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The Digital Economy: Potential, Perils, and Promises The Digital Economy: Potential, Perils, and Promises A REPORT OF THE DIGITAL ECONOMY TASK FORCE MARCH 2014 CO-CHAIRS ERNIE ALLEN International Centre for Missing & Exploited Children STEVE RUBLEY Thomson Reuters VICE-CHAIR JOHN VILLASENOR The Brookings Institution/UCLA TABLE OF CONTENTS 1 TASK FORCE LISTING 3 PREFACE 5 INTRODUCTION 10 PREVENTING SEXUAL EXPLOITATION OF CHILDREN: A MULTI-FACETED APPROACH 11 LAW ENFORCEMENT 16 REGULATION 20 INTERAGENCY COORDINATION IN THE UNITED STATES 26 CONCLUSION AND FINAL RECOMMENDATIONS 29 GLOSSARY The Digital Economy: Potential, Perils and Promises A REPORT OF THE DIGITAL ECONOMY TASK FORCE TASK FORCE ON THE DIGITAL ECONOMY CO-CHAIRS TASK FORCE MEMBERS Ernie Allen César Alonso-Iriarte President and Chief Executive Officer, DG Home Affairs, International Centre for Missing & Exploited European Commission Children Jerry Brito Steve Rubley Senior Research Fellow and Director of Technology Managing Director, Government Segment, Policy Program, Thomson Reuters Mercatus Center at George Mason University Don Codling VICE-CHAIR President, CGI-LLC John Villasenor Nonresident Senior Fellow, The Brookings Institution Marina Colby Professor of Electrical Engineering and Public Senior Counter-Trafficking in Persons Fellow, Center Policy, UCLA for Excellence on Democracy, Human Rights and Governance, United States Agency for International Development POLICY ADVISORY GROUP Julie Cordua Luis CdeBaca Executive Director, Ambassador-at-Large, Office to Monitor and Combat Thorn: Digital Defenders of Children Trafficking in Persons, U.S. Department of State Cindy Dyer Vice President, Human Rights, The Honorable Paula J. Dobriansky Vital Voices Senior Fellow, Harvard University Belfer Center for Science and International Affairs and former Under Kate Friedrich Secretary of State for Democracy and Global Affairs Vice President, Government Affairs, Thomson Reuters Frances Fragos Townsend Executive Vice President at MacAndrews and Tom Kellermann, CISM Forbes Holdings, LLC. and former Homeland and Managing Director for Cyber Protection, Counterterrorism Security Advisor, The White House Alvarez & Marsal Juan Zarate Scott McCleskey Senior Adviser, Senior Advisor, Transnational Threats Project and Homeland Security The Ethisphere Institute and Counterterrorism Program 1 The Digital Economy: Potential, Perils and Promises A REPORT OF THE DIGITAL ECONOMY TASK FORCE Sheila Miller ACKNOWLEDGEMENTS Program Officer, Financial Services for the Poor Global Policy & Advocacy, Nancy Dube Bill & Melinda Gates Foundation Executive Vice President & Chief Operating Officer, Kelley Misata International Centre for Missing & Exploited Director of Outreach, Marketing & Communications, Children The Tor Project, Inc. Judith Grabski Cody Monk Project Manager, Digital Economy Task Force, Special Agent, International Centre for Missing & Exploited Federal Bureau of Investigation Children Patrick Murck Eliza Harrell General Counsel, Marketing Manager, Bitcoin Foundation International Centre for Missing & Exploited Children Neil J. O’Callaghan Section Chief, Sandra Marchenko Homeland Security Investigations Director, Koons Family Institute on International Cyber Crimes Center, Child Exploitation Law & Policy, Investigations Unit International Centre for Missing & Exploited Children Xiomara Ramos-Bonakdar AML Compliance Officer, Ellie Moseley Citigroup Senior Consultant, Strategy, Policy & Regulation Deloitte Ron Rowe Assistant to the Special Agent in Charge, Katherine Sagona-Stophel United States Secret Service, Criminal Government Analyst, Research, Investigative Division – Cyber Intelligence Section Thomson Reuters Special Services, LLC Maria C. Stephens Jason Thomas Chief, Innovation and Strategy, Thomson Reuters Special Services, LLC Mark Witzal Deputy Assistant Director for the Financial Narcotics and Special Operations Division, Homeland Security Investigations Veronica Zeitlin Human Trafficking and Gender Advisor, United States Agency for International Development 2 The Digital Economy: Potential, Perils and Promises A REPORT OF THE DIGITAL ECONOMY TASK FORCE PREFACE In 2013, the International Centre for Missing & Exploited Among the conclusions of the conference: cross-sector Children (ICMEC) and Thomson Reuters joined forces to communication and collaboration is vital to address a lead an effort focused on exploring the benefits and risks worldwide response to the growing digital economy. The of the emerging digital economy. DETF approached key stakeholders, ranging from web industry leaders to law enforcement officials and advocacy In June 2013, we co-hosted a one-day conference to organizations, to assess the risks and advantages of the discuss these key issues, which for the first time convened digital economy with the goal of offering informative and thought leaders from academia, government, the financial timely recommendations for those who seek to understand and web services industries, as well as the nonprofit sector. its impact on our world. Our shared belief in the power of innovation brought these At the first meeting of the DETF, members agreed that stakeholders together to address the economic opportunities use of digital economy tools and technologies for the that arise from the digital economy while confronting illicit victimization of children is morally abhorrent and of urgent activities from money laundering, to the illegal drug and importance. From this point, we set out to frame the policy weapons trade, to human sex trafficking, and more. This was discussion in a manner that enables the digital economy to the birth of the Digital Economy Task Force (DETF) and the grow while creating an inhospitable environment for those ongoing discussion of several pressing topics. who seek to abuse it. We realize that piecemeal regulation can’t tackle a global issue, but we believe these initial The technological frontier of the digital economy presents recommendations can lead to a broader exploration of these countless opportunities and challenges for the public and issues beyond this report. private sectors, including for example, the potential to provide financial tools for more of the world’s poor who Our hope is that the recommendations contained in are currently “unbanked.” It is also evident that new forms this report can lead to a worldwide policy debate of the of payment and trade continue to emerge – including digital economy. We need to inform decision makers digital currencies, prepaid cards, and alternative payment and digital pioneers in order to develop new methods systems, among others – where anonymity reigns and their and mechanisms for addressing these groundbreaking growth has been left largely unchecked. technologies. And we must create a coordinated and thoughtful approach in light of this global, technological While the growth of the digital economy can lead to many revolution. Together we can ensure that the potential of benefits, it also opens the door to those who seek new and the digital economy is not exploited by those who seek to profitable avenues to perpetrate illicit activities. The child use it for harm. pornography and sexual exploitation industries, in particular, are moving outside of traditional economic mechanisms and Our global community deserves no less. into the shadows of the digital world. It’s on this central issue that the DETF has decided to focus their effort. Ernie Allen Steve Rubley President & CEO Managing Director, Government Segment International Centre for Missing Thomson Reuters & Exploited Children 3 The Digital Economy: Potential, Perils and Promises A REPORT OF THE DIGITAL ECONOMY TASK FORCE The International Centre for Missing & Exploited Children (ICMEC), together with Thomson Reuters, have assembled a task force of leading experts from academia, think tanks and the private sector, as well as government representatives, to discuss the impact of the digital economy on illicit activity, particularly the sexual exploitation of children. The views expressed in this Report do not necessarily reflect a consensus among the task force members, nor do they necessarily reflect the views of the public and private organizations for whom the various task force members work. The text (but not the images) in this Report is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. 4 The Digital Economy: Potential, Perils and Promises A REPORT OF THE DIGITAL ECONOMY TASK FORCE INTRODUCTION While improving the quality of life for people around the address their potential misuse by those who conduct unlawful world, advances in digital technology and the growth of the activities. digital economy have also led to a rise in illicit activities including drug trafficking, money laundering, human Identification occurs when identifiers are collected that trafficking, and sexual exploitation of children. provide sufficient assurance of who a person or thing is. The identifiers that are “sufficient” for any given interaction, Technologies that facilitate online anonymity, such as transaction, or relationship can vary widely depending on bulletproof hosting, anonymizing networks, and anonymous context. Many formal and interpersonal interactions are fully payments systems, offer a particular challenge: balancing “identified;” meaning that the parties know who each other their use for positive social impact against their potential are. Because these interactions are more memorable and misuse by those who perpetrate illicit activities. important, many
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