The Financial Crimes Enforcement Network (FinCEN) has issued an advisory to help combat human trafficking and the financial crimes that accompany it. This new advisory seeks to supplement a previous advisory that the authority had issued in 2014. Now, through a collaboration with law enforcement authorities, FinCEN has identified as many as 20 new financial and behavioral indicators of human trafficking.
To evade detection and conceal their illicit funds, human traffickers have started using front companies, exploitative employment practices, funnel accounts etc. Since victims of human trafficking are less likely to have regular contact with the outside world, it is important that financial institutions identify both behavioral and financial indicators when enabling transactions. Behavioral indicators could include a third party taking over the paperwork without consulting the customer or a third party that does not know important information about the customer even though it claims to be acting on their behalf. Other behavioral indicators could include a customer who exhibits symptoms of ill-health, malnourishment, abuse or torture, or one who is visibly confused or inconsistent when questioned.
Financial indicators of human trafficking include frequent transaction from different geographical locations including foreign countries, payments that do not match a customer’s expected activity, transactions conducted at irregular times, etc. Overall, FinCEN has advised that financial institutions must identify beneficial owners as part of customer due diligence, share information with other financial institutions and authorities, and promptly report suspicious activity to combat human trafficking and related financial crimes.
Source name: FinCEN