At the beginning of May, The Hill published an interesting article about how US financial regulations may be enabling environmental crimes:
“Environmental organized crime is a massive global enterprise, bringing in hundreds of billions of dollars each year – and the U.S. financial system appears to be helping conceal its profits. Interpol estimates that environmental crime such as poaching and illegal logging generates up to $281 billion a year, making it the third-most lucrative illegal business worldwide.”
As much as I question the use of AI, this seems like an area in which AI might actually be valuable – assuming the training data and algorithm are good. That may be a significant problem as relevant data may not be available, even in terms of information the government requires to register companies in the US:
“‘… we have all of these companies, we know very little about them, the government knows very little about them, and we don’t really know who owns them,’ [Julia Yansura, program director for environmental crime and illicit finance at the Financial Accountability and Corporate Transparency (FACT) Coalition] said. ‘That creates a huge loophole that financial criminals and environmental criminals have been exploiting.'”
The Financial Crimes Enforcement Network (FinCEN) under the Treasury Department is tasked with these types of matters. Last month, FinCEN reiterated their commitment to fighting “environmental crimes and associated illicit financial activity,” reminding financial institutions of their 2021 notice calling attention to environmental crimes and related financial activity. Among the resources cited in the 2021 notice is this report from the Financial Action Task Force (FATF) that gives examples, guidance and risk indicators for money laundering from environmental crimes. Even if you are not in financial services, it would be prudent to review those indicators as you may find them valuable for internal environmental/sustainability/ESG due diligence purposes.
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