Rachel Dettmer
Rafi Aliya Crockett
Director, Financial Intelligence Unit, Polaris
Human trafficking and modern-day slavery are a pervasive, global issue, with the State Department revealing that more than 27 million people are victims of human trafficking in the United States alone.
While the financial sector is exposed to the risks of modern-day slavery through operations, supply chains, and business relationships, it also has a critical role to play in combatting it.
Human Smuggling, Human Trafficking, and Labor Trafficking: Understanding the Difference
What is Human Smuggling?
Under U.S. law, human smuggling is "the facilitation, transportation, attempted transportation or illegal entry of a person or persons across an international border, in violation of one or more countries' laws, either clandestinely or through deception, such as the use of fraudulent documents.” The main differentiator is that it's a crime against the State.
What are Human Trafficking and Labor Trafficking?
Human trafficking is the trade of humans for forced labor, sexual slavery, or commercial sexual exploitation, without consent. It's a crime against the individual, with forced labor being the most prevalent of the two.
“Trafficking happens 365 days a year, 24/7” – Rafi Crockett, Director, Financial Intelligence Unit, Polaris.
Some Top Financial Indicators of Trafficking
Some top financial indicators include:
- Low dollar transactions in P2P payment platforms
- Comments, emojis, keywords, or letters as payment references
- Payments occurring after midnight
- Buying and selling the same property every couple of months at an increased value
- Making hotel or accommodation reservations online, and then paying in cash on-site
- Same insurance agent, accountant, and bookkeeper across multiple, unconnected businesses
One thing to note – it’s not a matter of identifying any one of the above indicators that help investigators find traffickers, but rather the collective picture that may include a plethora of these indicators. Many of these perpetrators are going to do their best to cover their tracks, so it’s as much about understanding what you’re looking at as it is what you’re looking for from a collective perspective.
More Needs to Be Done to Address Trafficking
In June 2021, the Financial Crimes Enforcement Network (FinCEN) issued its National AML/CFT Priorities. Included in the Priorities for the first time were human trafficking and human smuggling.
So, what can financial service providers do about this problem? At the core, it's about developing relationships with clients that encourage cooperation and a shared sense of purpose.
There also needs to be a shift in how we view and treat victims of trafficking: "The keyword is survivors” – Doug Gilmer, Ph.D., SSA, Senior Law Enforcement Liaison, HSI, DHS Center for Countering Human Trafficking.
However, that's not to say that progress is not being made. Recently adopted legislation is making a dent in the way the financial crime compliance community can operate and approach dealing with the ramifications of this hideous crime.
As of the current writing of this article, the Debt Bondage Repair Act signed into law in late 2021, prohibits credit reporting agencies from reporting adverse credit information of a survivor of human trafficking that resulted from their being trafficked.
Additionally, two proposed bills are with Congress:
- Trafficking Survivors Relief Act of 2022 – To provide for the vacating of certain convictions and expungement of certain arrests of victims of human trafficking.
- Human Trafficking Survivor Tax Relief Act – To provide an exemption from gross income for mandatory restitution or civil damages as recompense for trafficking in persons.
There’s work left to do, and it’s up to us in large part to continue to find ways to support the collective efforts of NGOs, Financial Institutions, and Law Enforcement to truly take the fight to the traffickers around the world.
John Byrne, Executive Vice President and Chairman of AML RightSource Advisory Board commented with a note from the audience, “It shouldn’t matter whether it's 100,000 or one, the goal should be the same: Thwart the criminals.”
Related Resources for Financial Institutions
- Finance Against Slavery and Trafficking
- Modern Slavery Benchmarking Tool
- 2023 Trafficking in Persons Report
- UNODC Global Report on Trafficking In Persons
- Global Slavery Index
- Human Trafficking and What it Means for Ukraine
- Alert on Human Smuggling Along the Southwest Border of the United States
- Human Trafficking Prevention Month Toolkit 2024
How to Report Suspected Trafficking Activity
- DHS tipline or call +1 866-347-2423
- National Human Trafficking Hotline or call +1-888-373-7888
Human Trafficking Awareness Month
In late January, for Human Trafficking Awareness Month, our AML Voices Webinar focused on this global challenge. Our panel of experts had a robust discussion on what we have learned from government and private sector responses to suspicious transactions indicating potential trafficking and other relevant typologies.
Christopher Bagnall, Solutions Director, Quantexa, emphasized the importance of collaboration: “Don't be afraid to ask for help.” The group also recommended partnering with your local NGOs, highlighting their ability to provide valuable data and guidance to financial institutions.
Likewise, our experts have encouraged an open dialogue, feel free to connect with them below.
