On November 18, 2021, the Financial Crimes Enforcement Network (FinCEN) issued a Notice “to call attention to an upward trend in environmental crimes and associated illicit financial activity.” This focus on environmental crimes is designed to help address FinCEN’s priorities previously announced on June 30, 2021. FinCEN also noted that this focus aligns with priorities of other countries around the world, including the United Nations, and the G7 and G20. The Notice creates new guidelines for financial institutions to follow when filing a Suspicious Activity Report (SAR). SARs have long been an important tool for detecting a wide variety of financial crimes including money laundering. But the type of reportable red flags has now been significantly broadened. For example, financial institutions filing a SAR must detail if the suspicious activity relates to environmental crimes, including by providing “any available details concerning how the illicit product, plant, or waste was solicited, acquired, stored, transported, financed, and paid for.” As FinCEN points out in the Notice: “Environmental crimes encompass illegal activity that harm human health, and harm nature and natural resources by damaging environmental quality, including increasing carbon dioxide levels in the atmosphere, driving biodiversity loss, and causing the overexploitation of natural resources. This category of crimes includes (i) wildlife trafficking, (ii) illegal logging, (iii) illegal fishing, (iv) illegal mining, and (v) waste and hazardous substances trafficking”.
For more detailed information, the Notice may be found at: https://www.fincen.gov/sites/default/files/2021-11/FinCEN%20Environmental%20Crimes%20Notice%20508%20FINAL.pdf
As a prelude to the issuance of the Notice, FinCEN held a virtual exchange “focused on identifying and combatting illicit financial flows associated with environmental crimes and related money laundering.”