Moderator: Gregg Fields, CAMS, Senior Copywriter,...

Moderator:Gregg Fields, CAMS, Senior Copywriter, ACAMS

Speakers:Bassem Banafa, Financial Forensics Consultant

CPA, CFE, ABV, CGMA, CAMS, CFCS, CFF, EnCE, Bassembanafa.com

Keith Kolovich, Supervisory Special AgentHomeland Security Investigations (HSI)

Stevenson Munro, CAMS, Global Head of Economic Sanctions ComplianceStandard Chartered

Frederick Reynolds, Global Head of Financial Crime LegalBarclays

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Defining TermsWhat is Human Trafficking?

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Human Trafficking – Federal Law

• Sex Trafficking• A commercial sex act is induced by Force.• A commercial sex act is induced by Fraud.• A commercial sex act is induced by Coercion.

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• Sex Trafficking• Commercial and Sexual Exploitation of Children (CSEC)

• A commercial sex act is induced and the person induced to perform such act has not attained 18 years of age.

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• Labor Trafficking• Part 1

• Recruitment of a person • Harboring of a person • Transportation of a person • Provision of a person • Obtaining of a person

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• For labor or services through the use of Fraud.• For labor or services through the use of Force.• For labor or services through the use of Coercion.

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• For the purpose of subjection to Involuntary servitude.• For the purpose of subjection to Peonage.• For the purpose of subjection to Debt bondage.• For the purpose of subjection to Slavery.

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Case StudySex Trafficking - Tenancingo

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Sex Trafficking - Tenancingo

• CNN• “The town where boys are 'groomed to become pimps”

• BBC• “Tenancingo: the town sex trafficking built”

• The Guardian• “Tenancingo: the small town at the dark heart of

Mexico’s sex-slave trade”

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New York Daily News

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Sex Trafficking - TenancingoSex Trafficking - Tenancingo

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• Exploiting Data From Financial Systems• Classic AML Flags

• CTR Avoidance• Funnel Accounts• Bulk Cash Smuggling

• Specific Flags• Transaction Volume• Money Orders

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Banking Industry Response

Internal, NGOs, LEO, Public/Private Partnerships

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Banking Industry – High Level

• Know Your customer• Proactive identification of human trafficking “red flags.”

• Automated Detection• Continuous Analysis

• Ultimate Beneficial Owners• Geographic Risk

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• Granular Risk Analysis• Don’t broadly de-risk a country because it is “less risky.”

• Financial flows are the lifeblood of the economy and cutting them off wholesale only makes the problem worse.

• Focus on those risks you can control for.• Utilize all sources of information to conduct your

analysis if possible.

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• Cooperation with Government Authorities and other Banks

• Law Enforcement: Utilize 314(a).• Banks: Utilize 314(b).

• Rather than “whack a mole”, conduct targeted analytics with the government and other institutions to uncover Human Trafficking.

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Banking Industry – NGO Support

• Non-Governmental Organizations (“NGOs”)• Banks want to be part of this fight.

• Vilifying or shaming “good” banks that are trying to help is counterproductive.

• It will only produce de-risking and less visibility.• Provide Banks with actionable information.

• No one wants to bank human traffickers.• Often we inadvertently do because we lack the ability to tell a

legitimate business from an illegal one.• Contextual information is key.

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Banking Industry – LEO Support

• Law Enforcement Officers (“LEO”) and Agencies• Banks want to be partners and, by the way, we can keep

the information secure.• Share your targets so we can focus on where the government

sees our greatest value add.

• Utilize 314(a) to the fullest extent possible.

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Banking Industry – Government

• Government/Regulators• Balance the policy objectives.

• Financial inclusion and Transparency vs. Money Laundering Risk.

• If we totally de-risk, the money is harder to find and the problem harder to stop.

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Information Sharing Best Practices

Leveraging resources to fight human trafficking

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• In the course of day-to-day business, individual financial institutions generate and store financial transactional information in their own isolated systems.

• Independently, those data silos provide limited insight in identifying potential trafficking behavior.

• Human trafficking networks are firmly established enterprises collaborating together, working across borders and making use of numerous payment channels and different financial institutions.

Information silos limit the transfer of meaningful context to law enforcement

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Information Sharing Background

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Importance of Improved Sharing

• Promotes seamless sharing of information

o Common protocols and processes result in reduced information sharing costs and strengthened efficiency of an investigation.

• Enables better and more comprehensive analysis of activity

o Banks see a more complete picture of transactional activity and are consequently more likely to identify suspicious activity.

• Creates better intelligence products for Law Enforcement

Foundations of Information Sharing

• 314(b) requests can be sent from one participant to all participants, regardless of whether or not there is an existing “transactional nexus”

o Under business-as-usual processes, institutions generate 314(b) requests only when there appears to be a nexus

• Targeted 314(b) requests are made and higher quality responses received

• Such requests can contain a broad spectrum of data to include – subjects/entities/PII, full transactional details, intelligence products

• 314(b) requests will facilitate an improved ability of banks to detect potential illicit funds

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Collaborate to detect and report suspected human trafficking

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Practical Strategies for AML Officers

Incorporating trafficking monitoring into existing compliance protocols

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Human Trafficking AML Strategies

• There are hundreds of red flags available!• Pick 3.

• There are even more data points that are useful for law enforcement that are available.

• Pick 1.

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Domestic Sex Trafficking

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Sex Trafficking Red Flags

• Deposits.• Large Denominations/Low Overall Amounts.• Timing of Deposits.

• Unlikely Customers.• Children’s Tutoring Center in CA.• GoFundMe.

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Domestic Labor Trafficking

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International Labor Trafficking

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Domestic/Int’l Labor Trafficking

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Labor Trafficking Red Flags

• Handwritten Checks to Employees for round amounts.• Round amount cash withdrawals around paydays.• Paychecks to multiple Employees cashed at one location.• Shared Employee Addresses

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• No Worker’s Compensation Insurance• Certain states, typically searchable online

• Tax Liens• Suspension of Secretary of State Filings• Civil Litigation• State labor agency Liens• Frequent ownership changes

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Information Sharing

• Browser Fingerprinting.• Geolocation Data.• Social Media.• Operating systems.• Browser plugins.• Mobile device ID.• Tracking geography of card transactions.• Online account access patterns, use of cookies.

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Information Sharing

• Account opening email address.• Online access email address.• Marketing email address.• Old email address.• App store email address.• Internet Service Provider.• Telephone Company.• Efforts to Conceal (TOR, VPNs, Proxies).

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Information Sharing

• Account Audit Trails and Intermediary Bank Transactions

• These logs often contain bursts of activity around important dates (Account Opening, Reported Fraud, Account Closing, etc.)

• Timelines are critical in criminal investigations.

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What Can We Do?

As an Individual

• Find opportunities to engage with NGOs focusing on anti-human trafficking

• Learn to understand the connection between your purchases and forced labor (i.e. shrimp from Thailand)

• Purchase ethically sourced products

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What Can We Do?

• Corporate Culture• Staff Awareness• Conduct• Vision• Globalization

• Preventative Actions• Detection-AML

red flags in combination with specific knowledge (i.e. corridors and industries)

• Due Diligence• Training

• Innovative Programs

• Develop partnerships, consortiums and international coalitions on Anti-Human Traffickingto deter, detect and disrupt the sources and pipelines from and through human traffickers operate.

As a Bank

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What Can We Do?

As a Society

• Share Best Practices and Information

• Work with Law Enforcement and NGOs

• Prevent, identify, eliminate

• Economic stability• Raise awareness• Keep learning

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Conclusion

Be Diligent, Be Curious, Be Vigilant

Financial intelligence is a necessary component for counter-human trafficking activities. FIs can assist by sharing information through consortiums. FIs can assist by working with Law Enforcement and NGOs. FIs can assist by using public/public partnerships to enhance awareness of, and responses to, emerging risks and trends.

Presenter

Presentation Notes

Disrupting and dismantling terrorist financing networks is essential to combat terrorism. Terrorist organizations' diverse requirement for financing creates a strong logic for seeking to disrupt terrorism by choking off funding flows to all terrorist-linked activities. Interdicting these flows can degrade the capability of terrorist groups over time, limiting their ability to launch attacks, increasing their operational costs and injecting risk and uncertainty into their operations, which can have tactical benefits, such as: - Damaging morale, leadership and legitimacy within a network. - Forcing terrorist groups to shift activity into areas where they are more vulnerable, including areas that they would otherwise avoid.

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Moderator: Gregg Fields, CAMS, Senior Copywriter,...

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