Financial Crime World

Combating Environmental Crimes: A Follow-the-Money Approach

In recent years, environmental crimes have become a significant concern globally, with wildlife trafficking, deforestation, and pollution posing serious threats to ecosystems and human well-being. To combat these crimes effectively, it is essential to understand the financial flows involved and trace illicit money trails. The Basel Institute on Governance’s Follow-the-Money Working Group has been at the forefront of this effort, bringing together practitioners from conservation, anti-corruption, and financial investigations to share experiences on tracing illicit financial flows.

Case Studies: Uncovering Environmental Crimes

Wildlife Trafficking in Southeast Asia

A recent case study by the Follow-the-Money Working Group highlighted a major wildlife trafficking network operating between Africa and Southeast Asia. The Thai Anti-Money Laundering Office (AMLO) led an investigation using Thailand’s Anti-Money Laundering Act to freeze and seize millions of US dollars worth of assets linked to the trafficker.

  • Key Takeaways:

    • Collaboration between government agencies, NGOs, and civil society organizations is crucial in pursuing financial investigations.
    • Non-conviction based forfeiture mechanisms can be effective in recovering assets even without a criminal conviction.

Deforestation in Indonesia

Another case study focused on Indonesia’s illegal deforestation, a significant environmental and social issue in the country. Forensic financial accounting techniques were used to uncover financial irregularities linked to companies engaged in agricultural production or trade.

  • Key Takeaways:

    • The use of forensic financial accounting standards, such as International Accounting Standard 41, has been instrumental in triggering pressure from investors, regulators, and civil society on companies involved in forest exploitation.
    • Collaboration between law enforcement agencies, NGOs, and civil society organizations is essential in building capacity to conduct financial investigations.

Thailand’s Role in Environmental Crimes

Wildlife Trafficking and Deforestation

Thailand has a significant role in environmental crimes, particularly in the areas of wildlife trafficking and deforestation. The country’s strategic location at the intersection of Southeast Asia and East Africa makes it an attractive hub for illicit trade.

  • Key Challenges:

    • Thailand’s anti-money laundering laws need to be strengthened to address complex financial flows involved in environmental crimes.
    • Collaboration between law enforcement agencies, NGOs, and civil society organizations is crucial in building capacity to conduct financial investigations and gather information from abroad.

The Follow-the-Money Working Group

A Platform for Practitioners

The Follow-the-Money Working Group provides a platform for practitioners to share knowledge and best practices on tracing illicit financial flows. The group’s work has shed light on the complexities of environmental crimes and the importance of a coordinated approach to combat them.

  • Key Benefits:

    • Collaboration between law enforcement agencies, NGOs, and civil society organizations is fostered through regular meetings.
    • Capacity building for financial investigations and information gathering from abroad is facilitated.