In a modern world in which globalization has connected both economies and societies, the scourge of human trafficking is a hidden activity that drives illicit profits in the shadows of global commerce
Almost 50 million people are currently living under human trafficking conditions, a form of modern slavery that includes forced labor, forced marriages, and sexual exploitation. Of the 28 million people living in forced labor conditions, women and children are disproportionately affected, with one-in-eight trafficked persons tragically being children.
Unfortunately, human trafficking is also not simply a human rights crime, it is also a financial crime that undermines economies and national security. It touches upon various sectors, from transportation to hospitality and into finance and maritime operations. After drugs and arms trafficking, forced labor is the world’s third-most lucrative criminal activity, generating an estimated $150 billion of illicit revenue annually in the private and shadow economies throughout the world.
Indeed, the backbone of human trafficking is the generation of illicit proceeds and the resulting money-laundering activities to disguise, move, and conceal the illegal profits, all being conducted on a massive global scale. To even start to combat this problem, financial institutions need to be better trained, armed, and empowered to deny traffickers access to legitimate financial systems around the world.
Almost 50 million people are currently living under human trafficking conditions, a form of modern slavery that includes forced labor, forced marriages, and sexual exploitation.
As criminal enterprises that include human trafficking evolve and adapt to changing circumstances, unsuspecting sectors find themselves entangled in its criminality, including an unlikely player: the insurance industry.
To delve further into this, the Thomson Reuters Institute has published a new Special Report, Beyond policies: The hidden linkages of human trafficking and the insurance sector, that describes the complex intersection between human trafficking and the insurance industry, providing insight into the evolving tactics of traffickers and the ways in which the insurance industry has become an unwilling part of human trafficking operations.
Disrupting human trafficking networks
As mentioned, more awareness and training in the financial industry is critical to disrupt the channels of human trafficking. For example, there was a 42% increase in suspicious activity reports (SARs) filed by financial institutions relating to human trafficking between 2021 and 2022, according to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) — and that follows a 32% increase between 2020 and 2021.
FinCEN also has provided supplemental advisory information on identifying and reporting human trafficking and related activity. In its 2020 guidance, for example, FinCEN provided insight on new typologies of human trafficking and shared red-flag indicators of human trafficking activity.
As the Special Report explains, the diversity of the insurance industry and the many types of policies which often involves large sums of money and sudden transactions can make it harder for law enforcement to spot unusual activity related to human trafficking. The Report also demonstrates how the insurance industry has a key role to play in evolving the prevention, protection, and prosecution involved with human trafficking, and better help track and stop the flow of money that is funding these traffickers.
To download a copy of the new Thomson Reuters Special Report, “Beyond policies: The hidden linkages of human trafficking and the insurance sector”, please fill out the form below: