Environmental crime subject to BSA, agency writes

(Nov. 24, 2021) Known or suspected environmental crime is an important part of a financial institution’s compliance with the Bank Secrecy Act (BSA), according to a notice issued late last week by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

The FinCEN notice highlighted 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 in the FinCEN notice.

An “upward trend” in environmental crimes and associated illicit financial activity is occurring, the notice indicated. The financial crime unit said it was highlighting the trend because of:

  • its strong association with corruption and transnational criminal organizations, two priorities for the agency in its efforts to combat national anti-money laundering and counter financing of terrorism (AML/CFT, or anti-money laundering/countering the financing of terrorism);
  • 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.

The agency said credit unions and banks may consider using the authority provided under the BSA’s 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 the 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