Reported by Scilla Alecci and Brenda Medina

The United States has become a destination for the proceeds of environmental crimes, undermining global moves to stem illicit financial flows and combat the climate crisis, according to a new report by a prominent anti-corruption advocacy group.

The report by the Financial Accountability and Corporate Transparency (FACT) Coalition, published on Oct. 26,  said that “critical gaps” in the U.S. anti-money laundering system are vulnerable to exploitation by criminal groups, including those behind the destruction of the Amazon, the world’s largest tropical rainforest.

According to FACT, which represents more than 100 international transparency and conservation groups, the prevalence of abuse-prone shell companies and other secretive entities —  which allow bad actors to anonymously stash dirty money in the U.S. and invest in real estate — are a key part of the problem.

“Financial secrecy makes the U.S., in some ways, the perfect playground for criminals looking to stash the illicit proceeds of environmental crimes,” FACT’s report said. The country “has a crucial role to play in denying financial safe haven to criminals that would degrade the Amazon,” the report said, which “poses a major climate risk for the world as a whole.”

Deforestation, and the subsequent loss of so-called “carbon sinks,” which absorb carbon dioxide from the atmosphere, is one of the major causes of climate change.

“Unless the U.S. implements comprehensive reforms, including the weaknesses that are described in the report, it will continue to provide an avenue for criminal actors wanting to abuse our financial system and launder environmental crimes proceeds,” said Ian Gary, the coalition’s executive director, at an event in Washington, D.C., to launch the report.

According to Interpol, illegal proceeds from environmental crimes, including illegal logging and mining, amount to $281 billion a year, and are often linked to corruption.

Read full report: https://www.icij.org/investigations/deforestation-inc/us-perfect-playground-for-laundering-money-linked-to-environmental-crimes-new-report-finds/