Co-mingling: Mixing illicitly sourced products with legitimate products of the same type to obscure origins.
The co-mingling of illegally produced or stolen timber into legitimate sawmills is one of the most common ways for illicit timber to be moved. Refineries, mills, factories, and other physical points in the supply chain are all places where the source can be obscured.
Traffickers have been caught hiding illegal ivory within legitimate timber exports to East Asia. The shipments used fraudulent bills of lading and cargo manifests, and the ivory was not declared, enabling funds to flow through formal banking channels under the guise of legal trade.
Trade diversion and transshipment: Re-routing goods through intermediate countries to disguise true origin or destination.
Documentation alteration: Changing paperwork to make products appear to originate from different locations.
Ghost ships/Shadow fleets: Vessels that disable tracking systems (AIS) to conceal movements and facilitate illegal trade. These create opaque parallel trade patterns that allow illegal commodities – such as minerals, wildlife, and timber – to be smuggled.
Phantom shipments: Falsifying documentation to move funds without physically shipping any goods.
Route manipulation: Using unnecessarily complex or circuitous shipping routes. Criminals may look to re-route illicitly sourced commodities or restricted goods through intermediate countries to disguise their true origin or destination. This can help make illicit commodities appear legitimate or evade sanctions or trade restrictions.
Timber, for example, may be illegally logged in a country with weak enforcement or forestry laws and then exported through an intermediary country to a final destination. This process often involves the altering of documentation to make it appear as though the timber originates in the intermediary country.
False invoicing: Over- or under-declaring quantity, value, or type of goods. This practice is commonly used to move illicit commodities or proceeds across borders.These create opaque parallel trade patterns that allow illegal commodities – such as minerals, wildlife, and timber – to be smuggled.
Timber shipments may be falsely invoiced as lower-value wood species or construction materials to reduce scrutiny. High-value endangered hardwoods or timber from protected areas might be declared as common plantation timber.
Forged documents: Creating fake letters of credit, customs documents, or shipping papers.
Wildlife traffickers have shipped grey parrots from the Democratic Republic of Congo through Nigeria using falsified export documentation to claim the birds were captive-bred in Nigeria. This mislabelling tactic disguised the true origin of the birds and involved manipulated customs declarations and routing.
Bill of lading manipulation: Altering shipping documents to conceal true product origins. These are sometimes hand-written and therefore susceptible to fraudulent alteration which may serve to obscure goods’ true provenance, thereby concealing illicit activity.
Official corruption: Bribing customs officials, port authorities, or regulatory bodies.
Payment methods: Cash payments, bank transfers disguised as legitimate transactions, luxury goods, or services.
Systematic corruption: Establishing networks of corrupt officials across multiple jurisdictions.
Criminal groups engaging in wide-scale environmental crimes such as timber or ivory trafficking often have established networks and significant resources to bribe and corrupt officials at multiple levels - including offering a share of profits - or may turn to intimidation or coercion to force officials into compliance.
Illegal mining operations often require extensive corruption networks, including payments to local officials, mining inspectors, and export authorities. These payments may be disguised as consulting fees or equipment purchases.
Abnormal source or destination countries that don't make economic sense for the product (e.g. commodities that are not widely grown in or exported from a source country, imports to a destination country that is a large producer and exporter of that commodity).
Transshipment through one or more jurisdictions for no apparent economic or logistical reason.
Critically endangered rosewood logs are often shipped from Africa to Asia through circuitous routes, such as through the Middle East, to falsely claim transit ports as origin ports.
Minerals from illegal mining operations are often processed through multiple countries before reaching final markets. Gold from illegal mining in the Amazon, for example, may be shipped through intermediary countries with less stringent controls before entering global commodity markets.
Watch for wildlife shipments from countries that are not natural habitats for the species being traded, mineral shipments from places where there are no significant deposits, or shipments routed through multiple countries with weak enforcement before reaching final destinations.
Vague port descriptions (e.g. “Any safe world port”).
Unusual changes of shipping routes
The use of free trade zones and free ports.
A Brazilian syndicate used fake invoices and shell companies to channel nearly US $800 million from illegal gold mines in the Amazon through a handful of bank accounts, with funds routed through high-risk jurisdictions like Dubai and Hong Kong.
Products which are difficult to value.
Commodities which seem inconsistent with a client’s business profile.
Cash payments for transportation costs or payments by unrelated third parties.
Delivery address changes after shipment, as this could signal an intention to divert a shipment.
Significant differences between the wire transfers received and the noted freight values.
Repeatedly amended or frequently extended letters of credit without reasonable justification or for reasons like ‘changes of beneficiary or location of payment’.
Lack of transparency about product origins.
Overly long or complex supply chains
To spot anomalies, it is important to first understand what a ‘normal’ supply chain looks like and identify the specifics of different commodities. For example, paper tends to have shorter supply chains than plywood, which goes through multiple brokers and supply tiers, and therefore warrants greater due diligence.
Discrepancies between shipping documents and actual goods or payments.
Physical Concealment
According to EUROPOL's Environmental Crime Threat Assessment, smaller animals like birds and protected plants are typically trafficked in concealed spaces. Air couriers hide exotic specimens in luggage or disguise them within sculptures and other goods. Some operations use supervisors to accompany couriers, similar to drug trafficking methods.
Document Fraud
Traffickers frequently use falsified permits, certificates, or documents that misrepresent CITES-protected species as non-regulated. Criminal groups in Northwest Europe collaborate with breeders in other EU states to "launder" wild-caught animals, using false documentation to sell them as "captive-bred" on legitimate markets.
Enforcement Challenges
Difficulties verifying foreign certificate authenticity hamper enforcement efforts and enable fraudulent documentation schemes.
Questionable paperwork (e.g. duplicate certificate numbers, missing permit details, potentially falsified signatures, and anomalous, incomplete, or suspicious certificates of origin).
Goldex, once Colombia’s second-largest gold exporter, laundered illicit gold by using falsified documentation and fabricated invoices. In some cases, they misused the licenses of deceased individuals to obscure true ownership. Gold was exported to refiners in the U.S. with falsified origin papers, and the companies involved had unusually short lifespans, suggesting they were set up purely to facilitate the laundering of gold and quickly dissolved to avoid scrutiny.
Dubious or vague descriptions of commodities on shipping documents and invoices
Missing or incomplete details in the shipping documents (e.g. the ship's name, IMO number, port of loading, and port of discharge).
Sequential/continuous document numbers suggesting manufactured documentation.
Companies using post office boxes rather than physical addresses.
Use of nominee directors without relevant experience.
Business activities inconsistent with company's usual operations.
Scale of transactions inconsistent with company size.
Small trading companies suddenly handling large volumes of precious metals or minerals should trigger enhanced due diligence. Verify that company executives have relevant mining or commodities experience.
Entities registered or operating in jurisdictions with weak AML and/or CFT compliance (e.g. on the FATF Black List or Grey List).
Split consignments across multiple shipments.
Shipments that do not make economic sense (e.g. the use of a forty-foot container to transport a small amount of relatively low value merchandise).
Carousel transactions (the repeated importation and exportation of the same high-value commodity.
Be alert to repeated small shipments of the same species from the same suppliers, as this may indicate attempts to stay below regulatory thresholds or avoid detection through volume splitting.
The Environmental Crimes Financial Toolkit is developed by WWF and Themis, with support from the Climate Solutions Partnership (CSP). The CSP is a philanthropic collaboration between HSBC, WRI and WWF, with a global network of local partners, aiming at scaling up innovative nature-based solutions, and supporting the transition of the energy sector to renewables in Asia, by combining our resources, knowledge, and insight.
Abnormal source or destination countries for a product that do not make economic sense (e.g. commodities that are not widely grown in or exported from a source country, imports to a destination country that is a large producer and exporter of that commodity).
Shipments or transactions where descriptions of ports are vague (e.g. 'Any safe world port').
Trade in products which are difficult to value.
Shipment in commodities which seem inconsistent with a client’s business profile.
Change of the delivery address at any time after a commodity was shipped, as this could signal an intention to divert a shipment.
Discrepancies between the description or value of a commodity in shipping documents and invoices, relative to the actual goods shipped or actual value in payments made.
Questionable paperwork such as duplicate certificate numbers; missing permit details; potentially falsified signatures; anomalous, incomplete, or suspicious certificates of origin; dubious or vague descriptions of commodities on shipping documents and invoices and details such as the ship's name; IMO number, port of loading, and port of discharge missing or incomplete in the shipping documents.
Transactions which involve the use of repeatedly amended or frequently extended letters of credit without reasonable justification or for reasons like ‘changes of beneficiary or location of payment’.
Trade in noncertified timber (the two most widely used certification schemes are the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC)).
Trade in any timber species that appears on the CITES Appendix I or II.
Suppliers who aren’t transparent about the origins of any commodities or where the supply chain is overly long or complex (or where it involves companies with post office boxes rather than physical addresses): it is important to understand what a ‘normal’ supply chain looks like for any relevant commodities (e.g. paper tends to have shorter supply chains (e.g. forest, pulp mill and printer) than plywood, which goes through multiple brokers and supply tiers, and therefore warrants greater due diligence).
Significant differences between the wire transfers received and the noted freight on board value exported.
Consignments split or spread across multiple shipments.
The use of free trade zones and free ports.
Shipments that do not make economic sense (e.g. the use of a forty-foot container to transport a small amount of relatively low value merchandise).
Indications of carousel transactions (the repeated importation and exportation of the same high-value commodity).
Are the owners or senior managers acting as nominee directors to conceal the true beneficial owners? Do the nominee directors appear to have the relevant experience to manage the company?
Transactions where a shipper or a consignee insists on paying transportation costs in cash, or where these are paid by a third party (e.g. not a shipper or a receiver).
Unusual changes of shipping routes (e.g. overly circuitous routes) or where a commodity is trans-shipped through one or more jurisdictions for no apparent economic or logistical reason.
Where certain documentation in a transaction is numbered sequentially/continuous numbers, which might indicate that either the documentation or the transaction itself is manufactured or false.
An entity that is registered in or has an office in a jurisdiction with weak AML and/or CFT compliance (e.g. on the FATF Black List or Grey List).
The type of commodity being traded appears inconsistent with the exporter or importer’s usual business activities (e.g. a steel company that starts dealing in paper products, or an information technology company that suddenly starts dealing in bulk pharmaceuticals), or with the scale of the exporter or importer’s regular business activities.
