Anti-money laundering rules of limited use in tackling illegal logging

15 November 2015

Illegally-logged wood accounts for up to 30 per cent of international trade in timber. Revenues from timber crime likely run into billions of euros each year. Against this background, Fern carried out major research to find out if tougher enforcement of anti-money laundering rules would be a useful lever to help preserve the world’s forests.

Sadly, in its report, “Stashing the cash”, Fern came to the view that, while action on money laundering could play a significant role in tackling timber crime, some important practical obstacles remain.

Fern found that the organisations most countries have set up to monitor money laundering – Financial Intelligence Units (FIUs) – are already overwhelmed with reports of suspicious transactions, and inevitably focus scarce resources on what are seen as priority areas, such as money flows associated with drug dealing and organised crime, over illegal logging. 

Fern assessed the value of lobbying for changes to the EU’s Anti-Money Laundering Directive and concluded that making illegal logging a specifically mentioned offence would probably neither alter the way banks investigate timber transactions nor lead to more logging-related money-laundering prosecutions in European courts.

See the full report here.

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