Financial Action Task Force Groupe d’action financière FATF Report Money Laundering Risks Arising from Trafficking in Human Beings and Smuggling of Migrants July 2011 THE FINANCIAL ACTION TASK FORCE (FATF) The Financial Action Task Force (FATF) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering and terrorist financing. Recommendations issued by the FATF define criminal justice and regulatory measures that should be implemented to counter this problem. These Recommendations also include international co-operation and preventive measures to be taken by financial institutions and others such as casinos, real estate dealers, lawyers and accountants. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard. For more information about the FATF, please visit the website: WWW.FATF-GAFI.ORG © 2011 FATF/OECD. All rights reserved. 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Money Laundering Risks Arising from Trafficking in Human Beings and Smuggling of Migrants – July 2011 TABLE OF CONTENTS LIST OF ABBREVIATIONS ......................................................................................................................... 5 EXECUTIVE SUMMARY ............................................................................................................................. 6 INTRODUCTION ........................................................................................................................................... 8 Scope .................................................................................................................................................. 8 Objectives ........................................................................................................................................... 8 Methodology ....................................................................................................................................... 9 Structure of the report ....................................................................................................................... 10 CHAPTER I: SCOPE OF THE STUDY .......................................................................................... 11 1. Nature of the problem ............................................................................................................... 11 a) Definition of trafficking in human beings ......................................................................... 11 b) Definition of smuggling of migrants ................................................................................. 11 c) Differences and similarities between trafficking in persons and smuggling of migrants . 11 d) Profiling the traffickers/smugglers .................................................................................... 12 e) Risk sectors ....................................................................................................................... 13 2. Scale of the problem ................................................................................................................. 14 a) Statistics on trafficking in human beings .......................................................................... 14 b) Statistics on smuggling of migrants .................................................................................. 15 c) Estimate of the proceeds ................................................................................................... 16 d) STRs statistics ................................................................................................................... 17 3. Countries of origin, transit and destination ............................................................................... 18 a) General findings on trafficking in human beings: ............................................................. 18 b) General findings on smuggling of migrants ..................................................................... 23 CHAPTER II: ANALYSIS OF THE QUESTIONNAIRE AND CASE STUDIES ........................ 26 1. Competent authorities (questions 1 and 2) ................................................................................ 26 a) In trafficking in human beings/smuggling of migrants ..................................................... 26 b) In money laundering of trafficking in human beings/smuggling of migrants ................... 27 2. Sources for detection of money laundering (question 3) .......................................................... 27 3. Trends detected (question 4) ..................................................................................................... 27 4. Analysis and investigations (Questions 5 and 6) ...................................................................... 29 5. Obstacles (question 7) ............................................................................................................... 29 a) Limited international cooperation ..................................................................................... 30 b) Lack of awareness or concern from law enforcement/prosecution authorities ................. 30 c) The difficulty to detect funds ............................................................................................ 30 6. Indicators (question 8) .............................................................................................................. 30 7. Case Studies .............................................................................................................................. 31 © 2011 FATF/OECD - 3 Money Laundering Risks Arising from Trafficking in Human Beings and Smuggling of Migrants – July 2011 CHAPTER III: KEY FINDINGS ..................................................................................................... 38 1. To assess the scale of the problem ............................................................................................ 38 2. To identify different trends in trafficking in human beings/migrant smuggling ....................... 38 3. To identify from case studies where money laundering is occurring and what form it is taking ........................................................................................................................................ 38 4. To inform law enforcement agencies on the laundering of funds coming from human trafficking/smuggling ................................................................................................................ 39 5. To identify red flag indicators to assist financial institutions in their identification of money laundering from human trafficking/smuggling and in the reporting of STRs ............... 40 a) For Banks .......................................................................................................................... 40 b) For Money Service Businesses ......................................................................................... 41 c) For Dealers in High Value Goods ..................................................................................... 41 d) For Casinos........................................................................................................................ 41 6. To increase the possibility of the proceeds of human trafficking/smuggling being identified and confiscated, and thereby discouraging the activity of human trafficking or migrant smuggling .................................................................................................................... 41 CHAPTER IV: CONCLUSION – ISSUES FOR CONSIDERATION ............................................ 43 1. Statistics .................................................................................................................................... 43 2. Judicial Focus............................................................................................................................ 43 3. Cooperation ............................................................................................................................... 43 4. Prioritisation and Level of Resourcing ..................................................................................... 44 5. FATF Recommendations .......................................................................................................... 44 ANNEXES........................................................................................................................................ 45 4 - © 2011 FATF/OECD Money Laundering Risks Arising from Trafficking in Human Beings and Smuggling of Migrants – July 2011 LIST OF ABBREVIATIONS AFP Australian Federal Police APG Asia Pacific Group ARTIP Asia Regional Trafficking in Persons project CoE Council of Europe CRS US Congressional Research Service Egmont Group The Egmont Group of Financial Intelligence Units ESAAMLG Eastern and South African Anti Money Laundering Group FATF Financial Action Task Force FIU Financial Intelligence Unit GIABA Groupe Intergouvernemental d‟Action contre le Blanchiment d‟Argent (Inter Governmental Action Group against Money Laundering in West Africa) GIFCS Group of