This document summarizes a presentation given by RUSI on wildlife trafficking and illicit financial flows. It discusses how RUSI focuses on financial crime and environmental security issues. It then explores the scale and value of wildlife trafficking as the 4th largest illicit trade. While initially viewed as an environmental issue, wildlife trafficking is now seen as a national security threat when linked to organized crime and terrorism. The presentation argues that organized criminal groups are the main facilitators of wildlife trafficking in East Africa. It advocates for using financial investigation techniques and applying anti-money laundering laws to better address wildlife trafficking as a financial crime.

1. Wildlife Trafficking & Illicit Financial Flows:
The Role of Financial Investigation
8 November 2016

2. RUSI, finance and environmental crime
• RUSI: defence and security think-tank
• Range of security-related (not just military) programmes
• Financial crime (Tom Keatinge)
• Centre for Financial Crime & Security Studies
• Policy focus: UK, EU, FATF, etc
• Application of finance as security tool (CTF, HT, CPF)
• Partner with other RUSI programmes to bring ‘financial
angle’
• Environmental crime (Cathy Haenlein)
• IWT and IUU

3. Topics for discussion
• Wildlife trafficking: setting the scene
• Wildlife trafficking as terrorist financing?
• Wildlife trafficking as illicit trade and AML
predicate offence

4. Setting the scene
• Poaching v’s trafficking
• Conservation v’s security
• Wildlife crime v’s financial crime
• Agent v’s principle
IWT is illicit trade and predicate AML offence

5. Quantifying environmental trafficking
• Narrow definitions: $7-23bn
(2014, UNEP, INTERPOL)
• Wider definitions: $70-213bn
(14), $91-258bn (16), +5-7%
• 4th largest illicit activity (after
drugs, human trafficking,
counterfeiting)
• Wide uncertainty range,
variation in estimates,
inconsistent data collection,
variation in seizure record,
volatility in prices

6. The pricing incentive: ivory as an example

7. The supply chain: ivory

8. The supply chain: rhino horn

9. IWT value chain

10. Wildlife trafficking as a security threat
• Not traditionally viewed as a security threat:
environmental security literature, conflict resource
literature
• View of wildlife trafficking as a conservation, regulation
issue
• Recent change this decade – rise of 3 narratives:
• Poaching, wildlife trafficking and terrorism
• Poaching, wildlife trafficking and organised crime
• Poaching, wildlife trafficking and human security

11. Wildlife trafficking and terrorism
• Are terrorist groups earning significant revenues from
illegal ivory trade?
• Al-Shabaab, LRA, Janjaweed
• The narrative is strong
• Research and conservation NGO campaigns/reports
• Media (Western and East African)
• High-level political statements
• Main assertions related to Al-Shabaab
• Involved directly in poaching
• Plays a major role in ivory trafficking

12. Wildlife trafficking and terrorism (cont’d)

13. Wildlife trafficking and terrorism (cont’d)
• Hillary & Chelsea Clinton (2014):
• ‘We have seen al-Shabaab from Somalia, the Janjaweed
from Sudan, the Lord’s Resistance Army in east Africa
and other armed groups move into illegal wildlife
trafficking. It has become a multibillion-dollar business…’
• Uhuru Kenyatta (2014):
• ‘The money gained from the callous business [elephant
poaching] is usually directed into funding terrorism’
• Uhuru Kenyatta (2014):
• ‘The war against poaching should be treated as a double-
edged sword, which decimates two evils at once’

14. Why has the narrative been propagated?
• No one likes poachers or terrorists – combining the two
makes a good story
• ‘Softer’ way for the Western security community to
frame increased CT intervention in Africa
• For NGOs and private security firms: a way to tap into
CT funding from Western governments (over
conservation or counter-organised crime funding)
• For Kenyan citizens, security forces and ministers, it
continues a long-standing process of externalising and
politicising Kenya’s security problems, in particular
blaming Somalia

15. ‘An Illusion of Complicity’
• Exaggerated benefit
• At most small-scale, ad hoc,
opportunistic and indirect
involvement
• Conflation of Somali poachers with
Al-Shabaab – trend of blaming
Somalis
• Few herds within easy striking
distance of Al-Shabaab
• Majority of poachers come from
communities in major ranges
• Most East African poaching has
occurred in Tanzania

16. IWT as financial/organised crime
• The role of organised crime and corruption at all levels
of the chain is far more pervasive
• Booming demand and prices – emergence of
transnational, industrial-scale and organised operations
• Growing evidence of OCG involvement. In East Africa,
accepted that OCGs/corrupt officials are main
facilitators

17. IWT as financial/organised crime (cont’d)
• Huge scale/complexity, clear indicators of OC
involvement, enabled by high and low-level corruption
• This is evident by the difficulties involved in:
• consolidating the hundreds of tusks necessary to
make up the large volumes involved;
• moving them across multiple borders along complex
supply chain (air/land/sea routes)
• and avoiding interdiction at each stage of these
chains

18. IWT as financial/organised crime (cont’d)
• Growing % of ivory seized in ‘large’ shipments of
>500kg – CITES determinant of OC facilitation
• CITES data: frequency of seizures has increased this
decade. Prior to 2009, an average 5 such events
occurred annually; 2009-13 rose to an average of 15
• 2012-14, such seizures accounted for 61% of all ivory
confiscated worldwide

19. Tackling IWT as a financial crime
• RUSI HMG-funded project investigating illicit financial
flows related to IWT in Kenya, Tanzania, Uganda
• Desk-top research; phone and field interviews
• Private sector; local law enforcement; FIUs; anti-
corruption offices; ODPP; NGOs; multi-lateral
organisations
• Next phase: in-country training for public/private
sector

20. IWT: illicit trade, linked to OC and corruption
Yang Fenglan: Chinese national, 70 tusks,
1.9 tonnes, US$1.4 million, in court
Feisal Mohamed Ali, Kenyan national, 2
tonnes, jailed for 20 years – big success.

21. IWT: response must be shaped accordingly
• Countries have made progress tackling ‘wildlife crime’
• Reduced poaching of rhino/ elephant (eg 80% in Kenya)
• New laws (cf Kenyan Wildlife Conservation & Management
Act, 2013)
• But…
• More ivory shipped through Mombasa than any other African
trade route
• Financial investigation techniques underused
• Network analysis not exploited
• Link between IWT and AML/financial crime not exploited
• Rare use of financial evidence in court
• Who pays bail and fines?

22. Considering responses
• Champion financial investigation
• Apply financial crime legislation
Public Sector
Capacity Building
• IWT spans the globe; so do financial institutions
• Support training for correspondent banks
• Develop awareness in transport/logistics
industry
Private Sector
Involvement
• Raise IWT profile in appropriate for a addressing
financial crime and illicit trade, e.g. FATF/OECD
• Industry efforts; cf Royal Foundation logistics
initiative
International
Support

23. Thank you and questions…?
• Tom Keatinge, Director
• RUSI Centre for Financial Crime & Security Studies
• Tel: +44 7785 363 259
• Email: tomk@rusi.org
• Cathy Haenlein, Research Fellow
• Environmental Crime Research
• Tel: +44 7762 718 992
• Email: cathyh@rusi.org