Last week I was able to attend the roll-out of a new report by the leader in anti-human trafficking, Polaris. The report, “On-Ramps, Intersections, and Exit Routes: A Roadmap for Systems and Industries to Prevent and Disrupt Human Trafficking” is the sequel to their last report on trafficking typologies. The new report, according to CEO Bradley Myles, covers the intersections of the previous posted typologies. Myles offered that there have been great strides in the efforts of the private sector over the past few years but as this new information clearly shows, there are still many unwitting partners in both the private and public sectors that enable trafficking to be still profitable and possible. He is right of course, but I would add that the dramatic proactive work of the financial sector in the AML community is not as well-known beyond the folks of Polaris.
That needs to change as the US Congress is contemplating legislation requiring obligations on the financial sector regarding human trafficking because just perhaps they are unfamiliar with the history of effort, at least over the past 8 years.
There are six areas of covered industries in the report and I would urge a reading of all, but this will focus on the financial sector now. In a “systemic change matrix” in the report, it depicts 25 major types of trafficking and sadly the financial sector is involved with 22. The encouraging news for the AML community is that with the survey data Polaris has compiled directly from survivors and focus groups, gives practitioners insight into financial red flags and can be incorporated into training and compliance programs. For example, the financial indicators that occurred during exploitation include:
There are also sections in the financial services portion that shed light on financial patterns in illicit massage parlors, cantinas, organized residential brothels, multi-victim labor trafficking types and with domestic work. Polaris has recently focused on labor trafficking and the report has listed some new areas for financial review such as describing situations where traffickers of domestic workers sometimes escort the victim to the financial institution to make deposits and cash checks. Also, victims are frequently pressured to list their traffickers on their bank accounts and that allows the traffickers to block the victim’s access to the account and/or withdraw money at any time.
As I have mentioned many times, the financial sector has accomplished quite a bit toward the anti-human trafficking challenges we all face. However, the AML community will continue to embrace recommendations as long as they are actively consulted and allowed to innovate with their responses. Polaris has offered a series of public-private recommendations for the financial sector that we need to consider and participate in any necessary debate. Specifically, there is a call to regulators to allow the financial sector flexibility “to adapt their practices to address a rapidly evolving crime.” Another area that needs active discussion is the recommendation to “leverage investment and lending systems to address slavery.” In a very dramatic and controversial recommendation, Polaris offers that given the influence of the financial sector, consideration should be given to “require clients in high risk sectors to take proactive measures to mitigate risks through their investment terms.” Given the ongoing issues with de-risking, asking banks to police their clients, while admirable, could result instead in having entities lose financial relationships due to an abundance of caution. In any event, this area deserves further discussion.
Please review all of the ideas listed but I would point out that the recommendation to policy makers to provide a safe harbor for NGOs to enable additional information sharing with the financial sector and law enforcement can easily be the most important recommendation in the entire report.
Polaris is to be commended for their ongoing work and clearly we can all “get together” and continue our goal of assisting survivors and victims while punishing those that harm our communities.
Note:
I am excited to be able to continue offering my thoughts and strategies here after many years with the Banking Exchange. I want to note the great work of their editor Steve Cocheo, whom I have been fortunate to work with for more years than we both care to remember. Steve has moved on and with my role here at AML RightSource, I will continue to give you the broad coverage of AML as it impacts all of us, with a little music thrown in. Cheers
* Get Together or Let’s Get Together, as it was also known in different cover versions, had a varied history in music. The most well-known version was by The Youngbloods in 1967 and its more successful re-release in 1969. The song was written by singer-songwriter Chet Powers and has appeared in movies, television and a number of commercials but was originally a plea for peace.