AML CHALLENGES
The characteristics of potential victims have
been identified and are widely publicized on
web sites dedicated to counter human trafficking. One list of victim red flag indicators
can be found at http://nhtrc.polarisproject.
org/call-the-hotline/identifying-human-trafficking-.html#who. Not surprisingly, research
was unable to uncover a published list of
transactional flags associated with human
trafficking which could be developed into a
suspicious activity indicator (SAI) for automated detection. What research did support
is the assertion that local law enforcers, not
AML investigators, are the most likely to
uncover human trafficking.6 So then, what
is known about human trafficking that may
aid in defining the financial transactions that
might accompany the activity?
• Human trafficking has been identified in
the following industries: domestic workers
(nannies, maids), landscaping, nail salons,
restaurants, industrial cleaning, construction, hospitality, magazine and flower sales,
agricultural, factories (garments etc).7
• The victims are not paid for their services or are drastically underpaid for their
services.
• Human traffickers are very often found
to be associated with other crimes (e.g.,
prostitution, pornography, domestic abuse,
battery and illegal businesses).
• Victims need not be “purchased” but may
be kidnapped or traded by parents or
another responsible party (e.g., pimp).
• Victims may be working to pay-off debts
that are generations old.
• Last year, the world imported and
exported billions of dollars in products
tainted by forced labor in manufacturing
and raw materials procurement, according
to the International Labour Organization
(ILO). Forced labor is also prevalent in
cotton, chocolate, steel, rubber, tin, tungsten, sugarcane and seafood industries.
The last three bullet points make “following
the money” in trafficking cases extremely
difficult. Kidnapped victims are the source
of future illicit funds which, if integrated into
the banking system through routine bank
deposits of a cash-intensive business, may
never be traced back to the original trafficking offense.
Victims working to pay-off debts that are
generations old, if working in a legitimate
business, would taint any profits arising from
the business. Similar to the last bullet, identifying that trafficked victims are being used
to generate raw materials or final products of
legitimate companies is a daunting proposition for any AML program. In all respects, the
funds flowing through the bank account of a
legitimate company would look untainted. The
business is operating as any business might.
One indicator, to which a bank AML investigator may not have clear line of sight, would
be if payroll taxes and/or payroll do not
matc