Deforestation and Conversion-linked Financial Crimes Toolkit

Please read full ITT document for information.

KEY OBJECTIVES

Interpol estimates illegal logging alone is worth approximately $152 billion a year, accounting for up to 90% of tropical deforestation in some countries. In the Amazon, recent studies have found that 94% of deforestation and habitat destruction in Brazil's Amazon and Cerrado could be illegal, and in Amazon countries like Colombia, Peru and Bolivia illegal enterprises and organised crime are behind one of the main drivers of deforestation: land grabbing. If viewed alongside more broad deforestation risks and environmental crime it is the 4th-largest organised crime after drugs, people and counterfeiting, costing billions annually. Financial crime is at the heart of it.

This project aims at developing a toolkit (the "Toolkit") to help Financial Institutions set up the tools and methodology to identify and monitor transactions potentially linked to financial crimes derived from deforestation or land conversation

WWF underlying objectives are:

• To raise Financial Institutions' (FIs) awareness of financial crimes and human right abuses linked to deforestation and conversion in commodity supply chains.

• To provide FI's compliance teams with a toolkit to support screening & onboarding of clients and transactions against a typology of crimes and red flags.

• To develop framework to support FI's Know Your Customer (KYC) protocols relating to deforestation and environmental crime risks.

Banks no longer consider credit and market risks as their sole major risks; as reputational, legal, and financial consequences of their compliance risks have increasingly gain relevance. US Financial Authorities such as Financial Crimes Enforcement Network (FinCEN) are taking crimes linked to deforestation seriously and therefore anticipate that the extraterritoriality of US laws could soon have overreaching impacts on financial institutions globally. In addition, the implementation of the EU Deforestation-free products regulation will require financial institutions to conduct due diligence checks to stop investments that cause deforestation within two years after the law comes into force. The UK may follow suite.

The Toolkit provides a way to mitigate those rising risks and therefore has vocation to:

• impact the entire financial sector's approach to environmental crime and risk controls

• increase awareness of the emerging risks linked to deforestation, conversion and wider environmental crime, and

• promote more ambitious policies on deforestation and conversion in FIs.

Lot 1:

• Research and Data Collection:

Deliverable: Introductory Report

• Analysis:

Deliverable: draft Risk Assessment template and guidance

• Testing & validation:

Deliverable: validated Risk Assessment template and guidance

Lot 2:

• Website conception and development.

Deliverable: platform available online

Tender Documents

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