On January 19, 2022, the Royal United Services Institute for Defense and Security Studies( RUSI) published the Whitehall Report on Illegal Wildlife Trade and Illicit Finance in the UK. It is s the first independent study to address the UK’s exposure and response to IWT-linked illicit finance.
According to the report, the UK is a leading advocate of the need to ‘follow the money’ linked to illegal wildlife trade (IWT) on the international stage. Nevertheless, the UK has not focused on examining its own domestic record in this area.
The report uses an open-source literature review, analysis of government enforcement data, a focused ‘call for evidence’ and 40 semi-structured interviews. The report assesses the UK’s record in relation to the Financial Action Task Force’s (FATF) 2020 call for action in three specific areas: (1) facilitating action by affected countries to assess their exposure to IWT-linked illicit finance; (2) ensuring legal powers exist to bring financial charges in relation to IWT offending; and (3) engaging in greater numbers of parallel financial investigations in IWT cases.
Authored by Alexandria Reid, Research Fellow in Organized Crime and Policy and Cathy Haenlein, Director, Organized Crime and Policing, the report finds that the UK is currently failing to properly assess its role in laundering the proceeds of IWT. The UK has clear processes to determine national wildlife crime priorities. But it lacks an IWT-specific threat assessment or accurate understanding of the scope of IWT-related proceeds laundered in the UK. In that regard, inadequate attention exists to distinguish the movement of IWT products from proceeds. Proceeds may involve the UK, as a global financial center, independent of domestic movements of physical goods. As a result of these gaps, no reliable method exists to quantify the threat, allocate resources or furnish guidance to law enforcement and the private sector. The UK requires an official, national IWT assessment to implement the risk-based approach FATF recommends.
The UK has strong laws and authorities to prosecute IWT offenses and associated economic crime. In particular, together the Proceeds of Crime Act 2002, the Criminal Finances Act 2017 and the Sanctions and Anti-Money Laundering Act 2018, among others, provide ample authority. A problem is that these powers are not applied in all relevant IWT cases. Various NGOs have criticized the low level of cases resulting in prosecutions or deterrent sentences. Research shows that courts primarily give offenders financial penalties, followed by suspended sentences. The UK actively supports strict legislation and sentencing guidelines abroad. However, the UK does not treat IWT with the same strictness at home.
Enforcement and Parallel Financial Investigations
With respect to enforcement and parallel financial investigations, the report finds that suspicious activity reports (SARs) are virtually unused as a source of intelligence in IWT cases in the UK. Few SARs exist where IWT is identified as the predicate offenses and low numbers of financial investigations are initiated. Law enforcement underuses asset confiscation authorities and small amounts are recovered. For instance, in 2020 law enforcement recovered only £2,455 from IWT cases. The Home Office has promised resourcing to develop financial investigation capacity in the UK National Wildlife Crime Unit. However, the unit ultimately depends on frontline law enforcement agencies to lead investigations. Without the high-quality threat assessment required for forces to justify a focus on IWT, it will continue to grapple to ensure that cases are brought.
The report makes recommendations to address the gap between the UK’s support for financial action against IWT abroad and its record at home. They include the need to conduct an official national IWT threat assessment to incentivizing the application of financial investigation powers and strengthening public-private sector cooperation. Importantly, the report also recommends a detailed evaluation of sentencing, reviews of investigations that fail to result in appropriate charges, and improved collection of criminal justice statistics on IWT cases.
The current issue of the IELR will have a more comprehensive discussion of the report.