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Money-laundering through illegal fishing
Julian Dixon
April 8, 2021

For ten long years, a fishing vessel called the Andrey Dolgov roamed the world’s oceans, illegally plundering millions of fish. By the time it was finally captured in April 2018 – after a high-speed ambush by the Indonesian navy in the Andaman Sea – authorities estimated it had looted US$50 million (£38 million) of fish from the Pacific, Indian and Southern Oceans.  

The Russian captain was sentenced to four months in prison, while the officers were deported. It turned out the rest of the crew, mainly Indonesians, had been forced into working on board. Interpol has since linked the vessel to organised crime in Russia.    

Over the years, in order to confuse authorities and elude both national and international regulations, the Andrey Dolgov had operated under a variety of names and national flags. At various times it had been known as Sea Breez 1, AYDA or F/V STS-50. Among the flags it flew were those of Cambodia, Togo, Nigeria and Bolivia.  

In the sometimes shady world of commercial fishing, this is a common deception. So convoluted are the laws and treaties of the oceans, that few nations have the energy, funds or jurisdiction to pursue these rogue vessels. In any case, once they catch them, they are then obliged to secure the vessel and look after the crew. It’s often cheaper and easier to turn a blind eye.

Growth of illegal fish trade

Ian Urbina is author of The Outlaw Ocean: Crime And Survival In The Last Untamed Frontier. As he explains: “The rule of law – often so solid on land, bolstered and clarified by centuries of careful wordsmithing, hard-fought jurisdictional lines, and robust enforcement regimes – is fluid at sea, if it’s to be found at all.”

Urbina points out how the illicit seafood trade is a thriving global business that generates an estimated $160 billion in annual sales. “The trade in illegal fish has grown over the past decade,” he writes, “as improved technology – stronger radar, bigger nets, faster ships – has enabled fishing vessels to plunder the oceans with remarkable efficiency.”

However, the criminal activity extends far deeper than just illegal fishing. As Interpol explain in their short film Fisheries Crime: “Illegal fishing is just the tip of the iceberg. What you don't see are the other associated crimes: money laundering, tax evasion, labour exploitation, identity fraud – all supported by corruption. Some of these criminal groups will use fishing activities as a cover while using vessels to commit other crimes like people, drugs, and firearms trafficking. Environmental crime is a crime that impacts on all of us.”

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Interpol research on money laundering in fishing  

In 2018 Interpol published a report entitled International Law Enforcement Cooperation in the Fisheries Sector: A Guide for Law Enforcement Practitioners. In it they stress the need for international cooperation in combating illegal fishing and its associated crimes.

“These crimes have been identified by Interpol and its partners as transnational in nature and involving organised criminal networks,” says Paul Stanfield, Interpol’s director of organized and emerging crime. “Given the complexity of these crimes and the fact that they occur across the supply chains of several countries, international police cooperation and coordination between countries and agencies is absolutely essential.”  

In their report, Interpol explain how money laundering within the industry takes various forms. “The proceeds of crime may be siphoned into the fishing industry supply chain at many stages. During the preparation phase, offenders can invest illicit funds in new infrastructure, including fishing gear, fish processing facilities or transportation. Illicit funds can also be laundered during the sale of fish at port or by paying crew members in cash.”

When it comes to money laundering, Interpol point the finger of blame primarily at the corporate entities that own the illegal fishing vessels. Often, criminals will create shell companies to disguise their nefarious activities. “The corporate structure behind illegal fishing activities is complex,” they explain. “It often entails an opaque company structure where the legal owner is not the beneficial [or true] owner.”  

Interpol also highlight the role of certain corrupt administrators and government officials within the industry who help criminals falsify documents, for example: “It is not just fishing vessel captains and owners who are responsible for present-day fisheries crime. It is largely down to business executives, public officials, lawyers, accountants and other white-collar professionals.”

Responsibility for financial crime in fishing

One key expert in the field of environmental crime is Mark Nuttall, from risk management company Hill & Associates. A former detective in the Metropolitan Police in London, he used to work at Interpol on their Organized and Emerging Crime Directorate.  

He points out how companies working within or close to the fishing industry have a duty to keep an eye out for money-laundering activity. Some criminals, he says, pose as legitimate shipping agents by setting up shell companies, in order to make financial transactions more difficult to trace. “Agents will choose offshore jurisdictions which are more secretive, and which have been created to limit taxation,” he explains. And he warns of the need to be wary of suspicious paperwork, cash payments or inconsistent business activity.  

Nuttall says it’s easy for us, in our comfortable Western homes, to wag our fingers at illegal fishing vessels, far out on the high seas. Ultimately, though, it’s also us – the consumers – who benefit from this illegal trade. “Where does the education need to take place? In the country that holds the final consumer product,” he adds.

In any case, how can we possibly know for sure if the fish we are eating on our plate is a result of legal or illegal fishing? “You’re not going to understand what the fishing targets are for an individual vessel in the Atlantic Ocean, for example, and then assign that to your plate of fish and chips,” he says.

Radical solution to illegal fishing

Some environmentalists suggest even more radical approaches. In March 2021 a new documentary called Seaspiracy was released, shining a spotlight on the environmental and social damage inflicted by the global fishing industry. At the conclusion of the film, wildlife activist George Monbiot stresses that this damage can be reversed.  

“But it can only happen if very large areas of sea are closed to commercial fishing,” he says. “And while governments are not prepared to take action, and while the industry is basically unregulated, the only ethical thing to do is to stop eating fish.”

This solution won't be palatable to everyone, of course.  

In the meantime, one way to curb illegal money laundering stemming from the fishing industry is to understand what criminal typologies are, actively look for these behavioural patterns, exercise customer due diligence – especially focusing on UBO’s and shell companies, and to continually screen your clients.  

This is where modern technology can help.  

Find out how our Intelligent Compliance platform can help transform your AML processes

By contacting one of our experts or requesting a demo to see it in action.  

Julian has more than 20 years of financial services experience gained at major investment banks including Deutsche Bank, JP Morgan and Commerzbank. His roles have ranged from front-office sales leadership to private equity. Julian has extensive knowledge of financial services processes and technology.