Deforestation and Conversion-linked Financial Crimes Toolkit

Please read full ITT document for information.

KEY OBJECTIVES

Interpol estimates illegal logging alone is worth approximately $152 billion a year, accounting for up to 90% of tropical deforestation in some countries. In the Amazon, recent studies have found that 94% of deforestation and habitat destruction in Brazil's Amazon and Cerrado could be illegal, and in Amazon countries like Colombia, Peru and Bolivia illegal enterprises and organised crime are behind one of the main drivers of deforestation: land grabbing. If viewed alongside more broad deforestation risks and environmental crime it is the 4th-largest organised crime after drugs, people and counterfeiting, costing billions annually. Financial crime is at the heart of it.

This project aims at developing a toolkit (the "Toolkit") to help Financial Institutions set up the tools and methodology to identify and monitor transactions potentially linked to financial crimes derived from deforestation or land conversation

WWF underlying objectives are:

Banks no longer consider credit and market risks as their sole major risks; as reputational, legal, and financial consequences of their compliance risks have increasingly gain relevance. US Financial Authorities such as Financial Crimes Enforcement Network (FinCEN) are taking crimes linked to deforestation seriously and therefore anticipate that the extraterritoriality of US laws could soon have overreaching impacts on financial institutions globally. In addition, the implementation of the EU Deforestation-free products regulation will require financial institutions to conduct due diligence checks to stop investments that cause deforestation within two years after the law comes into force. The UK may follow suite.

The Toolkit provides a way to mitigate those rising risks and therefore has vocation to:

Lot 1:

• Research and Data Collection:

Deliverable: Introductory Report

• Analysis:

Deliverable: draft Risk Assessment template and guidance

• Testing & validation:

Deliverable: validated Risk Assessment template and guidance

Lot 2:

• Website conception and development.

Deliverable: platform available online