Financial crimes related to illegal wildlife trade

Every day, an unknown number of elephant tusks, rhino horns, pangolin scales and other wildlife – alive and dead – cross the Indian Ocean in cargo containers or aboard air freighters. Their final destination is usually an Asian country such as China or Vietnam, where they are used for art, food or traditional Chinese medicine. These are financial crimes linked to the illegal wildlife trade.

Financial crimes related to illegal wildlife trade

According to the Financial Action Task Force, or FATF, an intergovernmental organization established in 1989 at the initiative of the G7 to develop policies to combat money laundering, illegal wildlife trade is a major transnational organized crime, generating billions in criminal proceeds each year. Illegal wildlife trade fuels corruption, threatens biodiversity, and can have significant negative impacts on public health and the economy. To move, hide, and launder their proceeds, wildlife traders exploit weaknesses in the financial and non-financial sectors, facilitating further wildlife crimes and undermining financial integrity.

Criminal syndicates involved in wildlife crime remain highly organised and are often involved in other forms of serious crime. For example, large-scale seizures of ivory and mixed shipments of multiple protected species suggest that transnational syndicates continue to grow and diversify. Wildlife traffickers also continue to rely heavily on bribery of government officials (e.g. rangers, customs officers, prosecutors and judges), as well as complex fraud and tax evasion, to facilitate their criminal activities.

On this scale, wildlife trafficking is, however, strongly linked to financial crimes such as bribery and corruption. According to Interpol, wildlife traders are also often involved in fraud, tax evasion, money laundering, fraud, arms trafficking and document forgery.

Globally, the proceeds from the illegal wildlife trade are estimated at $23 billion per year, or alternatively, about a quarter of the amount generated by the legal wildlife trade. As with other forms of illegal trade, there is often a significant price premium between source and destination countries. Let’s look at a few more examples:

Young glass eels

In Europe, young glass eels are worth $300 to $500 per kilo. However, the price can increase to $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 agencies seized 5,789 kilos of smuggled young glass eels, with an estimated value of $2,153 per kilo. This equates to a potential yield of around $12.5 million.

Ivory

While the price poachers pay for ivory can sometimes be as low as $200 or less, the price for ivory in destination markets can range from $500 to $1,000 per kilo. That’s a markup of 150% to 400%.

It is notable that the price of ivory has fallen in recent years due to the 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 a staggering 25.3 tonnes of ivory in three containers, representing potential sales worth approximately $12.5 to $24 million.

Rhinoceros horn

According to US authorities, the price of rhino horn can reach around $65,000 per kilo, but there have also been cases of it being sold for as little as $9,000 per kilo.

Between 2016 and 2017, criminals traded approximately 4,500 African rhino horns, worth an estimated $79 million to $292 million.

Wildlife trade supply chains impact countries differently and vary widely by species. However, wildlife crime syndicates generally poach, harvest or farm wildlife in countries that are rich in biodiversity or where there may be less oversight of law enforcement and criminal justice. These countries are typically “source countries“for the illegal trade in wild animals.

Similarly, most syndicates involved in this type of crime transport the wildlife through other countries, which “transit countries“, to reach the final destination in the so-called “destination countriesThe transit countries are usually trade and transport hubs and/or countries with higher levels of corruption.

Typically, the flow of money is divided between 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 shares of the revenue are also allocated to other stages in the supply chain. Criminals have also reinvested proceeds in source countries to cover the ongoing costs of criminal activities. Examples of this include covering the costs of shipping cargo or vehicles.

Like other large revenue-generating crimes, transnational syndicates involved in wildlife crime often consist of multiple separate sub-networks or actors, each providing specialized criminal services and skills. Depending on the size and geographic focus of the criminal group, syndicate leadership may be more or less centralized. This is one reason why tracking financial flows is an important means of identifying connections between individuals and the wider network.

While each criminal enterprise has its own characteristics, syndicate leaders for large-scale wildlife trafficking networks are often not involved in sourcing the wildlife themselves. Instead, they rely on local controllers in source countries to oversee the illegal sourcing of wildlife from various local poachers, breeders or farmers.

Syndicates often choose local controllers who have unique local knowledge or language skills and can disguise their financial activities behind the guise of legitimate business in the country. To make payments to local poachers or breeders, criminals use cash and, to a lesser extent, mobile money. Syndicate leaders may also make payments for various expenses of members, including car hire and domestic accommodation.

To transport wildlife and wildlife contraband, criminals often rely on a network of complicit officials – customs, immigration or port personnel – in the countries of origin, transit and destination to avoid detection, as well as local intermediaries, such as packers or transporters, to help prepare and move the wildlife. To conceal the true country of origin, criminals involved in the illegal wildlife trade often reroute containers or shipments through third countries and switch bills of lading or vessels.

Finally, criminals often use cash, mobile phone payments, social media and third-party payments to sell illegal wildlife.

Final thoughts

Wildlife crime is defined by CITES as the taking, trading (supply, sale or trade), import, export, processing, possession, obtaining and consumption 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 crimes against wildlife that are committed primarily for the purpose of illegal trade and profit. This resource focuses on IWT because it has a significant impact on sustainable development, safety and risk management in both the public and private sectors both the public and private sectors