As Global conflicts flare, G7 unites to combat illicit financing – part 1

Israel’s attack on Iran’s nuclear infrastructure — just days before G7 leaders arrived in Canada for the June 14-15, 2025 summit — prompted widespread international concern of a possible escalation in Middle Eastern instability. 

It also posed the question: could the G7 remain focused on the agreed agenda, or would they be forced to shift their attention to the crisis at hand? 

The G7 convened in Kananaskis, Alberta, under the three priorities outlined by the current presidency of Canada, and identified by Canadian Prime Minister Mark Carney as: protecting our communities and the world; building energy security and accelerating the digital transition; and securing the partnerships of the future. 

Priorities were sharpened as the summit drew nearer, however, and the two-day discussions focused on: the wars in Ukraine and the Middle East; securing critical mineral supply chains; harnessing emerging technologies such as artificial intelligence (AI) and quantum computing; addressing the global drivers of migrating, with a focus on combating human trafficking and migrant smuggling, transnational crime and drug trafficking; and wildfire prevention and response.  

To mitigate a lack of alignment among leaders, rather than the standard final communique outlining the areas of consensus, the presidency opted for seven subject-specific statements alongside a chair’s summary, which described the summit’s key achievements. 

Throughout several of these documents, G7 leaders called for the adoption of measures to tackle illicit financing. This demonstrated that despite ongoing bilateral tensions between members, and amid significant geopolitical instability, they remain committed to addressing this significant area of concern.  

Key commitments to emerge included boosting anti-money laundering (AML)/countering the financing of terrorism (CFT) measures; countering proliferation financing (that is, the funding of nuclear, chemical or biological weapons) ; and anti-bribery and corruption measures. 

Fighting organised crime 

At the Kananaskis summit, G7 leaders committed to dismantling the transnational organised crime groups that are profiting from migrant smuggling. They shared the importance of collaboration to counter the smuggling of migrants and the trafficking of illicit synthetic drugs, endorsing a “follow the money” approach.

In the G7 Statement on Countering Migrant Smuggling, leaders highlighted how migrant smuggling is associated with other crimes, such as money laundering, human trafficking, drug trafficking, and corruption, and how it also exposes victims to “grave and life-threatening risks”, ranging from physical abuse and sexual and gender-based violence to extortion, exploitation, forced labour and criminality. 

Leaders also shed light on the recent trend of weaponising “migrants to undermine stability or as a hybrid warfare tactic”.

A key priority to emerge was ensuring the reliable and responsibly produced critical mineral supply chains necessary to improve security and advance the digital transition. The United Nations Office on Drugs and Crime (UNODC) recently identified the increased demand for critical minerals as “amplifying the risks of crime, corruption and instability in the mineral supply chain.”

The UNODC highlighted the role of organised crime groups, corporations and individuals in illegal trafficking and mining — with local populations often displaced and/or subject to sexual exploitation or forced labour as a consequence.  

Gender equality lacks detail 

In the Critical Minerals Action Plan, G7 leaders committed to deepening their cooperation with mineral-rich emerging market and developing country partners and, in doing so, pledged to combat gender-based violence in the mining industry. This commitment recognises a pervasive, yet poorly understood issue. 

A report by mining giant Rio Tinto found that while women comprise just 15% of the global mining workplace, the culture within the wider sector exposes them to the full spectrum of gender-based violence harms, from sexism to rape. The statement in the Critical Minerals Action Plan provided little detail on how the G7 planned to meet this commitment, however.  

In 2019, G7 leaders implemented the Biarritz Partnership on Gender Equality, which calls on all countries to identify and abolish gender discriminatory laws — a key  component of this was ending gender-based violence. 

References to these previous commitments were absent this year, as was any evidence of a ‘gender mainstreamed’ G7 agenda — which has been the case for the past several years. This perhaps reflects the overall lack of consensus on these issues and a broader ideological shift away from equality-focused policies among G7 leaders.  

Combating migrant smuggling

Nevertheless, the group shared progress they’d made through the G7 Coalition to Prevent and Counter the Smuggling of Migrants. This had been done, among other things, by enhancing investigative capacities and international cooperation between law enforcement, the judiciary, and border officials. 

To step up the fight against migrant smuggling, the G7 committed to “follow the money” by exploring innovations in financial intelligence and information-sharing in order to identify and disrupt criminals. 

It will also work with origin and transit countries to increase awareness of migrant smuggling risks, and support capacity-building initiatives related to border management. It further indicated it would work with social media companies to prevent organised crime groups from misusing online platforms for their migrant smuggling operations. 

Lastly, it will engage with transport operators to limit irregular migration. 

The G7 will also explore “the potential use of sanctions to target criminals involved in migrant smuggling and trafficking operations from countries where those activities emanate”. This could consist of either the creation of a new autonomous sanctions regime, or the application of existing sanctions on organised criminal networks. 

Companies should ensure they build migrant smuggling and human trafficking into their business-wide risk assessments. This includes identifying higher-risk customer types, source and destination countries, industries (including mining), and products that could be exploited to support illegal migration and human trafficking. 

Financial firms should carry out supply chain and product due diligence — particularly on certain types of mobile banking, retail current accounts, and wholesale and corporate banking products that facilitate international trade. 

Banks, in particular, should work with clients in industries and countries that are at high risk of human trafficking and modern slavery, to enhance supply chain traceability measures. 

Firms should also consider developing training to ensure front-line staff can identify possible instances of migrant smuggling; where and how to report suspicions of migrant smuggling and human trafficking; and what information to include in reports. Specialist training should be developed for staff working in branches near border towns or towns known to have high traffic of illegal migrants — including guidance on how to interact with potential victims.  

On the technology front, transaction and payment monitoring systems should be updated regularly as emerging migrant and human trafficking typologies emerge. Once countries roll out their sanctions regimes, firms should ensure these are fed into their screening systems both at onboarding and on an ongoing basis — even if they are not national autonomous sanctions, as they could still be indicative of criminal activity — and as part of payment filtering systems. 

Where these are available, firms should join existing public-private intelligence networks by sharing information and by encouraging clients who are large social media providers or transport operators to share intelligence(where legally permissible) where there is suspicion of migrant smuggling taking  place.  

The second of this two-part report on the Kananaskis summit examining the G7’s proposals regarding illicit finance and international conflicts, high-risk countries and sanctions be published tomorrow.

Denisse Rudich is director of the G7 and G20 Research Groups (London) and CEO of Rudich Advisory, working at the intersection of global governance, technology, illicit finance and security. She is an associate fellow at the Royal United Services Institute (RUSI) and has attended numerous G7 and G20 Summits since 2001. 

Julia Kulik is director of research for the G7 and G20 Research Groups, based at Trinity College, University of Toronto. She has written on performance in the G7, G20 and BRICS, particularly on the issues of gender equality, global health and regional security, and has provided strategic advice to G7 and G20 engagement groups.