Financial Institutions on Frontline Against Human Trafficking – FATF

Countries must assess risk of human trafficking and laundering of its proceeds, and share this information with stakeholders; partnerships with private sector – financial institutions in particular – are key.

The FATF (Financial Action Task Force) has released a new report providing indicators to help identify launderers of human trafficking proceeds and best practices to help countries develop measures to address money laundering and terrorist financing from human trafficking.

According to the International Labour Organisation, forced labour generates USD 150 billion per year, up from USD 32 billion in 2011, making it one of the most profitable and fastest growing proceeds-generating crimes in the world.

The FATF and APG (Asia/Pacific Group on Money Laundering) jointly undertook a study to improve global understanding of the financial flows associated with the crime of human trafficking, both as a money laundering predicate and potential source of terrorist financing. The report provides a more precise set of global money laundering indicators for use by reporting entities, financial intelligence units and other national authorities in combating human trafficking.

“Innovative initiatives at the national or regional level have demonstrated how anti-money laundering and counter-terrorist financing measures, and those that implement them, can contribute to stopping this crime,” it said. “However, globally, there has not been sufficient focus on how to use financial information to detect, disrupt and dismantle human trafficking networks.”

The report provides tangible ‘red flag’ indicators to help identify those who are laundering the proceeds of human trafficking, as well as best practices to help national authorities develop effective measures to address money laundering and terrorist financing from human trafficking.

“As human trafficking can happen in any country, it is important that countries assess how they are at risk of human trafficking and the laundering of the proceeds of this crime, share this information with stakeholders and make sure that it is understood,” the report said.

“Countries should also build partnerships between public sector, private sector, civil society and non-profit communities to leverage expertise, capabilities and partnership. The private sector, and financial institutions in particular, are on the frontline.”

The FATF acknowledged the support of several financial institutions and associations (Barclays, Standard Chartered Bank, Citibank, HSBC, Western Union, the Wolfsberg Group and others) and NGOs (Liberty Asia, Stop the Traffik and others) in developing the report.

The full report is available here.

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