Amazon, a report reveals how profits from environmental crimes are laundered

A recent report analyzed 230 cases of environmental crimes committed in Amazonian countries over the last ten years, with the aim of understanding the methods and destinations of laundering the proceeds deriving from these illicit activities.The study was conducted by the FACT Coalition, an alliance of more than 100 organizations committed to fight against corrupt financial practices.In the report, the association reveals that the United States represents the most common foreign destination for the products and profits of eco-crimes committed in the Amazon region.The most widespread method for money laundering involves the use of shell and front companies, while corruption emerges as the most frequent collateral crime.

The report of FACT Coalition was published in late October, and was written by Julia Yansura, program director for environmental crime and illicit finance at the FACT Coalition.It analyzes open sources on 230 cases of environmental crime to better understand how they are committed, and how the profits associated with them are laundered.Recorded crimes include illegal logging, illegal mining, and wildlife trafficking, in most cases carried out with the help of shell company to cover up illegal activities.The countries mainly affected by the crimes are Colombia, Ecuador and Peru, but most of the products would arrive in the coffers of US companies.According to the study, in fact, 25% of total cases and 44% of cases where a parallel investigation was underway they had a foreign location as their destination.However, the numbers relating to foreign cases could be much higher, and the problem is precisely what Yansura calls "front companies".

The report counts a number of front companies equal to 76% of cases involved.The reason why US companies are involved in most cases is that “historically, to a large extent, US companies they were not asked to identify their true owners effective at the Treasury Department”.Another reason why the United States appears to have a central role in this network is that the country's real estate sector is exempt from many related rules to the fight against money laundering of money:“Networks of shell companies and foreign investors” therefore often end up purchasing “real estate in order to launder billions of dollars in profits generated by, among other things, environmental crime,” the report writes.In short, transnational criminal organizations use US companies to exploit federal regulations that guarantee the little transparency they need.Who is buying real estate and who exporting products, criminal groups use foreign laws to their advantage, so as to launder money and finance their illicit activities.

Paradoxically, one of the main problems that Yansura found in the research was the almost total absence of a parallel financial investigation, demonstrating how little is being done to combat this type of activity.Yet, environmental crimes “represent one of the illicit economies fastest growing in the world", as well as "one of the most profitable”.This is said not only by the FACT Coalition, but also by independent analyzes of theInterpol, who estimate that the rate of growth of such crimes is "2-3 times higher than that of the global economy", and would be worth a figure ranging "from 91 to 258 billion dollars”.However, according to Yansura, more can and must be done:according to the report, in fact, the failure to conduct parallel financial investigations would often lead to the mere "arrest and prosecution of low-level individuals who may themselves be victims, while those responsible remain free".

[by Dario Lucisano]