Case Study
Chile
Associated commodity
Associated commodity
Associated crime
Source
Organised Crime, Money Laundering and Environmental Damage in Chile's Timber Sector

Illegal logging is an ongoing issue in Chile and has caused extensive environmental and economic damage over several decades. The World Bank notably reports the destruction of 11,368 hectares of land and the generation of 1.2 million m_ of illegally harvested timber from 2013 to 2019. A significant consequence of the enormity of this sector is illicit activity, such as timber theft by criminal mafias. Timber theft by criminal mafias has surged, with the value of stolen wood increasing from US$20 million in 2018 to US$67.8 million in 2020. In addition, the ongoing conflict between the Mapuche Indigenous community and the government has also intensified due to logging on ancestral lands. Criminal groups exploit this situation, engaging in timber theft, creating fake invoices, and laundering illegal timber through legitimate financial structures. Investigations have revealed significant laundering through false documentation, sometimes even involving internationally certified companies. The government's institutional framework has allowed organised crime to flourish in the timber sector. Government agencies have inadequately supervised timber companies, particularly regarding the proper use of shipping documents and invoices and the sustainable use of forest lands.

Keywords
Illegal Logging, Timber Theft, Mafias, Fake Invoicing, False Documentation, Money Laundering, Chile, Weak Government Agencies