Financial Crimes and Environmental Sustainability: A Game Theory Model of Illegal Fishing and Its Financial Ecosystem

Illegal, unreported, and unregulated (IUU) fishing poses a substantial risk to marine ecosystems, biodiversity, and global economic stability, especially in areas reliant on fisheries. Intricate financial networks often enable the unlawful monetary transfers linked to illegal, unreported, and unregulated (IUU) fishing, while inadequately supervised banking institutions obscure the origins of the profits. This article examines the critical role of financial institutions and banks in addressing IUU fishing by detecting dubious transactions indicative of money laundering, corruption, and other financial offences. This research use game theory to provide a mathematical framework that simulates the strategic interactions of primary parties, such as financial institutions, regulators, illicit fishing enterprises, and enforcement organisations. The results highlight the need of collaboration between financial institutions and regulatory agencies in overseeing, identifying, and mitigating financial crimes associated with environmental degradation. The use of game theory underscores the potential for improved financial regulation and collective accountability to markedly diminish illicit fishing practices and foster environmental sustainability.