Green Crime and Anti Money Laundering

The sectors that should deal with financial crimes are not only financial sectors such as banking and investment. At the same time, criminals commit financial crime through environmental crime and wildlife trafficking. Besides these, Green Crime is linked to crimes such as money laundering, corruption, and smuggling.


What Is The Green Crime?


Green Crime wildlife crime is an illegal global environmental crime. One of the most lucrative illegal activities, green crime usually involves the environment, biodiversity, or natural resources. This causes more crimes to be committed in this area. There are major environmental crimes such as green crime, for example, illegal mining, fishing, wildlife trade, logging, and generate pollution. The increasing growth rate of crimes causes serious environmental consequences. The resources provided by the United Nations Environment Program in 2016 also include an estimated Green Crime of between $ 91 billion and $ 258 billion. Due to this profitability rate, criminals operate in this sector.


On the other side, there is a crucial point is that should be considered, Green Crime is estimated to grow 5-7% each year, which causes serious problems in the global economy. Financial institutions and regulators try to focus on this crime and find solutions. Due to the complexity of these crimes, they are requested to be recognized by international financial crime communities.


Increased Threats with Green Crime


It can cause extensive and permanent damage, such as Green Crime. Therefore, there are serious threats to nature. Unexpected climate change and the disappearance of wildlife species threaten future generations. Examples of Green Crime are illegal logging, which in the timber industry can speed up the destruction of forests, which can lead to climate change and adverse effects on forest ecosystems. Jobs such as illegal lumber business organized crime are coordinated by the criminal networks of harvesting, shipping, and trading of these jobs. As a result, money laundering activities take place to convert income from this illegal activity into legal money.


Another striking example is that for green crime threats illegal fish hunting. Some fish species are being exhausted due to illegal fishing, fishing according to standards can seriously disrupt the balance of nature. The income from these crimes adversely affects the economy, but besides, these crimes also cause incredible harm to nature. These threats are growing, as penalties and fines related to Green Crime offenses are generally significantly lower than other money laundering and financing of terrorism.


Red AML Flags in Green Crime


Financial institutions have a hard time distinguishing them when examining green crimes. Because it is not easy to distinguish whether this crime is legal or not. Criminals know the ways to legitimize their work, laundering the money they obtain, making them look like legal income, and preventing them from being noticed by complicating this process. A timber business can take a certain legal area and then cut more trees from where it bought, making it look like it is legal. Criminals can set up a shell company for shipping jobs here, with shell companies they are trying to legalize the business.


In this way, criminals can carry illegal wildlife products while concealing useful property and dealing in many jurisdictions. All of these situations are red flags for businesses. For this reason, organizations that do business with individuals or legal entities operating in environmental areas should implement KYC measures, perform necessary due diligence and transaction monitoring. Financial institutions should also review the payment methods of transactions.


Regulations in Green Crime


International and local regulators are aware of the risks posed by green water and are taking measures for this. For example, the Money Laundering and The Illegal Wildlife Trade report published by the Financial Action Task Force (FATF) are some of the measures taken for environmental crimes, as well as new measures for Green Crime in the European Union's 6th Anti Money Laundering Directive (6AMLD). Despite these measures, fines and sanctions for Green Crime activities are few and inadequate. There should be increased cooperation and effective cooperation in the public and private sectors to reduce Green Crime threats. For this, institutions such as big companies, regulators, and politicians should come together. Green Crime does not only have negative effects on financial institutions but also serious environmental effects and these negative effects pose a threat to humanity.


Technology Solution for Green Crime


The risks posed by green crime may be noticed, such as the realization and elimination of the risks posed by financial crimes such as drugs and smuggling. The important thing is to follow the money in the crime supply chain, software compatible with the latest technologies and the money obtained from these crimes can be monitored. There are industries that facilitate green crime without knowing it, and these industries should strengthen their approach to detecting such activities. Financial institutions may fail to scan the third parties they do business with and evaluate their risks. The shortcomings of these scans have undesirable consequences, such as money laundering and terrorist financing.


These risks can be identified and measures can be taken with Customer Due Diligence or Enhanced Due Diligence procedures that comply with partners and employees in third-party relationships at businesses. At the same time, it can be learned whether there is a financial crime before these people who have Adverse Media Screening. All these transactions ensure that financial crimes in companies are noticed and measures are taken. At the same time, transactions with Transaction Monitoring Software can be instantly screening and warned so that financial crimes can be recognized. As a result, Green Crime can be prevented in this way, and the prevented green crimes and financial institutions can not only face regulatory penalties but also prevent serious environmental crimes committed.








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