FinCEN flags environmental crime as reportable activity under BSA

The importance of including the reporting of known or suspected environmental crime as part of a financial institution’s compliance with the Bank Secrecy Act (BSA) was highlighted Thursday in a notice by Treasury’s Financial Crimes Enforcement Network (FinCEN).

The notice points to five specific types of environmental crime: wildlife trafficking, illegal logging, illegal fishing, illegal mining, and waste and hazardous substances trafficking. Instructions for reporting such activity on a suspicious activity report (SAR) are provided.

FinCEN, in its notice, pointed to an upward trend in environmental crimes and associated illicit financial activity. It said it was highlighting the trend because of:

  • its strong association with corruption and transnational criminal organizations, two of FinCEN’s national anti-money laundering and countering the financing of terrorism (AML/CFT, or anti-money laundering/countering the financing of terrorism) priorities;
  • a need to enhance reporting and analysis of related illicit financial flows; and
  • environmental crimes’ contribution to the climate crisis, including threatening ecosystems, decreasing biodiversity, and increasing carbon dioxide in the atmosphere.

FinCEN also said institutions may consider using the authority provided under Bank Secrecy Act’s (BSA) section 314(b), which gives a safe harbor from liability for certain information sharing undertaken voluntarily to better identify and report activities that may involve money laundering or terrorist activities. A footnote in Thursday’s notice states this safe harbor “may apply in certain situations to the sharing of cyber-related information, such as IP addresses.”

FinCEN Calls Attention to Environmental Crimes and Related Financial Activity