Chinese banks must take action to prevent illegal wildlife traffickers from exploiting their networks to launder money according to new guidance from TRAFFIC, an NGO that works globally on trade in wild animals and plants.
The guidance calls on Chinese banks to take steps to ensure that their networks cannot be used for money laundering by the traffickers and provides banks with five recommended actions.
Making the case
Banks should integrate commitments to zero tolerance of the illegal wildlife trade into their systems and processes for managing anti-money laundering and corruption, and into their corporate social responsibility strategies according to the guidance.
It says the case for Chinese banks to pay attention to the illegal wildlife trade is clear. Not only are Chinese banks exposed but the illegal wildlife trade is also a priority for the Chinese government and international authorities concerned about money laundering and corruption.
Taking action is increasingly seen as an integral part of the regulatory obligations on banks according to the new guidance.
The guidance recommends banks take action in five ways. They should make a formal, public commitment to zero tolerance of the illegal wildlife trade that applies to the bank and its stakeholders and report publicly on a regular basis on how they have implemented their zero-tolerance commitments.
Banks should also establish the systems and processes necessary to deliver these zero-tolerance commitments, such as increasing board and executive oversight, providing staff training and adopting clear procedures and processes to monitor exposure to the illegal wildlife trade.
Collaboration, KYC and KYB
Banks should collaborate with other banks and with other stakeholders to build capacity and understanding of the illegal wildlife trade within the banking and finance sectors.
They should also ensure that their know-your-customer (KYC) and know-your-business (KYB) processes pay attention to the potential for customers and businesses to be involved in the illegal wildlife trade.
TRAFFIC’s guidance, The illegal wildlife trade and the banking sector in China: the need for a zero tolerance approach, can be found here.
Categories: Trade Based Financial crimes News