Misinvoicing amongst TBML typologies used to cover up environmental crime

Allowing environmental, conservation, and anti-corruption organisations to access export invoices and trade data to identify misinvoicing could help curb environmental crime, including illegal mining, logging, fishing, and wildlife trafficking, according to a virtual convention on environmental crime related illicit financial flows.

Transparent beneficial ownership information, legislation to prevent professional service providers facilitating money laundering and corruption as well as stronger collaboration between stakeholders involved in curbing environmental crimes could also help, the convention which focused on the US’ role in this type of crime concluded.

TBML focus

Trade-based money laundering (TBML) was one focus of the convention organised by the Financial Accountability and Corporate Transparency (FACT) Coalition.

Participants argued that in the US, lawmakers should follow through with overdue revisions to money laundering regulations –both through existing rulemakings and pending legislation – while also contemplating new policies.

Public access

In source and transit jurisdictions, export misinvoicing is amongst a range of TBML typologies used to flout both export limitations on protected commodities and the taxes that should be collected from their sale.

Public access to export invoices and other trade data is one measure that could foster collaboration with international civil society and law enforcement to track and trap international criminal networks involved in environmental crimes.

Gatekeepers’ role

In destination countries, corrupt gatekeepers – professionals such as lawyers, precious metal dealers, real estate agents, and company formation agents who hold keys to the financial system – play a crucial role in moving products to market and laundering profits.

One of the convention’s recommendations is that the US should enlist financial professionals in the fight against illicit flows by passing gatekeepers legislation such as the Enablers Act, which requires professional service providers acting as gatekeepers to the US financial system to adopt a more rigorous approach to anti-money laundering procedures.

Opaque corporate structures

The convention also focused on environmental criminals who shift illicit profits and hide their business through incredibly complex corporate structures. Participants agreed that the Biden administration should implement the Corporate Transparency Act, which would ban the use of anonymous US shell companies.

The administration should also move forward with rules and regulations to protect US real estate and private investment markets the convention concluded.

The full synopsis of the virtual convention on environmental crime related illicit financial flows can be found here.


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