Banking on the wildlife trade

wildlife trade

COVID-19 has brought into glaring focus the link between animal-borne diseases and the health of humans. While questions remain over precisely how our relationship with animals may have triggered a global pandemic, answers are being sought in the shadowy trade of wild animals, some of it lawful, some not. Scientists suspect that wildlife trading has allowed COVID-19 to leap from bats to intermediate species to people. And with legal wildlife markets temporarily shut down in countries like China and Vietnam, the wildlife trade is being increasingly pushed underground.

The illegal wildlife trade (IWT) goes beyond market stalls – it’s organized transnational crime that involves criminal trafficking syndicates. And it’s flourishing due to high demand, ineffective law enforcement and a lack of financial surveillance. Wild animals are in demand not only as culinary indulgences and traditional medicine, but as exotic pets and status symbols. The effect is devastating, with thousands of species of wild animals being pushed to the brink of extinction as a result. The weakening of ecosystems and the threat to biodiversity, as well as the enormous mounting threat to human life, compounds what many have been saying for years: IWT is an offence commensurate to terrorism financing and drug, human, and weapons trafficking and thus should be fought using the same resources afforded these illegal activities. As with other illegal activities with enormous profits, a key tactic is to “follow the money.”

And that’s where the bankers come in.


Black markets worth billions


The United Nations estimates IWT to be worth upwards of US$23 billion a year. Cash is only one form of currency facilitating the operation of wildlife black markets. Much of the profit is laundered via legitimate banking channels and online payment platforms, which are increasingly being used as an underground means of buying and selling animals, particularly with many legal wildlife markets being shuttered. Hence, the financial sector has a crucial role to play in the mitigation of IWT. According to the Coalition for Private Investment in Conservation, IWT is the globe’s third-largest form of illegal trade after street drugs and weapons. A 2018 Interpol report, Global Wildlife Enforcement, states that the criminal kingpins involved in IWT are well organized and often involved in tax evasion, fraud, document falsification, money-laundering and firearms trafficking. IWT trafficking pipelines are commonly used to smuggle other illicit commodities, such as drugs and weapons, Interpol reports.

A key element making IWT as dangerous a crime as weapons trafficking is the link to pandemics like COVID-19, caused by the novel coronavirus SARS-CoV-2. COVID-19 is genetically similar to the SARS-related coronavirus (SARS is short for severe acute respiratory syndrome), which emerged in China in 2002/03, leaping, it’s suspected, from bats and wild Himalayan palm civets to humans, according to the World Health Organization (WHO). There are hundreds of coronaviruses circulating among animals, and seven are known to infect humans via a biological process called zoonosis, which is when viruses jump to another species, according to the National Institute of Allergy and Infectious Diseases in the United States. (Human encroachment into wild spaces, primarily because of agriculture, is another major factor facilitating zoonosis.)

Widespread theories suggested that ground zero for COVID-19 may have been the Huanan Seafood Wholesale Market in Wuhan, China, where domestic, wild and illegally trafficked animals were often kept in deplorably cramped cages – conditions that act as ideal disease vectors. A recent Chinese study published in the journal Nature suggests the market wasn’t so much ground zero for the virus, but an early “superspreader” or amplifier event among humans.

Regardless, research has found that COVID-19 likely originated in bats and then moved to humans via an intermediate species. Some researchers have suggested the missing link to be the scaly, ant-eating pangolin, which carries coronaviruses related to SARS-CoV-2. As the Wall Street Journal noted in late May, “It is possible that another animal was involved in some way, with the virus bouncing between a farmer and his animals, or a wildlife smuggler and his poor pangolins.”

Whether or not endangered pangolins are the missing link, they remain the most trafficked animals in the world – and they are emblematic of how human encroachment on threatened habitats and species is putting all of us at risk.





Illegal wildlife trade as a financial crime


Before the outbreak threw the wildlife trade into the spotlight, financial institutions had already begun collaborating to crack down on IWT. Last fall, the Financial Action Task Force (FATF), which is headquartered in Paris and positions itself as the globe’s money-laundering and terrorist-financing watchdog, announced that it would be making IWT a key priority under its current president, Xiangmin Liu of the People’s Bank of China. In June, FATF will provide governments and the financial industry practical guidance on combatting money laundering linked to IWT, FATF’s media relations manager, Duncan Crawford, stated in an email to Corporate Knights. With a top priority being the stop of the financial flows and laundering of the proceeds of IWT, the tools are intended “to disrupt, dismantle and deter the flows of illicit financing,” Crawford wrote.

TRAFFIC, a U.K.-based NGO that focuses on biodiversity conservation for wild plants and animals, was one of the founding members of another task force: the United for Wildlife Financial Taskforce, a bank-led group of more than 30 global financial institutions committed to combatting IWT that was founded in 2018. TRAFFIC is set to imminently publish case studies for enforcement agencies revealing the various techniques used by criminal networks to funnel and launder ill-gotten gains from IWT, TRAFFIC spokesperson Richard Thomas says. “It’s long been known that following the money is a very effective way to bring down criminal networks. Everything you do, every transaction, has a financial record,” Thomas says.


Financial tools to hunt suspicious transactions


One of the most effective but underused weapons in fighting IWT is financial investigation, according to the United Nations Office on Drugs and Crime and the Asia/Pacific Group on Money Laundering, which co-published a report in 2017, Enhancing the Detection, Investigation and Disruption of Illicit Financial Flows from Wildlife Crime. Among its many recommendations, the report states that financial asset forfeiture should be used as a deterrent by depriving perpetrators of ill-gotten gains from IWT. It also recommended that financial institutions develop better intelligence linkages to identify suspicious transactions. Extra due diligence must also be applied to legitimate businesses operating in sectors like trucking, the antique trade, traditional medicine, the fashion industry and wild animal breeding.

Legal breeding farms create enormous loopholes for IWT perpetrators, says Adam Peyman, the wildlife programs and operations manager for Humane Society International (HSI). “The legal wildlife trade acts as a cover for IWT, just as captive breeding farms act as a cover for laundering animals from the wild,” Peyman says. A huge loophole was created by China when it prohibited the sale and trade of non-aquatic wild animals for food but not medicine, fur or research, according to the Wildlife Conservation Society.



Online wildlife purchases on the rise


Another challenge to stopping IWT is that it’s being carried out via e-commerce. “Overall, there has been increased activity online by those who are trading in illegal wildlife,” says Ivonne Higuero, the secretary-general of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), from Geneva. She says CITES is developing a practical guideline to assist law enforcement authorities in combatting IWT internet crime.
Whether on the dark web or on social media platforms like Facebook and Instagram, as well as apps like WhatsApp, buyers can order and purchase vast arrays of illegal animal products: live amphibians, tropical fish, exotic birds, tiger cubs or baby primates, as well as products like pangolin scales, rhino horn or ivory, with a few clicks of a computer mouse. Much of the online demand comes from European collectors willing to pay upwards of $100,000 for a particularly rare specimen, says Higuero.

The Coalition to End Wildlife Trafficking Online has been working with private companies like Facebook, eBay, Instagram and Google, as well as such Chinese companies as internet conglomerate Tencent Holdings, which are having some success policing and regulating online IWT. In a meeting with Tencent executives last November in China, Higuero was told that the company had detected more than one million IWT listings. As a result, Tencent closed 6,000 accounts, 128 arrests were made, and US$2.8 million worth of IWT products were seized, says Higuero.
Altogether, companies involved with the coalition reported removing or blocking more than three million listings for endangered or threatened species and associated products from their platforms. While these initiatives may catch collectors, Higuero warns that they’re insufficient to nab caches of tonnes of pangolin scales being spirited across porous borders, facilitated by bribing customs agents at busy ports, as well as lax monitoring and policing.



Rhino Impact Bond for the win


Additional financial tools for combatting IWT are being developed by the Coalition for Private Investment in Conservation (CPIC), a global initiative supporting the increase of private, return-seeking investment in conservation projects, thanks to enormous investor demand. One successful example was last year’s $50 million Rhino Impact Bond — response from investors was “off the charts,” according to the Zoological Society of London, which initiated the bond with the support of the finance company Conservation Capital. CPIC has begun channelling more private funds into conservation efforts that specifically reduce IWT.

A CPIC spokesperson stated in an email to Corporate Knights that “there is a huge gap in the finance we need for environmental and biodiversity conservation,” estimating that more than US$400 billion would be needed every year to reverse decades of declining populations. The urgency in halting IWT couldn’t be more dire. A 2019 report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services predicts the extinction of one million animal and plant species in the next few decades.

Higuero says that enhanced financial diligence must be supported by harsher penalties. “Prosecution is, ultimately, the most important thing. That’s the only way that you’ll create disincentive.” TRAFFIC’s Thomas agrees, pointing out the minimal punishments currently meted out. One smuggler, Gilbert Khoo, convicted this year of smuggling more than £53 million of endangered live eels out of the U.K., received a two-year suspended sentence. Cases like this indicate to criminals that IWT is “a big return for a relatively small risk,” Thomas says.

Ultimately, says HSI’s Peyman, it’s crucial to change public perception of wildlife in the global community from things that are consumed to “something that should be conserved, protected and appreciated.” This, he says, will require a dedicated and determined international effort coordinating all aspects of government, as well as, crucially, the financial sector.


Roberta Staley is a Vancouver-based author, magazine editor and writer and filmmaker.



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