Money Laundering from Environmental Crime

What are environmental crimes?

These generally refer to any criminal offence that harms and endangers the environment. Types of environment crimes includes illegal mining, which refers to mining activity that is undertaken without state permission or with state permission obtained through corruption.

Why are environmental crimes a concern?

Some of the key concerns highlighted in a Financial Action Task Force (“FATF”) Report are:

1. Environmental crime is estimated to be amongst the highest proceeds-generating crime in the world.
2. Criminals frequently mix legal and illegal goods and payments early in the resource supply chains to conceal their illicit source. This makes it difficult to detect suspicious financial flows later in the value chain.
3. Criminals may use ‘shell and front’ companies to launder gains from environmental crimes such as illegal mining.

What can you do?

Regulated Dealers are encouraged to:

1. Be alert to the potential risk indicators outlined in the FATF Report such as customers with mining licences operating in or around conflict zones or transactions with frequent payments from companies involved in mining to a recipient unrelated to the person’s activity or business.
2. Take the appropriate mitigation measures such as reporting suspicious transactions to guard against the risk that your business may be abused, where relevant.

Click here for the FATF Report.