Wanted: Banks To Join The Front Lines In The Battle Against These Financial Crimes

• Publication Date: 20 October 2020
• Subject: Government, Public Sector, Criminal Law, Terrorism, Homeland Security & Defence, Money Laundering, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: FTI Consulting
• Author: Mr Andrew Pimlott

Disrupting the flow of dirty money to criminal elements is key to reducing the global threat posed by three despicable practices: modern slavery, terror financing and illegal wildlife trade.

Modern Slavery

More than 200 years after Great Britain abolished the slave trade, and 155 years after the United States followed suit, the idea of human bondage existing anywhere in our enlightened world is near inconceivable. And yet this miserable business persists. Modern slavery takes many forms, including the traditional definition of the word, in which ownership is exercised over a person, as well as human trafficking, forced labor and restrictions on freedom.

Incredibly, more than 40 million people are enslaved around the world, according to the United Nations' International Labour Organization (ILO).¹ Around 60% are in forced-labor situations in the private sector. And, like other financial crimes, profit is a driving force. Human trafficking is one of the most significant generators of criminal proceeds on earth, with revenues soaring from $31 billion in 2011 to $150.2 billion in 2018, according to ILO estimates.²

Fortunately, governments, financial institutions, investors, charities and other organizations are taking major steps to stamp out trafficking. In 2015, for example, the British government successfully pushed for the establishment of the first UN target for putting an end to modern slavery.³ It forms part of the UN's Sustainable Development Goals and requires governments to take effective measures to eradicate modern slavery and human trafficking by 2030.⁴

More progress needs to be made, however. Banks, as financial institutions, bear heightened responsibility. They must use their position in the payments system to strengthen their anti-money laundering checks, keep a careful eye on financial data and report any unlawful profits and proceeds - all with an eye to applying more pressure on traffickers and tearing their business models apart.

Such responsibility requires greater efforts. But it can be done. To learn more about the issue and how banks are ramping up the fight, read FTI Consulting's report, "Battling Financial Crime and Modern Slavery."

Terror Financing

Terrorist groups are spawned by a broad range of ideologies. And they come from many sectors of society - the extreme left, the extreme right, nationalists and, on a less violent scale, even animal rights activists. Often one group will seize the world's attention for a time through...