The Financial Transactions and Reports Analysis Center (FINTRAC) of Canada recently issued an Operational Alert to help reporting entities identify financial transactions that could be related to the laundering of funds associated to child sexual exploitation, particularly that perpetrated through online means. This Operational Alert also lists ML indicators and Suspicious Transaction Reports (STRs) related to online child sexual exploitation.
Perpetrators of child sexual exploitation are misusing technological advancements to increase the production and consumption of child sexual exploitation material. These offenders are using encryption services, anonymization technologies and online file hosting and sharing to conceal their identities and activities. Moreover, the COVID-19 pandemic has led to an increase in the consumption and production of child sexual exploitation material.
FINTRAC analyzed several STRs related to online child sexual exploitation. The analysis revealed that the perpetrators were mostly males working in a wide range of occupations and primarily in their 40s and 50s. They were largely involved in transferring funds to jurisdictions designated high-risk for child sexual exploitation. Notably, the most frequent recipients of such funds were Philippines, Thailand, Colombia, United States, Ghana, Ukraine, Dominican Republic, Romania, Jamaica and Russia.
From its analysis, FINTRAC has compiled a list of the indicators of ML related to online child sexual exploitation. Some of these indicators are: transactions related to someone charged with child sexual exploitation-related offenses, repeated transfer of small funds to one or more females in high-risk jurisdictions without any legitimate connection with the recipient(s); purchases on adult entertainment webcam/live streaming platforms or other such websites; payments for a self-storage facility and/or office rentals; etc. Other indicators include payments to vendors that offer software for peer-to-peer video/image sharing platforms or capturing video from websites; payments for hotels/motels in the individual’s own city or in a nearby city; purchases at youth-oriented live online chat rooms; etc. FINTRAC has advised that these indicators be used in conjunction with other sources of information to assess any suspicious activity.
Source: FINTRAC, Canada