“There is a strong case to believe that, today, the best place to hide and launder ill-gotten gains is, in fact, the United States,” US Treasury Secretary Janet Yellen admitted in 2021. A recent report found that in the case of environmental crimes committed in the Amazon, a large part of the economic flows and profits obtained from these crimes end up entering very easily to be laundered in the largest economy in the world.
Environmental crimes are the third most important type of illicit activity on the planet: according to Interpol, they generate revenues of up to 281 billion dollars. In the Amazon, activities such as illegal logging, illegal gold mining and the wildlife trade generate billions of dollars, according to a report by the Coalition for Financial Accountability and Corporate Transparency in the United States (FACT). for its acronym in English), ends up being laundered through anonymous companies and the real estate sector of the North American country.
“With this report, FACT, on behalf of its more than 100 members, including various environmental and conservation organizations, joins experts and advocates who are focusing on other important dimensions to combat the climate crisis and the rampant destruction of the environment. We present examples of environmental crimes in the Amazon—and, in some cases, their link to illicit financial flows to the United States.— with the aim of starting a conversation about the role that US financial transparency reforms should play in the broader climate and environmental justice movements,” says Ian Gary, executive director of FACT.
For her part, explains Julia Yansura, director of programs for Latin America and the Caribbean at Global Financial Integrity, an organization that is part of FACT, there are still very large obstacles that limit the possibility of identifying companies and people that launder money from of the Amazon in the United States. This is thanks to corporations and the laxity of the real estate sector in the United States that allows asset transactions to be made without asking any questions.
“Unfortunately The United States is a place with a lot of corporate and financial opacity. That has been recognized by many actors. For example, the Tax Justice Network has said that the United States is the most financially opaque place in the world. There are certain inherent things about the country that make it an attractive place to launder money, for example: it is a large economy with a stable currency,” highlights Yansura.
Cases of environmental crimes in Colombia
Although tracking illegal money is complex, the FACT report analyzes the case of two companies in Colombia. One of them is Goldex, which in its day was the second largest gold exporting company in the country, and who allegedly, according to the document, played an important role in Colombia's “gold wars” and had a lot to do with it. in what has been described as the resulting “bloody gold” that had the final destination of the United States, where the profits were laundered.
In 2015 and for the crime of currency laundering in the form of gold export, the Attorney General's Office, in collaboration with the DIAN and the Financial Information and Analysis Unit (UIAF), attached to the Ministry of Finance, They dismantled a network made up of directors and employees of the Goldex International Marketing Company and several individuals, after an investigation of more than two years. More than $2.3 billion pesos would have been laundered.
As detailed in this report, which uses information from the Prosecutor's Office, Goldex used supply chains of short-lived fictitious companies, a common practice for companies that extract their gold from illegal exploitations, and purchased gold directly from owners who, apparently, never existed or died at the time of sale.
“In its last six years of operation, Goldex exported more than 47 tons of gold worth more than $1.4 billion. Virtually all that gold (more than 97%) It was supplied to two metal refineries in the United States: Republic Metals Corp., and RMC, in Miami. RMC continued to purchase gold from Goldex even after one of its suppliers was brought to trial in the United States on charges related to drug trafficking and money laundering, and after Goldex was sanctioned by Colombian authorities,” the FACT report states.
Another case being analyzed in Colombia is that of CIJ Gutiérrez, one of the largest gold trading companies in the country, which allegedly used false entities and transactions in the name of fictitious people to supply gold illegally extracted in the Amazon to refineries in United States, including Metalor International SA and Asahi Refining USA
In this case, the United States and Switzerland were the main destinations for CIJ Gutiérrez's gold export and where the money ended up being laundered. In 2019, the Colombian Prosecutor's Office filed charges against CIJ Gutiérrez for allegedly laundering more than $740 million in illegal gold.
Recommendations to avoid washing
Given this reality, the report also offers a group of recommendations for decision makers, with the aim of improving the traceability of economic transactions.
Among them, FACT asks the United States Congress to support the approval of the Forest Act, which would classify deforestation as a specific illegal activity – or “predicate crime” – in criminal legislation regarding money laundering. United States money. They also call for classifying all environmental crimes as predicate crimes for money laundering.
They also point out that it is necessary to increase technical assistance to the countries of the Amazon basin in order to enhance their capacity to combat illicit transnational financial flows from environmental crimes.
Likewise, support the approval of the United States Legal Gold and Mining Partnership Strategy Act, which would provide technical assistance to allow regional governments to apply specific sanctions to those involved. in the laundering of illicit gold assets and would approve the allocation of $10 million for the State Department to pursue a strategy to curb illicit gold mining in the Western Hemisphere.
Furthermore, the report also calls on the US Government to improve standards to establish anti-money laundering obligations for real estate professionals in the US residential and commercial real estate markets.
For Yansura, in the Colombian case there is a strong institutional framework that allows for actions to be taken against environmental crimes in the Amazon region; However, until anti-laundering measures are taken, entities such as the Prosecutor's Office will continue to crash against the walls of anonymity and opacity that the United States offers for those who wish to launder their money.
“With this report we hope to achieve changes in public policies mainly in the United States, but also in other countries. We want, first, to encourage law enforcement to do the job of following the money trail. When there is a case of environmental crime, it is not enough to freeze the assets or destroy the yellow machinery. We also want to promote transparency in legal entities. We constantly see how front companies are constantly used for environmental crimes. And third, we want a greater exchange of information between the United States and Colombia about the true owners of the companies or the final beneficiaries of these monies,” adds Yansura.
EDWIN CAICEDO | ENVIRONMENT EDITOR
@CAICEDOUCROS | @ELTIEMPVERDE
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