• Mon. Oct 3rd, 2022

FCC Training Corner: Fighting Human Trafficking – Strengthening Investigative Skills, Improving Compliance Knowledge, Rules Effectiveness, Roles and Outcomes – CFCS

ByJanice K. Merrill

Jan 12, 2022

For compliance professionals responsible for the disposition of SAR alerts/investigations/filing:

An overview of regional and transnational traffic routes and potential intersections with a bonus through the prism of crypto exchanges

Human trafficking groups are usually savvy when it comes to obscuring the financial trail.

In some cases, they will purchase prepaid cards from retailers below identity transaction thresholds, use those cards to purchase virtual currency, and then use those funds to purchase classified ads and advertisements on escort sites and of darknet prostitution.

Banks should also, as part of their due diligence on direct virtual exchange customers or even exchanges depositing and withdrawing customer and corporate accounts, assess the risk of these exchanges through the perspective of centers human trafficking regions, including countries of origin, transit routes and destination jurisdictions .

This could help an institution understand when a virtual exchange might — consciously or unknowingly — transact heavily with regions and entities at higher risk of human trafficking or display related red flags.

A recent FATF report highlighted how and where traffickers trap victims in a given region, as well as international funding and body flows. Here is a snapshot:

Regional traffic

Transnational trafficking flows are increasingly complex – victims are exploited within and across regions.

While many countries are source and destination countries, most countries tend to be either primarily a source or primarily a destination of trafficked persons.

The United Nations Office on Drugs and Crime (UNODC) found that most of the victims detected were trafficked within the same geographic region.

For the majority of detected victims of transnational trafficking identified in the UNODC study, the country of origin was in the same geographic region as the destination, which includes internal trafficking.

Common regional trafficking flows include trafficked victims from Southeast Europe to Western Europe, Andean countries to the Southern Cone in South America, East Asia to the Pacific, or victims trafficked across a single international border to neighboring countries.

Cross-regional traffic

In cross-regional trafficking, countries with developed economies remain key destinations, while victims tend to come from countries with less developed economies.

UNODC found that the Middle East, along with most countries in Western and Southern Europe and North America, reported to be destinations for cross-regional and long-distance traffic.

In particular, they found that the wealthier the country of destination, the higher the number of victims detected outside the immediate region.

In Western and Southern Europe, the victims detected had 137 different nationalities, including Central and South-Eastern Europe (47%), Sub-Saharan Africa (16%) and East Asia ( 7%).

Similarly, North American countries have detected victims in more than 90 countries of origin.

The largest cross-regional trafficking flow in the study came from East Asia, as 16% of victims detected in North America are citizens of East Asian countries.

Victims of trafficking from countries in sub-Saharan Africa and East Asia are trafficked to the greatest number of destinations. UNODC found that 69 countries reported detecting victims from sub-Saharan Africa between 2012 and 2014.

To read the full FATF report, click on here.