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Financial crime, green crime and corporate risk

Anubhuti (David) Kumar
Anubhuti (David) Kumar
Proposition Director – Financial Crime (Screening) Data and Software, Refinitiv, an LSEG business

Financial crime and green crime continue to inflict severe consequences on individuals, companies, and societies across the globe every year. A multi-faceted, collaborative approach is needed if we are to succeed in the fight against the criminal networks perpetuating these crimes.

  1. Financial crime and green crime are often closely linked with criminal networks concealing their activities within complex webs.
  2. Our new Special Interest Categories feature in World-Check can help create more awareness around the nature of potential risks and assist organisations to comply with more stringent regulations.
  3. Reliable and complete screening data is crucial. However, information and resource sharing through public-private sector collaboration can be a game changer.

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Financial crime (including fraud, money laundering, theft, bribery and corruption, cybercrime and modern slavery) and green crime (including wildlife trafficking and environmental crime) are often closely linked, and the criminal networks responsible for perpetuating these illicit activities frequently conceal their activities within complex customer or third-party supplier, vendor and partner networks. 

Financial crime costs organisations approximately 3.5 percent of their global turnover every year and the World Wildlife Fund (WWF) estimates the value of illegal wildlife trafficking to be in the region of US$15bn-23bn per annum. Financial crime, green crime and corporate risk

While crimes such as fraud and money laundering can have crippling economic consequences for organisations, societies and even entire countries, other crimes – including human trafficking and modern-day slavery – have an incalculable social and humanitarian impact on the lives of millions of individuals every day.

For those forced into slave labour by criminals infiltrating supply chains, or the victims of sex trafficking gangs who launder their profits through the financial system, the cost is catastrophic. – Refinitiv, Revealing the true cost of financial crime, 2018 survey report. Financial crime, green crime and corporate risk

At the same time, green crimes are systematically contributing to significant biodiversity loss, with far-reaching consequences for every country across the globe.

Refinitiv World-Check Risk Intelligence helps you to comply with legislation and protect your organisations from financial crime and reputational harm

Third-parties linked to financial and green crime

Refinitiv research reveals that 41 percent of third-party relationships within global supply chains are not subject to due diligence checks at the onboarding stage. Furthermore, 60 percent are not subject to ongoing monitoring.

Gaps such as these create an ideal opportunity for criminals to continue their illegal activities undetected, and it is therefore crucial that organisations screen all potential and existing third-parties for involvement in any aspect of financial or green crime.

Any links to individuals or entities associated with these forms of crime can lead to both significant financial penalties and potentially severe reputational damage.

Not only must organisations protect themselves against the potential financial and reputational risks of associating with individuals or entities linked to these crimes, but they must also ensure compliance with ever more stringent regulations, including:

  • The 5th EU Anti-Money Laundering Directive (5AMLD),which introduced stricter requirements aimed at eradicating financial crime. These included, inter alia, more stringent controls for cryptocurrencies; a greater emphasis on transparency around ultimate beneficial ownership (UBO); the extension of reporting requirements to more industries, particularly those relating to high value goods; and enhanced due diligence requirements in high risk countries.
  • The 6th EU Anti-Money Laundering Directive (6AMLD), which specifically lists environmental crime as a focus area. New EU regulations that will standardise environmental, social and governance (ESG) reporting requirements, making it easier to identify companies that score highly in the critical ESG arena.

Adverse media screening

Adverse media screening – which broadly includes allegations published, or alleged involvement, in money-laundering, corruption, sanctions exposure, threat financing or other unlawful activity – has become a key aspect of customer and third-party due diligence processes because it can help uncover risk by flagging possible involvement in criminal activity.

Organisations should ensure that they have reliable access to quality adverse media content, both structured and unstructured, when onboarding new customers and third-parties, as well as for ongoing monitoring purposes.

Refinitiv’s World-Check Risk Intelligence database combines structured and unstructured adverse media data to help organisations comply with regulations, pinpoint risk, and protect themselves from financial and reputational harm.

Structured adverse media content includes the names of individuals and entities associated with an activity which fits the World-Check inclusion criteria – both in the pre- and post-conviction stages.

We use a combination of natural language processing and human expertise to collate information from a wide variety of reputable news sources in order to create a unique person or entity record in World-Check containing the relevant risk event, stages and classifications.

Our media screening tool, World-Check One Media Check, helps users to navigate unstructured content. Intelligent tagging and natural language processing are used to improve screening efficiency and relevancy so that content results become more targeted to the user’s requirements.

Media Check. Financial crime, green crime and corporate risk

New Special Interest

Furthermore, World-Check now offers a new Special Interest Category feature. We have created more than 60 special interest categories and the categorisations will be applied to all records, including adverse media records.

Special Interest Categories. Financial crime, green crime and corporate risk

The Special Interest Categories deliver a more granular view of adverse media. They highlight the offence or offences with which the individual or entity is associated and provide more clarity around the reasons for inclusion of the record in the database.

Users can select and filter the topic most relevant to their specific business risks and can slice and dice the available data according to their individual needs.

Watch: Targeted Adverse Media Screening

Power in collaboration

While reliable and complete screening data is a key tool in the fight against financial and green criminals, the wider sharing of information and resources through extensive public-private sector collaboration remains crucial.

Refinitiv is committed to collaborating with a wide range of NGOs with experience in raising awareness around financial and green crime.

  • In October 2020, Refinitiv joined forces with United for Wildlife to disrupt criminal wildlife trafficking networks.
  • In January 2021, Refinitiv announced a partnership with The Sentry, an investigative and policy team that seeks to prevent African war criminals and their business networks from abusing the international financial system.
  • In February 2021, we announced a partnership with Freedom Seal Global, a mark of trust awarded to companies that are effectively taking action to eradicate modern-day slavery.

In April 2021, Refinitiv will be hosting a webinar with expert speakers from our partners, including Rani Hong, CEO of Freedom Seal Global, and the panel will discuss the widespread nature of both financial and green crime, and will delve into the many issues surrounding money laundering, illegal wildlife trafficking and modern slavery.

Listen to our Webinar On-Demand to find out how Refinitiv is using a combination of trusted data and deep collaboration with a range of influential NGO partners to expose criminals and help eradicate pervasive financial and green crime within corporate networks and global supply chains.

Image promoting Refinitiv's On-Demand Webinar: Preventing Financial Crime Through Collaboration.

Refinitiv World-Check Risk Intelligence helps you to comply with legislation and protect your organisations from financial crime and reputational harm