Earlier this year, the Financial Action Task Force (FATF) together with the Asia Pacific Group on Money Laundering (APG) published a report analysing the financial flows associated with human trafficking.
The report:
- summarises indicators of financial transactions that are laundering the proceeds of human trafficking (e.g. multiple wages being paid into one account, rapid in/out transactions following receipt of wages);
- identifies challenges and good practices in detecting, investigating and prosecuting money laundering from human trafficking;
- explores the links between human trafficking and other crimes such as terrorist financing; and
- proposes further partnership between the private and public sectors to detect laundering of the proceeds of trafficking.
The report comes as financial institutions continue to review the effectiveness of their due diligence and transaction monitoring processes with respect to modern slavery and other human rights risks, in part in response to laws such as the UK Modern Slavery Act. The guidance to that legislation, published by the UK Home Office, makes specific reference to transaction-related modern slavery risks for banks and other financial institutions.
In late September 2018, the UN also called on financial institutions to do their part in detecting and disturbing financial flows associated with human trafficking given their pivotal role in handling funds generated by such practices and their access to important financial data. As a result, the Government of Liechtenstein, the Australian Government Department of Foreign Affairs and Trade, and the Centre for Policy Research at the UN University set up the Financial Sector Commission on Modern Slavery and Human Trafficking. The initiative brings together leaders from across the financial sector, global regulators, survivors of human trafficking and NGOs with the aim of identifying specific areas where the sector can take action to curb these human rights violations.