Report highlights risks of environmental crime entering financial system

Financial Intelligence Unit urges greater awareness after survey finds low preparedness across regulated sector

A new report by the Isle of Man Financial Intelligence Unit (FIU) has set out how environmental and wildlife crime can generate illicit financial flows that may pass through international finance centres, including the Island.

The document, dubbed "Environmental Crime: Typologies and Red Flags", outlines how offences such as illegal fishing, wildlife trafficking, logging, mining, pollution and habitat destruction can intersect with money laundering, tax fraud and organised crime.

It aims to improve awareness across the Island’s regulated sector and support the detection of suspicious financial activity linked to environmental crime

The report notes that while many environmental offences occur overseas, the proceeds can be routed through complex corporate structures, offshore accounts and professional services.

As an international finance centre, the Isle of Man is considered vulnerable to being used as a conduit for such funds if controls are weak.

As part of the work, the FIU surveyed 227 organisations across sectors including banking, trust and corporate services, insurance, e-gaming and other financial services.

Most respondents said they only "somewhat" understood environmental crime, while many reported that they did not routinely consider it as a potential predicate offence for money laundering.

The survey also found that most organisations did not provide specific training on environmental crime and did not use dedicated red flags or typologies to identify related risks

The report sets out a series of anonymised case studies, ranging from suspected overfishing and habitat destruction on the Island to international wildlife trafficking and illegal logging schemes.

The examples highlight warning signs such as unexplained cash deposits, opaque ownership structures, early redemption of long-term investments and the use of intermediaries to conceal beneficial ownership.

The FIU says the findings point to a need for improved guidance, training and vigilance, and stresses that understanding how environmental crime generates and moves money is key to protecting the Island’s reputation and meeting international anti-money laundering obligations.