Discussion meeting: Money laundering and illegal logging
Thursday 29th July 2004, Chatham House, 10 St James’ Square, London.
Mike Barrett, DEFRA Jade Saunders, RIIA
Duncan Brack, RIIA Sylvia Senior, HMCE
Sarah Jones, NCIS Hugh Speechly, DFID
David Lowe, HMCE Richard Tarasofsky, RIIA
Jani Nimesh, Crown Prosecution Service
Following work undertaken in March 2004 on the legal potential for using the UK’s anti-
money-laundering legislation (The Proceeds of Crime Act 2002, POCA) to capture the
proceeds of illegal logging, a second meeting was convened to explore the practicalities of
building a test case, and identify key barriers to action.
The meeting began with an overview of the results of the previous meeting. Details and
relevant documentation can be found at http://www.illegal-
The Department for International Development (DFID) and Department of Environment, Food
and Rural Affairs (DEFRA) representatives were keen to stress the pressure being brought to
bear by NGOs on this issue, particularly following the Greenpeace action on the MV Greveno
in the Spring of 2004. See http://www.greenpeace.org/press/release?press_id=401588 for
2 Key questions
Outstanding questions highlighted by RIIA’s previous work were:
1. Are UK enforcement authorities and prosecutors aware of the connection between
money laundering and illegal logging overseas, and the potential for using the Act? If
not, what could be done to raise their level of awareness? Which are the key
2. If they are aware, what priority do they give (or are they likely to give) the topic? What
could be done by other agencies (e.g. DFID, DEFRA) to raise this priority?
3. What are the practical implications for successful action? – including provision of
resources by UK enforcement authorities; collaboration between UK authorities;
cooperation with foreign governments.
4. What difference would warnings or provision of evidence from third parties (e.g.
5. How will UK government procurement policy for timber (which will require evidence of
legality) affect the issue? – Will there be implications for the levels of knowledge of
the provenance of their timber imports on the part of all UK timber importers?
6. Is there any scope for intra-EU cooperation on this issue?
The meeting discussion was structured around these questions.
3 Awareness of the issues among UK prosecutors and enforcement agents
It was felt by all participants that awareness of the significance, complexity and implications
of illegal logging were virtually non-existent among the majority of enforcement agents and
It was noted that no similar case had been suggested or investigated by the police or Crown
Prosecution Service (CPS), nor were the expert knowledge or tools required to undertake
such an investigation currently in place. While POCA was well understood, no thought had
been put into the possibility of using it to capture the proceeds of environmental crime.
A key problem highlighted is the fact that police wildlife crime experts have no knowledge of
money laundering processes or financial law and, similarly, financial specialists have no
knowledge of wildlife crime. This separation of skills is exacerbated by the lack of exact
parallel offences or relevant case law in the UK, from which experts could draw.
4 Prioritisation of illegal logging among prosecutors and enforcement agents
It is clear that the lack of priority attached to environmental crime in the Home Office, Her
Majesty’s Customs and Excise (HMCE) and the CPS is a significant barrier to using POCA to
capture the proceeds of illegal logging. Without such prioritisation, resources will not be
allocated to the investigation or prosecution of test cases. Current priorities are drugs, guns
and people-trafficking, and agencies and teams tend to be judged against targets in these
5 Practical issues (i.e. necessary procedures, appropriate legislation, resources and
collaboration between agencies and countries)
The process by which action could be taken under POCA was outlined. A complaint to the
National Criminal Intelligence Service (NCIS) would trigger action by HMCE to seize the
alleged illegal timber, after which the police would investigate and, if suitable evidence were
available, the CPS would act upon it to build a case, if it was felt to be in the public interest to
With respect to the possibility of capturing the proceeds of illegal logging, it was not felt by
the enforcement agents or prosecutors present that there was the necessary clear legislative
framework within which to act. Neither did they consider the potential penalties that may be
brought to bear on any but the most persistent and powerful illegal loggers significant enough
to make most investigations worthwhile.
A range of legal powers that may be of use were mentioned; however there was little clarity
about exactly how such powers could be applied and which agency would take the lead in a
The Police and Criminal Evidence Act (PACE) 1984 gives HMCE the power to detain
goods while the Police investigate whether they are of illegal origin;
Section 19 of the Customs and Excise Management Act (CEMA) 1979 gives HMCE
the power to detain goods if they do not have relevant import paperwork; however,
imported timber does not currently require paperwork showing evidence of its legality;
Some possible parallel offences were identified, including “Sites of Special Scientific
Interest” (SSSI) offences defined under the Wildlife and Countryside Act 1981 and the
Countryside and Rights of Way Act 2000, which are currently investigated by English
Nature, and logging in a protected area/national park, dealt with by the Forestry
Commission (however, in some cases these are regulatory rather than criminal
offence, so would not be an appropriate trigger for action under POCA.) Simple ‘theft’
of timber was also a possible trigger.
It was concluded that POCA should not be used as a replacement for clear primary UK law
prohibiting the importation of illegally sourced timber. A law prohibiting the import of illegal
timber would allow HMCE to act and, similarly, a law prohibiting any trade in such timber
would allow the Police to act.
Specialist money laundering units have been established in both the police and HMCE, and
in each case, expertise in drugs and people trafficking have been brought in. No
environmental crime specialists have been employed and no resources allocated to that use
of the legislation.
The possibility of establishing a separate agency to prosecute environmental crime was
raised. Some participants felt that it would be good to have such expertise collected together
in one organisation, in which resources could clearly be allocated to tackling such crimes,
which could then be prioritised in a transparent manner. Unfortunately there was not felt to
be the necessary political will within either the police or Home Office to establish such an
The evidential burden associated with bringing a successful case in the UK courts was
noted. It was felt that the collection of such evidence would be hugely resource-intensive and
would tend to act as a significant disincentive to such a case being undertaken, unless there
was a chance of holding a particularly persistent or powerful criminal to account.
Public interest judgements
Prosecutions are only brought by the CPS if there is clear evidence of such a move being in
the public interest. Although this may present a potential barrier to such a case if the public
were deemed to be UK citizens only, it was felt that the definition of public interest used by
the CPS is broad enough to encompass an action such as that proposed if enough robust
evidence was available – for example in the recent case of illegal bush meat import
The vital importance of cooperation with the timber producing country in question for the
prosecution of a successful case was recognised by all participants. Clear audit trails back to
the forest floor would be needed and these could only be provided by individuals in-country.
Examples where apparently clear cases of international fraud have not been tried due to
obstruction by host country governments were detailed briefly. And it was further noted that,
in the event that governments are cooperative, it is likely that they will become part of the
proposed EU voluntary timber licensing scheme, in which case illegal timber should already
be excluded. Prosecution under POCA was originally thought to be an option for capturing
illegal loggers in countries outside the scheme; however if prosecution of a case were reliant
on government cooperation it may not be possible for action under POCA to play this role.
In addition to government cooperation, the question of investigative jurisdiction and
cooperation between national police/customs officials was raised. The limitations placed on
enforcement or investigation agents from one country, acting in another, were detailed. It
was proposed that a clear agreement to establish the respective rights and competencies of
different agents from timber-producing and -consuming countries in a potential investigative
situation, would go some way towards addressing these problems.
The possibility of a prosecution of a disclosure offence on the part of a bank or other
institution in the regulated sector was thought to be highly unlikely. No such cases have been
brought to date or under previous legislation of this type.
6 What role can be played by third parties such as NGOs?
In principle, any individual or organisation can report a suspected crime and trigger an
investigation providing that there is evidence to suggest that their claim is legitimate;
however it was noted that in the case of the Greenpeace action on the MV Greveno,
campaigners suggesting such an investigation to the police at the dock-side were ignored. It
was felt to be almost certain that the police in question had not been trained in the
complexities of POCA and as such could not be expected to take such allegations seriously.
Information that comes to NCIS from third parties is also rated according to source in line
with the National Intelligence Model. It was felt to be likely that information or allegations
provided by an NGO or campaigning organisation would not be considered to be of a
particularly high standard or to have come from a trustworthy source. Such a potential
institutional bias could seriously undermine efforts to start an investigation. Engagement and
improved communication-channels between NCIS intelligence officers and the NGO
community may provide a solution to this problem. It may also be useful for a government
department such as DEFRA or DFID to act as a conduit for such information, where it is
deemed by the department to be reliable.
Where an NGO is employed as an official monitor within the proposed EU licensing scheme,
they may be in a better position to provide evidence deemed reliable by NCIS and the CPS.
7 What are the implications of the proposed UK Government Procurement Policy?
It was hoped that the implementation of the government procurement policy may engender
more understanding of the importance of legal verification for timber products among
government agencies but it was not felt likely that it would overcome the fundamental
barriers of unclear legislation, a lack of expertise or awareness and low resourcing priorities.
8 Is there scope for intra-EU cooperation on the issue?
It was unanimously felt that there was clear scope for improved communication and co-
operation between UK Government agencies to align their priorities on the issue, as well as
with agents in other EU and timber producing countries. It was proposed that a meeting be
arranged between DEFRA and DFID ministers and their Home Office and HMCE
The World Customs Organisation (WCO) was seen to have some potential for facilitating
cooperation between customs’ officers of different producer and consumer countries
although it does not current have the capacity or processes to do this.