As of last year, The FATF (Financial Action Task Force) made International Wildlife Trafficking (IWT) one of their priority issues to tackle. This industry is the 4th largest international crime and has arguably the most devastating environmental impact out of any criminal act or proceed. To achieve this status, many factors are to be considered collectively.
Below are a few examples of those factors that contribute to this industry having those adverse titles:
- Critical endangerment of many species, including the Black Rhino and Sumatran Elephant.
- The UN states the industry generates up to $23 Billion a year through illegal trades.
- Killings of innocent park/reserve rangers in an attempt to continue poaching.
- Fourth largest international crime – behind Drug Crime, Human Trafficking and Counterfeiting.
- Threatens many economies, a country may heavily rely on wildlife tourism for example.
As time passes these factors are only going to worsen unless the correct prevention measures are implemented. There has been a demand established for this illegal trade, with poachers and traders knowing no bounds to not only achieve this demand but also exceeded it in the coming years, due to the increase of lucrativeness as all species become rarer as well as ensuring their families a source of income to survive.
To begin prevention and mitigation of IWT from a financial services point of view, it is essential to limit this activity and target the financial gains made by criminals in an attempt to deter and prevent continuous criminal acts. One of the most efficient techniques to achieve this is through assessing the activity of the crime within certain jurisdictions. This allows for specific targeting rules to be applied, which can be done through evaluating several different aspects for each country, which can include:
- The recorded activity statistics within a targeted jurisdiction (poaching/derived criminal proceeds).
- What prevention and pursuit measures are enforced.
- The current species endangerment levels.
- Population in comparison to the recorded activity.
The process of utilising and managing various attributes, such as described above, for every country collectively can be a difficult task. The SQA Country Risk Index (CRI) combines numerous factors to calculate a risk for all International Organisation for Standardisation (ISO) recognised countries. The CRI collates and manipulates many attributes to output a risk rating, which can then be applied to a risk-based approach business model.
The CRI is not only limited to IWT but also accounts for a variety of other areas of interest for any AML (Anti-Money Laundering) associated interests, which include the following key categories:
- AML Maturity
- Transparency, Bribery and Corruption
- Nuclear Proliferation
- Human Trafficking
- Arms trafficking
- Narcotics Proliferation
- Sanctions Sensitivity
- Terrorism Density
- Terrorism Counts
- Governance and Political Stability
- User Knowledge
For further information about these categories and managing country risk, Contact us SQA Consulting about our Country Risk Index