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Dirty Money and the Destruction of the Amazon: Uncovering the U.S. Role in Illicit Financial Flows from Environmental Crimes in Peru and Colombia

Environmental crimes, such as illegal mining and logging, are the third largest type of criminal activity in the world, yielding as much as $281 billion in proceeds every year. There is a pervasive perception that environmental crimes are “low-risk, high-reward” offenses. The Financial Action Task Force as well as experts in the U.S. and Latin America have asserted that there are serious legal, information sharing, and capacity challenges that make it difficult to investigate and prosecute these offenses. Financial secrecy – which environmental criminals use to obscure their identity, facilitate their operations, and launder the proceeds of crime – is no small part of that equation.

The United States, as the world’s largest economy and premier supplier of financial secrecy, has a crucial role to play in denying financial safe haven to criminals that would degrade the Amazon. The FACT Coalition’s 100-plus members, including prominent environmental organizations, advocate for policies to combat the harmful impacts of corrupt financial practices.

FACT’s new report draws on interviews with local and regional activists, indigenous leaders, anti-money laundering experts, and government officials in Peru, Colombia, and the United States to show how financial secrecy contributes to facilitating these crimes. The report lays out a comprehensive U.S. reform agenda.

Click here to read the report in Spanish.


The report prescribes the following recommendations to help safeguard the U.S. financial system and make the U.S. a more robust partner in enforcement, information sharing, and capacity building in the Peruvian and Colombian Amazon:

U.S. Administration

  • Implement the bipartisan Corporate Transparency Act (CTA) – which requires certain opaque U.S. entities to name their true, “beneficial” owner to a nonpublic database at the Financial Crimes Enforcement Network (FinCEN) – in a way that facilitates the use of that information by trusted foreign law enforcement partners for investigations.
  • Complete rules to establish anti-money laundering obligations for real estate professionals in the U.S. residential and commercial real estate markets.
  • Increase technical assistance to countries in the Amazon basin to boost their capacity to tackle transnational illicit financial flows from environmental crimes.
  • Enforce anti-money laundering laws to deter U.S. laundering of environmental crime proceeds.
  • Increase U.S. government diplomatic leadership in multilateral bodies, including the UN Convention Against Corruption (UNCAC) Conference of States Parties, to address the illicit financial flows derived from environmental crimes, including from the Amazon region. 

U.S. Congress

  • Support passage of the FOREST Act, which would add illegal deforestation as a specified unlawful activity – or “predicate offense” – to the U.S. money laundering criminal statute. 
  • Make all environmental crimes predicate offenses for money laundering.
  • Support passage of the ENABLERS Act, which would authorize the U.S. Treasury to require professionals that provide financial, company, trust, or third-party payment services for their clients to maintain risk-based anti-money laundering requirements as appropriate. 
  • Support passage of the United States Legal Gold and Mining Partnership Strategy Act, which would provide technical assistance to allow regional governments to use targeted sanctions on persons engaged in laundering of illicit gold assets and authorize $10 million for the State Department to pursue a strategy to curb illicit gold mining in the Western Hemisphere. 
  • Increase funding for Treasury’s Financial Crimes Enforcement Network, which is responsible for updating U.S. anti-money laundering rules. Congress should also consider a multiyear effort to increase FinCEN’s budget.

Authors: Sofia Gonzalez, Sophia Cole, and Ian Gary

Editors: Erica Hanichak, Zorka Milin, and Seamus Love

Interviewees: We would like to thank the following individuals that we interviewed for providing valuable information and background for this report. 

Peru

  • Julio Cusurichi, President of FENAMAD and Peruvian Shipibo-Conibo indigenous leader
  • César Ipenza, Professor at Universidad del Pacífico
  • Daniel Linares Ruesta, UIF-Peru
  • Diego Ulloa, UIF-Peru
  • Humberto Balbuena, Director of Politics and Environmental Governance at Conservación Amazónica
  • Rodrigo Arce Rojas, Environmental Conservation Expert
  • Victor Hugo Huaman Tarmeño, Director of the Directorate of Forestry and Wildlife Sanctioning Procedures, Government of Peru
  • Carlos Herz Sáenz, General Director of Bartolomé de las Casas Regional Study Center
  • Nelly Luna Amancio, Journalist and Co-Founder of Ojo Público
  • Carlos Monje Salgado, former Latin American Regional Director for the Natural Resource Governance Institute
  • Anonymous USAID official 

Colombia

  • Luis Eduardo Llinás Chica, Director of Colombia’s financial intelligence unit, Unidad de Información y Análisis Financiero (UIAF)
  • Claudia Jiménez, Executive Director of El Grupo de Diálogo sobre Minería en Colombia (GDIAM)
  • Esteban Martínez, Vice Executive Director GDIAM

Latin America Experts in the United States

  • Julia Yansura, Program Director for Latin America & the Caribbean, Global Financial Integrity  
  • Taylor Kennedy, Director of Organizational Impact for RESOLVE
  • 2 anonymous U.S. State Department officials  

Ecuador 

  • Juanita Olaya Garcia, Expert in Organizational Development, Governance, Sustainability, and Anti-Corruption

The FACT Coalition would also like to thank the following persons and organizations for their helpful review and comments: 

  • Ben Batros, Director of Legal Strategy for the Center for Climate Crime Analysis
  • Dalila Seoane, Program Director for the Center for Climate Crime Analysis
  • Susanne Breitkopf, Deputy Director, Forest Campaign for the Environmental Investigation Agency
  • Julia Yansura, Program Director for Latin America & the Caribbean at Global Financial Integrity  
  • Carlos Monje Salgado, former Latin American Regional Director for the Natural Resource Governance Institute
  • César Ipenza, Professor at the Universidad del Pacífico

The recommendations and views expressed in this report are strictly those of the FACT Coalition and do not necessarily reflect the views of our funders or those who provided review.