Human trafficking, second only to drug trafficking, stands as one of the fastest-growing illegal enterprises worldwide. If we look beyond the immense human costs, it becomes evident that where human trafficking occurs, money changes hands. Law firms can play their part by serving as another line of defence against these terrible crimes by understanding how to spot the signs of human trafficking.
Given the huge scale and pervasiveness of human trafficking, it’s essential for businesses to be proactive in identifying and addressing this issue within their supply chains. By not understanding how to identify the signs of human trafficking, we can inadvertently expose ourselves to significant risks. It falls upon all of us to make a collective decision not to let this happen on our watch, and to be alert to the red flags that indicate where human slavery may be taking place.
In this article, we’ll delve into the critical topic of how to spot the signs of human trafficking. As compliance officers and lawyers, your role in combating this heinous crime and its connection to money laundering is vital. By familiarising yourselves with the signs, you can contribute to early detection and intervention, making a difference in the fight against human trafficking.
The true extent of human trafficking
The true scale and cost of the crime is unknown. The Centre for Social Justice estimates that there are around 100,000 people in the UK in modern slavery, but this figure could just be the tip of the iceberg.
An annual report from anti-slavery charity, Unseen, shows a 116% increase in calls to its UK Modern Slavery & Exploitation Helpline in 2022 compared to 2021.
These figures present a bleak reality, exposing the widespread presence of human trafficking in our society. It’s a crime that operates ‘hidden in plain sight’, often occurring right before our eyes.
The link between money laundering and human trafficking further amplifies the urgency of addressing this issue. A joint report by the Financial Action Task Force (FATF) and the Asia/Pacific Group on Money Laundering (AGF) revealed that this form of crime generates an estimated $150 billion in illicit profits annually. This is a staggering increase of $32 billion compared to a previous report in 2011. These profits stem from the criminal enslavement and exploitation of individuals worldwide.
The breeding ground for human trafficking lies in the demand for cheap goods, cheap labour, and cheap sex. This exploitative industry thrives on the vulnerability of its victims and perpetuates their suffering. Shockingly, it remains one of the world’s most under-reported crimes, with countless victims suffering in silence.
Efforts to combat human trafficking have included innovative campaigns, such as the app campaign supported by London’s 10,000 Taxi Drivers. This initiative aimed to eradicate modern slavery in hand car washes by equipping drivers with indicators of forced labour through an app. By raising awareness of the signs of human trafficking and empowering individuals to identify these signs of exploitation, we can collectively work towards dismantling human trafficking networks and providing support to those in need.
Understanding the link between human trafficking and money laundering
Before we dive into the signs of human trafficking, it’s crucial to grasp the intricate connection between this heinous crime and money laundering. Criminals who engage in human trafficking have a sinister objective not only to exploit vulnerable individuals, but also to conceal the illicit proceeds generated from their abhorrent practices. This is where money laundering comes into play, serving as a tool for these criminals to disguise the origins of their ill-gotten gains and make it exceedingly challenging for law enforcement agencies to trace and intervene.
Money laundering serves as a critical enabler for human trafficking networks, allowing them to legitimise their illegal profits and integrate them into the formal financial system. By laundering the money, traffickers can create a façade of legitimacy, making it difficult to distinguish between the proceeds from their criminal activities and lawful financial transactions.
By linking human trafficking and money laundering, criminals not only profit from their exploitative activities, but also further perpetuate the cycle of abuse. The vast amounts of money generated from trafficking are used to fuel other criminal enterprises, perpetuating a cycle of crime that spans across borders and jurisdictions.
Understanding this intricate connection between human trafficking and money laundering is essential for law firms. By recognising the signs of human trafficking, you can also be on the lookout for potential money laundering activities intertwined with this crime. Identifying and reporting suspicious financial transactions or patterns, you enable you to become an essential part of the collective effort to disrupt and dismantle these criminal networks.
Understanding the types of human trafficking
Human trafficking involves the deplorable trade of individuals, exploiting them for various purposes, including forced labour, sexual slavery, or commercial sexual exploitation, all serving the interests of the traffickers or others involved.
The scope of human trafficking extends to horrifying practices such as forced marriages, organ trafficking, and even people smuggling. By understanding the different types of human trafficking, we can better identify the signs and take appropriate action. There are six primary types of human trafficking.
1. Trafficking for forced labour
This type of trafficking involves the coercion or deception of individuals for forced labour, often in industries such as agriculture, construction, domestic work, manufacturing, or the service sector. Victims are subjected to exploitative working conditions, long hours, minimal pay, and restricted freedom.
2. Trafficking for forced criminal activities
Traffickers may force individuals, including children, into criminal activities such as drug trafficking, theft, or begging. These victims are often vulnerable and coerced through threats, manipulation, or violence, to participate in illegal activities against their will.
3. Trafficking for sexual exploitation
This form of trafficking primarily targets women and girls who are coerced or deceived into engaging in commercial sexual activities against their consent. Victims are subjected to physical and emotional abuse, exploitation, and a loss of autonomy over their bodies and lives.
4. Trafficking for the removal of organs
Human trafficking for organ removal involves the illegal trade of organs and tissues, often through the coercion or abduction of individuals. Traffickers exploit the desperation of those in need of organ transplants, causing immense harm to the victims and risking their lives.
5. Forced marriages
Traffickers can also exploit vulnerable individuals by forcing them into marriage. Victims can be used in this way for the benefit of others who want to enter a country or get access to benefits. It often involves sexual exploitation or servitude.
6. People smuggling
People smuggling refers to the facilitation of illegal entry or transportation of individuals across borders, often involving unauthorised and unsafe means. While distinct from human trafficking, it’s important to recognise the potential overlap, as vulnerable individuals may be subjected to exploitation and abuse during the smuggling process.
By familiarising ourselves with these different types of human trafficking, we can broaden our understanding of the breadth and depth of this horrendous crime.
The signs of human trafficking
Identifying the signs of human trafficking is important. There are some specific red flags that lawyers and compliance offices should be aware of when it comes to human trafficking and money laundering.
While these indicators aren’t definitive proof, they can raise suspicion and warrant further investigation. Here are some potential red flags to keep in mind.
1. Financial transactions
There are a number of red flags to look out for in financial transactions, such as:
- High volume deposits through bank accounts and immediate withdrawals from border towns
- Ongoing ATM/ credit card transactions in even amounts between 10pm and 6am
- Credit card payments to online escort services for advertising
2. Business account activity
When looking at the activity of a business account, signs may include:
- Sudden activity changes in business accounts outside of the client’s expected profile
- Structured cash deposits at multiple ban branch locations
3. Employment practices
Red flags in employment practices may include:
- Workers’ contracts not readily available in a corporate transaction
- Observations during client visits, such as the employment of large numbers of migrant workers or the presence of children in and around the premises
4. Behavioural signs
There are behavioural signs that may cause suspicion, such as:
- Signs such as fearfulness, avoiding eye contact
- Hesitancy to talk to strangers
5. Physical signs
Certain physical signs of victims may also cause suspicion, as victims may:
- Appear to be isolated and rarely allowed to travel on their own
- Not possess passports or identification documents that would allow them to travel freely
6. Financial data and due diligence
Law firms that hold financial data as part of their anti-money laundering (AML) checks or during due diligence on a transaction may have an opportunity to spot red flags and gather information that could provide a clearer picture of a potential criminal or money launderer.
Being alert to the signs of human trafficking is crucial in combating this horrific crime and its connections to money laundering. By familiarising yourself with the potential red flags and incorporating them into your compliance efforts, you can contribute to the early detection and prevention of human trafficking activities.
If you suspect any form of modern slavery is taking place within your supply chain, or you suspect your client may be involved, flag it immediately with the person responsible for dealing with it at your firm.
Educating your team and enhancing due diligence
Ensure that your compliance team receives comprehensive training on the signs of human trafficking. By integrating these best practices into your due diligence processes, you can further mitigate the risk of inadvertently supporting human trafficking or money laundering activities.
You have a crucial role in combating human trafficking and its connection to money laundering. By familiarising yourself with the signs of human trafficking, reporting suspicious activity, and promoting awareness within your organisation, you contribute to a safer society and uphold the values of legal compliance. Remember, every action counts, and together we can make a difference. Stay vigilant, stay informed, and let’s end human trafficking.
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