing communications to tracking the transfer of illicit funds, harnessing the power of DI is helping Freeland fulfill its mission to make counter-trafficking efforts much more rewarding.
And while it’s important to focus on shutting down accounts and disrupting the supply chain, we think it’s more important to incentivise civil society, victims, and law enforcement to show that if they work together, they can help pick the pockets of traffickers and put a good portion of that money into nature recovery funds.
To that end, we’re pursuing a strategy that works first with government agencies to bring those who are illegally trafficking wildlife to justice. We then work with law enforcement and banking institutions to locate and legally freeze accounts harbouring funds generated through these criminal activities. Should governments confiscate any of these funds, we’re proposing that a portion of such monies be given to counter-trafficking and nature recovery efforts via government grants.
By legally draining the tanks of traffickers and fueling the tanks of the counter-trafficking community, we will see victims paid out, NGOs funded, and government agencies get the essential equipment and technology they need become stronger – all while making illegal wildlife traffickers weaker.
We know this can work. A tiger conservation project Freeland was involved with netted one of our first grants from the US Government. It was a restitution fine where the US Fish and Wildlife Service went after “Tiger King”-like folks in the Midwestern US who were farming tigers and selling some on the side illegally. The people involved were eventually prosecuted and heavily fined. From those fines, Freeland was granted USD 90,000 with the caveat that we put those funds into wild tiger conservation.
We built on those funds and now our tiger project has evolved to the point where we have helped bring back an Indo-Chinese tiger population that people thought was extinct. Clearly, these restitution funds can do a lot of good.
To better understand what’s driving these crimes, it’s important to see who’s profiting and why.
Who is profiting?
In a recent report focusing on the evolution of illicit trade in Asia, we highlighted that businesses involved in wildlife trafficking span a wide variety of enterprises.
Zoos and wildlife farms, for instance, are convenient types of facilities to launder animals because they have the infrastructure to hide criminal wildlife trafficking. They may also have the documents and licenses that allow them to deal with animals, which provides a convenient cover story.
Moving up the ladder, you have holding companies. These are multi-business owners, who between their business ventures might have a licence to deal with animal or agricultural products. In many foreign countries, all you need is to be able to say to the authorities, “Yes, I have a license to deal with products for food or veterinary science as well. That’s why I’m doing this. Here are my papers.”
Organised crime is also involved. In Asia, many crimes are conducted through family connections, but they’re also done through friends. These relationships often evolve into organised crime groups or syndicates.
You also have independent traders who see the glitter of bigger money and team up with criminals from other countries to do the trafficking for them. We’ve seen a Vietnamese group join forces with a Nigerian organised crime syndicate – which was already moving drugs and had a presence in Southeast Asia – to move everything for them.
Today we’re seeing hybridised organisations coming out of China that have grown so large that they no longer need middlemen. Cutting out intermediaries saves money and reduces the risk of security leaks and seizures, which keeps profits high.
These Chinese organised crime groups have sourcing agents in Africa on their bankroll, so it becomes a turnkey operation. They may go with organised crime on the ground in Africa, but only where and when it’s absolutely necessary.
Looked at from a profit-and-loss perspective, they may occasionally lose a shipment, but the rewards far outweigh the risks, and losses just become part of the cost of doing business. Those bankrolling these operations, however, (and the profits sitting in their bank accounts) are where we see opportunities to use legal means to attack their assets and stop this illicit trade.
Fortunately, we’re not in this fight alone.
Tapping banks and other resources
In the last 18 months, we’ve seen programmes buttressed by Standard Chartered, Morgan Stanley, and Deutsche Bank starting to reach across into the government and NGO sectors to offer assistance.
And the Financial Action Task Force (FATF), the global money laundering and terrorist funding watchdog group, is starting to look at indicators for wildlife trafficking. Meanwhile, United for Wildlife, a British Royal Family-backed initiative, has been looking into companies that insure shippers and banks that are willing to help save wildlife.
By getting banks on board, we’re hoping to ultimately trace illicit funds through “Suspicious Transaction” and “Suspicious Activity” reports, which banks have to file to remain in compliance with national regulations based on the FATF Standards.
The Role of Digital Intelligence
Freeland is also working on the ground with many governments to provide technical assistance during investigations. This is where digital technologies, provided by Cellebrite and others, are playing a huge role.
Readers may recall a story from several years back about how the arrest of several lorry drivers led to the discovery of a high-ranking Thai military general who headed a major human-trafficking ring. That investigation started with a single phone seized from a driver. Using modern extraction technologies, we were able to help police gather the evidence necessary to connect the dots all the way up to a top man who was eventually arrested.
Today’s advances in analytics solutions allow us to take investigations further and faster. Arrested individuals can help us build a network from “breadcrumb” or periphery information that leads to the bigger players involved. Digital Intelligence can help us follow the money trail.
Ultimately, this will lead to bank accounts, where, with help from governments and banking institutions, we see the opportunity to seize illicit funds and use a portion of those to fund further counter-trafficking efforts.
How financial institutions can help
At Freeland, we want to work with financial institutions to provide them with the knowledge needed to look for signs that might indicate they are inadvertently supporting wildlife traffickers. Forward-leaning financial institutions could adopt policies that mandate they will be a “wildlife-friendly” enterprise.
They could also take steps to ensure they’re not financing businesses that are trading in wildlife of any kind because either they could be masking an illegal trade that’s endangering the animals or possibly contributing to a future pandemic.
Beefing up analysis and compliance can be done in two ways. Financial institutions can undergo training to understand how wildlife trafficking works so they can understand which red flags to look for. Freeland can provide this through short training courses based on case studies and typologies tailored to a specific geographic region.
The second way is to subscribe to our reports and learn more about wildlife trafficking. We write these analyses out of ACET (the Analytical Center of Excellence on Trafficking) for different sectors as a resource for self-learning.
We’re also working with FIUs (financial intelligence units) in countries all over the world. Under the FATF Standards, every country should have established an FIU, which has the skills and mandate to check bank accounts and look into financial records. They have the authority to call up a bank and ask for records showing those who are regularly receiving large sums of cash.
Freeland can offer them our expert knowledge and analysis in the field of wildlife trafficking. Secondly, some of these units lack extraction or analytics solutions. We can provide these solutions and show them how modern technologies, powered by AI, can accelerate their investigations and uncover evidence that would have been impossible to find without these tools.
Making a positive impact
In the past, Freeland’s efforts have been focused more on the law enforcement community and the congresses and parliaments of the world because they have the power to refine laws and regulations to stop wildlife trafficking. But the financial world is becoming a very important sector for us.
We’d like to see some champions from the financial community speak up in favour of the approach we’re taking to trace profits made illegally through wildlife trafficking and put those funds to work to stop these crimes and help regenerate nature.
Digital Intelligence technology is the key to driving investigations that can put traffickers behind bars, protect wildlife, and lead us to illicit funds that can be used to support counter-trafficking efforts. Ultimately, that path will lead us to a safer world.
Steve Galster is Chairman of the International Management Committee at Freeland, a global, non-profit organisation with a vision for a world free of wildlife trafficking and human slavery. [continues]