International Finance And Banking And Illegal Practices

During the last 30 years it has become more evident that many international finance and banking institutes have actually been profiting (although unwittingly) from illegal activities. This is especially so in relation to the demand by some countries for timber that has been obtained illegally, normally through a forest being cleared illegally, and is occurring widely in the tropics.

There are efforts that are now being put in place which will then be used to improve the due diligence procedures that many financial institutes have. Unfortunately these procedures vary greatly from one institute to the next. Most public institutions are already regulated and will have certain safeguards in place which will help to ensure that they do not make any kind of profit from the kind of illegal activities mentioned above. But they need to be somewhat transparent in the financial dealings and have the information readily available to certain accounts or transactions that take place and which can be shown to those that request such information. However many private lending banks are not governed by such regulations but some are now starting to sign up to the Equator Principles.

This is a set of principles and standards which have been set up to ensure that such banks do not invest in such illegal activities relating to the purchase of wood and timber today. However there is little information currently available to those that are not involved in private lending banks. So it is unknown just how these principles and standards are being implemented by them.

In fact extreme efforts are being made on a continuous basis now, because more and more people and businesses are getting involved in international finance and banking, to ensure that illegal practices are eliminated. Certainly it may take some time and not every financial institute involved within this sector is likely to want to ensure that they keep to these regulations as they feel it will cut in to their profit margins. But hopefully within the next few years we shall see a decline in the number of financial institutes that offer international finance and banking facilities to their clients who will be involved in the issue of illegal forestation and logging.