AML

Human trafficking is one of the fastest-growing illegal enterprises in the world, after drug trafficking.

Human trafficking is the trade of humans for the purpose of forced labour, sexual slavery, or commercial sexual exploitation for the trafficker or others. This may encompass providing a spouse in the context of forced marriage, or the extraction of organs or tissues, including for surrogacy and ova removal. (Wikipedia)

 The statistics show the true extent of the problem. According to the charity Unseen, it is estimated that:

• 3 million people worldwide are in modern slavery
• 9 million are in forced labour
• 4 million people are in forced marriages
• Globally it is estimated that one in four victims of modern slavery are children
• In the UK just under half of the referrals to the National Referral Mechanism (47%) were individuals who claimed they were exploited as children
• around 13,000 people in the UK are in modern slavery, according to the UK Government
• up to 136,000 people in the UK are in modern slavery, according to slavery experts (i.e., much more than official figures).

“Hidden in plain sight” is a term often used when people talk about modern slavery – with the crime often taking place right in front of us.

Some of you may have seen the “hidden in plain sight” poster campaign a few years ago inside taxis which attempted to educate the public on just this point and highlight that human slavery was often taking place under our noses.

What can you do?

If we look beyond the human costs, where there is human trafficking money changes hands, which can present money laundering exposure for law firms.  This is where firms can play their part by serving as another line of defence against these terrible crimes.

Given the huge scale and pervasiveness of human trafficking, businesses can inadvertently expose their business to risk unless they seek to identify and tackle the issue in their supply chain.

We all need to decide that we won’t let this happen on our watch and be alert to the red flags which indicate where human slavery may be taking place.

“You should ensure that your business adopts policies and procedures designed to highlight these red flags so that all staff know what to look out for.”

 Clearly some red flags are more relevant to financial services businesses (such as banks) than to law firms, but it is useful to understand how we can identify where this type of crime is taking place.

There are six types of human trafficking:

• Trafficking for forced labour
• Trafficking for forced criminal activities
• Trafficking in women for sexual exploitation
• Trafficking for the removal of organs
• People smuggling.

Some Potential Red Flags of Human Trafficking:

High volume deposits through bank accounts and immediate withdrawals from border towns Ongoing ATM/credit card transactions in even amounts between 10 PM and 6 AM Credit card payments to online escort services for advertising.

Sudden activity changes in business accounts outside of the client’s expected profile Structured cash deposits at multiple bank branch locations.

Workers’ contracts not being readily available in a corporate transaction. If you are required to visit a client’s premises, do they employ large amounts of migrant workers or are children seen in and around the premises?

Look for behavioural signs – does, for example, someone look frightened? Avoiding eye contact, hesitant to talk to strangers.

Look for Physical signs – they appear to be isolated, they’re rarely allowed to travel on their own, they don’t have documents that would allow them to travel – passports, ID, etc.

Where a law firm holds financial data as part of its AML checks or when undertaking due diligence on a transaction, this may provide an opportunity for law firms to spot red flags and provide a picture of a criminal or launderer.

The message is simply to be alert to this horrific type of crime.

If you suspect any form of modern slavery is taking place within your supply chain or you suspect your clients may be involved, you should immediately flag it to the person responsible for dealing with it at your firm.

If Teal Compliance can be of any assistance in helping with your reporting obligations and procedures, please contact us at hello@tealcompliance.com