One of your costumers calls your contact center and complains about a rejected wire transaction. She explains that she is from a low-income family, and she was instructed by a “Recruitment Agent” to wire a "processing fee" as soon as possible. This "Recruitment Agent" contacted her on social media and has asked for her photos.
She insists that she does not want to miss out in this opportunity and her “Agent” already purchased her a one-way ticket, and has a copy of her passport. The “Agency” also provided her with accommodation in a luxurious apartment, and a 5,000 EUR/month tax-free offer. She is planning on going to an English speaking country, but she does not speak the language, because “it’s not necessary”. She already signed a few documents in English.
What is the right thing to do for an AML/Fraud officer? Taking this information into consideration, she is very likely to end up as a victim of human trafficking, forced labor and sexual exploitation. Banking staff has moral responsibility to educate customers and raise risks to prevent them to be a victim of such crimes.
Did you know that funds associated with human trafficking and modern slavery are estimated to be in the 150 billion USD range on an annual basis? It is the third largest source of criminal profit on a global level.
This is unarguably a global phenomenon, and anyone can be a victim regardless of age, sex, religion, sexual orientation or citizenship. Nevertheless, children and women, and those from developing countries are more exposed to this risk.
The Association of Certified Anti-Money Laundering Specialists (ACAMS), which is the largest international membership organization dedicated to enhancing the knowledge and expertise of financial crime detection and prevention professionals, dedicated a lot of resources to significantly increase awareness, within and outside its community. Thus our financial sector has a great responsibility to prevent, and detect these illegal activities.
What can be done by banks or non-banking financial institutions?
Most funds generated by these crime rings flows through our financial systems. These organizations probably have the most insight through the data provided to them through the accounts held by potential victims, and criminals alike. Financial Institutions also have the responsibility to screen both domestic, and international payments in accordance with the sanction provisions brought against notorious human trafficker.
The following key considerations may help further reduce the risks that enable criminals to circumvent global AML practices.
Financial Institutions must assess, and control the risk that exposes them to Human Trafficking and Modern Slavery.
Refresh the KYC/CDD training agenda so the first line of defense can successfully identify indicators of Human Trafficking and Modern Slavery.
Develop, or extend organizational, and client screening processes to include Human Trafficking as a focus area.
Incorporate scenarios to your current AML transaction monitoring specifically dedicated to detecting Human Trafficking, and Modern Slavery. Look for the known red flags!
Connect with local FIUs, or other law enforcement agencies, and find the most effective way to report suspicious events, or questionable transactions.
Human Trafficking is often described as a crime-in-a-crime, and is linked to a number of other criminal activities; including illicit financials, fraudulent travel documents, drug trafficking and cybercrime. So fighting against this despicable activity will also serve a broader purpose.