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Call for financial transparency reform and fund the Financial Intelligence Service to crack down on environmental money laundering
Washington — At a House Financial Services Committee hearing today. Congresswoman Ayanna Pressley (MA-07) He highlighted the intersection of environmental crime and illicit financial activity, stressing that both contribute to the climate crisis, endanger public safety and threaten democracy. Congressman Pressley called for financial transparency reform and adequate funding for the nation’s financial intelligence agency, the Financial Crimes Enforcement Network (FinCEN), to crack down on environmental money laundering.
A complete transcript of her interactions with FinCEN Director Andrea Gacchi and the Treasury Under Secretary for Terrorism and Financial Intelligence is available below, and the full video is available here.
Transcript: Pressley at hearing focuses on intersection of environmental crimes and illicit finance
US House of Representatives Committee on Financial Services
February 14, 2024
Congressman Pressley: Deputy Secretary Nelson, Director Gacki, thank you for joining us.
Environmental crimes have increased in recent years. From wildlife trafficking to illegal logging, mining and fishing, global environmental crime is estimated to generate hundreds of billions of dollars in illegal profits each year, making it the third most profitable industry in the world. It has become a crime.
These crimes continue and contribute to the climate crisis.
I am reminded of those devastating images of the Amazon rainforest on fire. In 2022, Amazon will lose more than 10 soccer fields every minute.
It was not a naturally occurring phenomenon. Illegal mining and illegal forestry contributed to the problem.
The bipartisan FACT coalition released a report last October titled: Dirty money and the destruction of Amazon. It highlights how profits from environmental crimes in the Amazon rainforest find their way into the U.S. financial system. I would like to submit this report for the record.
Congressman Kim: No objection.
Congressman Pressley: While harmful in their own right, environmental crimes are also linked to other convergent crimes, such as drug trafficking, corruption, and money laundering, that endanger public safety and corrupt democracy.
Financial transparency reform is important.
Director Gucki, could you talk about what FinCEN is doing to address the relationship between environmental crime and the U.S. financial system?
Director Gakki: Thank you, Congressman Pressley. We agree that this is a very important concern for us. Here are some of the things we are working on. We are bringing together public-private partnerships and interactions between law enforcement and financial institutions to highlight the risks of environmental crime.
A few weeks ago, we had a FinCEN exchange specifically focused on illegal wildlife trade. And a few weeks ago, as part of his Egmont Group, of which FinCEN is a key member, I had the opportunity to meet with heads of financial intelligence from around the world. South Africa and Brazil.
In Brazil, we are particularly focused on how we can partner to ensure that our systems highlight, report and engage with illegal detention, illegality, forestry, etc., as you pointed out. I guessed. And in South Africa, in light of Secretary Yellen’s visit, I think it was last year, we are looking to strengthen our partnership with the South African financial intelligence sector. This is to emphasize the reports you get from your destination. When it comes to illegal wildlife trade, the point of departure or transit point is important.
So this is a top priority for us and we are doing our best to contribute.
congressman pressley: thank you. Thank you, director. The Republican majority seeks to defund our nation’s financial intelligence sector by cutting FinCEN’s budget.
Secretary Gucki, if the Republican majority is successful in making these funding cuts, what could be the impact on FinCEN’s ability to finalize rules to combat financial crime and close money laundering loopholes? Is not it.
Director Gakki: Thank you, Congressman. We would like to thank FinCEN for all of its funding support over the years. However, I would like to point out that over the past two budget cycles, we at FinCEN have received funding of $20 million and $30 million, respectively, under the President’s budget. Of course, we will fulfill our parliamentary obligations regarding implementation. But what I’m really concerned about is whether we can dedicate resources to something as important as the FinCEN exchange. You know, we’re documenting requests to increasingly focus on fentanyl, you know, wildlife trafficking, environmental crimes. I think these will suffer from lack of funding.
Congressman Pressley: thank you. And as environmental crime is devastating Indigenous communities and contributing to climate change, Deputy Secretary Nelson will lead the development of a whole-of-government strategy to curb illicit finance linked to environmental crime in the coming months. We urge the Ministry of Finance to encourage this.
In your opinion, Permanent Secretary, is that something that Congress and the Treasury can work together on?
Secretary Nelson: That’s true. We think he produced a report a year and a half ago that looked at illicit financial risks and how they facilitate natural crime. And this work has taken me to Brazil, South Africa, and Kenya, and I’ve had the opportunity to speak on these very issues just recently. Especially in Kenya, I hear things that are a bit surprising, at least to me. They have a large amount of sandalwood trees that are being deforested and could become extinct as a result of this very problem.
So, as Secretary Gucki pointed out, this is a very high priority for Treasury.
Congressman Pressley: thank you.
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