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X. Illegal Logging A. Overview Illegal logging is a lucrative <strong>and</strong> destructive crime, yet authorities have allowed it to flourish relatively unchecked due to its perceived innocuous nature. It causes harm not just to <strong>the</strong> environment but to human security <strong>and</strong> economic development as well. The revenues provide very little long-term benefit to loggers <strong>and</strong> indigenous communities but serve as valuable financing for violent groups. With <strong>the</strong> livelihoods of 1.6 billion people around <strong>the</strong> world dependent on forests, illegal logging is not a victimless crime. 300 The tropical forests of Sou<strong>the</strong>ast Asia, <strong>the</strong> Amazon basin, <strong>and</strong> Central Africa are at <strong>the</strong> heart of <strong>the</strong> illegal timber trade. Illegal logging, like illegal fishing <strong>and</strong> illegal mining, divests developing countries of muchneeded revenues <strong>and</strong> jeopardizes sustainable development initiatives. Groups that engage in illegal logging have developed new schemes involving anonymous shell companies <strong>and</strong> fraudulent agricultural plantations to evade logging restrictions <strong>and</strong> avoid scrutiny. B. Value Illegal logging is <strong>the</strong> most profitable natural resource crime, outpacing wildlife trafficking, illegal fishing, illegal mining, <strong>and</strong> crude oil <strong>the</strong>ft. Illegally-procured timber accounts for 10 to 30 percent of <strong>the</strong> total global trade in timber products, 301 <strong>and</strong> this figure jumps to 50 to 90 percent for some tropical wood countries. 302 The global forestry products trade was worth US$522 billion in 2014, thus illegal logging is estimated to be valued at US$52 billion to $157 billion dollars per year. 303 Little of <strong>the</strong> profit from illegal logging accrues to those engaged in harvesting <strong>the</strong> timber, while <strong>the</strong> largest sums are earned by those who finance <strong>the</strong> operation. In Table V on Peruvian mahogany, <strong>the</strong> loggers or <strong>the</strong> indigenous community that agrees to <strong>the</strong> logging earn US$70 per cubic meter (m 3 ), whereas <strong>the</strong> headman or patrón sees <strong>the</strong> greatest return, earning US$626 for <strong>the</strong> same piece of timber that <strong>the</strong>y purchased for US$155, an increase of more than 300 percent. 304 By <strong>the</strong> time <strong>the</strong> wood reaches <strong>the</strong> importer, <strong>the</strong> price has increased by 5,200 percent from what was paid to <strong>the</strong> loggers <strong>and</strong>/or indigenous community. Table V. Value Chain for Peruvian Mahogany, per cubic meter (US$) Participant Amount Receives % Increase from Original Purcase Price Loggers/Indigenous Community $70 . Merchant/Lender/Habilitador $155 121% Headman/Patrón $626 794% Sawmill $1,251 1,687% Exporter $1,804 2,477% Importer $3,710 5,200% Source: Julia M. Urrunaga et al. 300 Global Witness, On Dangerous Ground: The Killing <strong>and</strong> Criminalization of L<strong>and</strong> <strong>and</strong> Environmental Defenders <strong>World</strong>wide (London: Global Witness, 2016), 18, http://www.illegal-logging.info/sites/files/chlogging/On_Dangerous_Ground_GlobalWitness.pdf. 301 Christian Nellemann <strong>and</strong> INTERPOL Environmental <strong>Crime</strong> Programme, eds., Green Carbon, Black Trade: Illegal Logging, Tax Fraud <strong>and</strong> Laundering in <strong>the</strong> <strong>World</strong>’s Tropical Forests, A Rapid Response Assessment (Arendal, Norway: United Nations Environment Programme; GRID-Arendal, 2012), 6, http://www.unep.org/pdf/RRAlogging_english_scr.pdf. 302 Christian Nellemann et al., eds., The Environmental <strong>Crime</strong> Crisis, A Rapid Response Assessment (Oslo: United Nations Environment Programme, 2014), 8, http://www.unep.org/unea/docs/RRAcrimecrisis.pdf. 303 Food <strong>and</strong> Agriculture Organization of <strong>the</strong> United Nations, FAO Yearbook of Forest Products 2014, FAO Forestry Series No. 49 (Rome: Food <strong>and</strong> Agriculture Organization of <strong>the</strong> United Nations, 2016), 226. 304 Julia M. Urrunaga et al., The Laundering Machine: How Fraud <strong>and</strong> Corruption in Peru’s Concession System Are Destroying <strong>the</strong> Future of Its Forests (Washington, DC: Environmental Investigation Agency, 2012), 19, http://www.eia-international.org/wp-content/uploads/The-Laundering-Machine.pdf. <strong>Transnational</strong> <strong>Crime</strong> <strong>and</strong> <strong>the</strong> <strong>Developing</strong> <strong>World</strong> 69
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Transnational Crime and the Develop
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Transnational Crime and the Develop
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Global Financial Integrity is pleas
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Contents Glossary..................
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Appendix Table E. Estimated Value o
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Glossary ACT AML ATS Avg. BACRIM BP
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Executive Summary Overview Transnat
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Illegal, Unreported, and Unregulate
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I. Introduction The aim of this rep
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II. Drug Trafficking A. Overview Th
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done throughout the year, increasin
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market is primarily supplied domest
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legitimate work. Money laundering i
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easily accessible, with some being
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III. Trafficking of Small Arms and
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Table E. Price vs. Distance: The We
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Cat Skin Trade. London: Environment
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Chugh, Nishtha. “Need a Kidney? I
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Dunlevy, Sue. “Australians Turn t
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Federation. Accessed September 12,
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Gupta, Sanjay. “Unintended Conseq
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“International Plan of Action to
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Lerner, Maura. “U.S. Man Defies D
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the Wildlife TRAPS Project. Cambrid
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ence 13, no. 3 (September 2014): 31
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Schmidle, Nicholas. “Disarming Vi
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Strobel, Warren, Jonathan Landay, a
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Quartz, August 12, 2016. http://qz.
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“Update on Rhino Poaching Statist
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Intelligence, September 6, 2013. ht
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About Global Financial Integrity Fo
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