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Poachers, corruption and dirty money

The illicit rhino horn trade maintains momentum through corruption, Guernsey’s new Economic Financial Crime Bureau to combat money laundering, USA’s tax authorities set sights on money laundering via Telegram app.

Napier AI
June 18, 2021

Corruption the dark underbelly of rhino poaching

The rhino crisis is escalating in South Africa. Allegations abound that poachers impersonate rangers, and government officials are taking bribes from kingpins. Enforcement outcomes are often paltry, with minor sentences handed to the ruthless criminals who are driving this endangered species to the brink of extinction.

The current pandemic slowed the rate at which poachers operate, with 30 percent fewer rhinos killed in 2021 compared to the previous year. However, as the world begins to open again, both the onslaught on rhinos and corruption inside courtrooms are on the rise once more.

One of Africa’s so-called ‘Big Five’, rhinos are killed for their horns, which are erroneously used for medicinal purposes in parts of Asia. Head of the environmental charity Saving the Wild Jamie Joseph told The Independent, “for the last decade, corruption has been driving rhinos into extinction, and it’s just getting worse. The kingpins call the shots; we run the intel, they get arrested, but then they always get bail and never go to jail.”

Ms Joseph alleges that kingpins were able to “rule” because of the “dirty officers and magistrates on their payroll.”

Read more on this story at The Independent.

The Economic Financial Crime Bureau will strengthen Guernsey’s anti-money laundering enforcement

The UK Committee for Home Affairs has created the financial crime law enforcement body to investigate money laundering and seize illegally obtained assets in the Crown Dependency. The regulatory body’s first director, Mr Kevin Davis, explains: “The creation of the EFCB was an opportunity identified by the Committee to strengthen Guernsey's approach to tackling financial crime, and deal with the threats and risks faced by Guernsey as an international financial centre.

The second largest of the Channel Islands, Guernsey has long been regarded as one of the world’s premier tax havens, offering incentives such as no VAT, a successful banking system and useful investment facilities. As such, it can potentially be a target for criminal organisations or individuals attempting to hide or launder illicitly obtained funds.

The EFCB will cooperate with other law enforcement bodies and reviews with the committee will be held regularly. Committee president, Deputy Rob Prouw, added that “having robust systems in place in Guernsey to tackle economic crime is crucial to maintaining the island's reputation on the international stage as a premier finance centre."

Read more on this story at the BBC.

USA’s Inland Revenue Service targets Bitcoin-related financial crimes which use Telegram app

The Cyber Crimes Unit of America’s Inland Revenue Service (IRS) has recently highlighted the Telegram instant messaging app as a problem for law enforcement officials. The Unit’s special agent Chris Janczewski explained that the app’s peer-to-peer feature, or P2P, potentially allows criminals to move illicit funds very rapidly, with cryptocurrencies being particularly attractive.

This follows last month’s new tax plan introduced by President Joe Biden’s administration, which will oblige businesses engaging in cryptocurrency transfers of $10,000 (£7,175) or more to report such transactions to the IRS. Additionally, the US Treasury recently stated that “cryptocurrency already poses a significant detection problem by facilitating illegal activity.”

Special Agent Janczewski added that the Telegram P2P feature is manipulated by dealers in countries with less stringent KYC controls, who incrementally launder dirty money into fiat currency-or vice versa- in small amounts over time. He cited a 2020 case involving two Chinese nationals, who allegedly laundered $250 million (£180 million) in cryptocurrency on behalf of the North Korean regime.

Ironically, Bitcoin is in fact relatively easy to track on the blockchain, as recently highlighted by The New York Times, so criminals dealing frequently in the cryptocurrency may get caught relatively quickly.

Read more on this story on Decrypt.

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