Minister Donohoe welcomes the publication of the Financial Action Task Force study on Environmental Crime and Money Laundering
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From: Department of Finance
- Published on: 8 July 2021
- Last updated on: 7 September 2021
Minister Donohoe welcomes the publication of the Financial Action Task Force study on Environmental Crime and Money Laundering.
The Financial Action Task Force (FATF) recently published a report setting out its findings from a year-long study into Money Laundering arising from Environmental Crime. The work was led by officials from the Irish Department of Finance, its Canadian counterpart and officials from the United Nations Office of Drugs and Crime. While environmental crimes cover a wide range of activities, the report focused specifically on forestry crimes, illegal mining, and waste trafficking. Drawing on case studies from over 40 countries, as well as consultations with civil society and the private sector experts, the FATF report seeks to strengthen awareness of the scale and nature of criminal gains and money laundering techniques for environmental crimes.
Criminals involved in perpetrating environmental crime are becoming increasingly organized, and integrated within broader regional crime networks. Environmental crime generates an estimated USD 110 to 281 billion in criminal gains each year, according to INTERPOL. The three focus areas of the FATF’s recent study - forestry crime, illegal mining and waste trafficking - account for two-thirds of this figure.
Speaking about the report, Minister for Finance, Paschal Donohoe TD said;
“I welcome this study as an important addition to the toolkit of policy makers internationally as collectively we look to address the serious criminal activities that are being perpetrated in Environmental crime. Not only does the report detail the full scale of these crimes, helping us to better understand the issue, but it provides a set of actions that Governments and the private sector can take to disrupt these financial flows. I am delighted that the Department of Finance was able to play a leadership role on this project.”
Despite the significant proceeds generated, the understanding of governments around the world of risk and action to confiscate proceeds have not moved in line with the scale of this threat. Environmental crime is enabled by bribery, fuels corruption, and converges with many other serious and organised crimes, such as tax and trade fraud, drug trafficking and forced labour. Criminals frequently rely on front companies to co-mingle legal and illegal goods and payments to avoid detection. These all present challenges in their own right, and limit the capacity of authorities to combat environmental crime.
As a priority, the FATF report finds that countries should:
1. Consider the money laundering threats posed by environmental crimes, even for countries that do not have domestic natural resources. These risks should be considered holistically alongside domestic vulnerabilities, such as propensity of corruption, or dialogue with stakeholders that may not be traditional anti-money laundering (AML) entities (e.g. mining, logging companies and supply chain intermediaries).
2. Strengthen coordination between AML authorities and environmental crime experts, including ensuring that AML authorities have sufficient powers to investigate and trace assets from environmental crimes.
By detecting, investigating, and seizing the profits from environmental crime, both the public and private sectors can work together to help protect our climate and prevent our economies from being corrupted by illicit funds. Finally, the report also highlights the importance and opportunities for further regulatory and policy work in this area and in that regard as a member of FATF, Ireland will continue to play an active role.
In addressing the issue of Environmental Crime, the financial sector can progress the biodiversity agenda, which is a major element of the UN Conference of the Parties (COP26) taking place in November this year. The G20 Finance Ministers and the Central Bank Governors have acknowledged the work of FATF in this area and have called for greater action in the future.
ENDS
Notes for Editors:
The Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard.
As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas. Ireland is a member of the FATF and is represented by a cross departmental/agency representation at its various meeting and lead by financial services officials from the Department of Finance in their policy coordination remit.
With more than 200 countries and jurisdictions committed to implementing them. The FATF has developed the FATF Recommendations, or FATF Standards, which ensure a coordinated global response to prevent organised crime, corruption and terrorism. They help authorities go after the money of criminals dealing in illegal drugs, human trafficking and other crimes. The FATF also works to stop funding for weapons of mass destruction.
The FATF reviews money laundering and terrorist financing techniques and continuously strengthens its standards to address new risks, such as the regulation of virtual assets, which have spread as cryptocurrencies gain popularity. The FATF monitors countries to ensure they implement the FATF Standards fully and effectively, and holds countries to account that do not comply. While not a statutory body FATF recommendation are highly influential in establishing international norms, and once issued member countries rarely deviate from their standards
Website; FATF-GAFI.ORG - Financial Action Task Force (FATF)