Financial institutions key to identifying environmental crimes related to money laundering

The Financial Crimes Enforcement Network has issued a notice calling attention to an upward trend in environmental crimes and associated illicit financial activity.

Financial institutions’ SAR fillings, in conjunction with effective implementation of their BSA compliance requirements, are crucial to identifying and stopping environmental crimes and related money laundering, according to FinCEN.

Global environmental crimes are estimated to generate hundreds of billions in illicit proceeds annually and now rank as the third largest illicit activity in the world following the trafficking of drugs and counterfeit goods, the notice stated. Environmental crimes encompass illegal activity that harm human health, and harm nature and natural resources by damaging environmental quality, including increasing carbon dioxide levels in the atmosphere, driving biodiversity loss and causing the overexploitation of natural resources.

The notice states that FinCEN is highlighting this trend because of:

  • its strong association with corruption and transnational criminal organizations, two of its national anti-money laundering and countering the financing of terrorism priorities;
  • a need to enhance reporting and analysis of related illicit financial flows; and
  • environmental crimes’ contribution to the climate crisis, including threatening ecosystems, decreasing biodiversity, and increasing carbon dioxide in the atmosphere.

More information about environmental crimes and suspicious activity report filing instructions can be accessed on the FinCEN website.

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