Financial Transparency Coalition

Towards Transparency: Making the Global Financial System Work for Development, the Financial Transparency Coalition 2013 Conference, will take place in Dar es Salaam on October 1-2. To join in the discussion, or ask questions of the panel, Tweet us using the #FTCDar2013 hashtag, or follow FTC on Twitter at @FinTrCo.

What do human trafficking, the arms trade, rhinoceros poaching, and illegal logging all have in common? All are revenue-generating industries perpetrated by transnational criminals, involving the movement of highly prized illicit goods. Our panel, Trade Crimes: Illicit Financial Flows from Wildlife to Weapons, will examine how money-laundering mechanisms, particular trade-based mechanisms, enable transnational criminals to move vast sums of money out of developing countries.

According to United to End Poaching, 668 rhinoceros have been illegally killed in 2012 alone, mostly in South Africa. The rate of rhinoceros poaching has exploded since 2007, when only 13 were killed. Why the rise? Demand for rhino horn out of Vietnam—where it is believed to cure disease—has driven the price of each rhino horn to stratospheric levels with estimates ranging from US$50,000 to US$300,000 per horn. Do the math, and you’ll find that up to $200 million in revenue was generated by the illicit rhinoceros trade alone in 2012. Poaching networks are showing increasing sophistication, including using helicopters, night vision scopes, and silencers in carrying out their crimes.

The problem extends far beyond the illicit wildlife trade. Notorious arms dealer Viktor Bout operated a massive illicit arms-trafficking network that extended across multiple continents. He used a global network of anonymous shell companies, including at least 12 incorporated in the United States, to facilitate his activities, fueling conflict around the world.

That kind of sophistication, and that level of revenue, would not be possible without the ability to quickly and easily move huge amounts of money between countries without being detected by law enforcement. Organized criminal networks are increasingly globalized, and operate on a massive scale. Without easy access to secrecy jurisdictions and phantom firms, they would not be able to maintain that scale, and their crimes could be curtailed.

On our panel, I hope to lead a vibrant discussion about how criminals move this kind of money, how that kind of movement enables crime, and what policies we can adopt to assist law enforcement and civil society in fighting them.