Fighting human trafficking with financial traces

Human trafficking is a serious organised crime and a violation of human rights. According to the International Labour Organization, almost 25 million people globally are forced into servitude across many industries.
Annual profits from modern-day slavery are estimated at a mind-boggling USD 150 billion. These proceeds eventually find their way back into the global financial system. Banks, therefore, are in a prime position to identify suspicious activities and transactions.

Local solutions to a global problem

To address this global problem, ABN AMRO is developing know-how and tools. “The bank is committed to preventing human rights abuses and is addressing this issue in a holistic manner,” says Lonneke van Zundert, Regional Head of Security & Intelligence Management (SIM) in the Asia & Middle East region. Human trafficking is a global problem in which countries may be involved either as a source, transit or destination country, or even a combination of all three. Different initiatives are taken to tackle the problem, depending on this typology and the industry. Van Zundert stresses that sound local knowledge is a key requirement for robust analysis, as red flags can vary by jurisdiction and line of business. For instance, the Netherlands is predominantly a destination country for human trafficking, with a focus on sexual and labour exploitation. In Asia, there are both destination and source countries, the forms of exploitation are more diverse and there may be different root causes.

The importance of partnerships

The initiatives taken by ABN AMRO revolve around client due diligence, transaction analysis and awareness raising. When assessing a company that wants to become a client of ABN AMRO, especially in sectors such as logistics, construction, agriculture, fishing or the textiles industry, we carefully analyse all risks, including those pertaining to human trafficking. Van Zundert: “Human rights due diligence is a fundamental part of the credit application and approval process, exemplified by cases where transactions were denied (or approved with stringent conditions) due to human rights concerns, such as forced labour.” Where necessary – particularly when red flags are identified and in the case of information gaps – sustainability assessments are supplemented with enhanced research conducted by SIM.

Van Zundert also underlines the importance of Public Private Partnerships and the positive evolution in the relationship between corporations and government authorities and law enforcement. “Sharing data between partners inevitably leads to better insights and improved analysis when working to solve a shared problem. We also see increased cooperation among companies, for example through initiatives such as the European Bankers Alliance and Mekong Club. This enables us to raise awareness and to tell our clients and the wider business community that this topic is a priority for ABN AMRO.”

Identifying human trafficking through data analysis

Analysing transaction data is another way in which ABN AMRO seeks to contribute to the abolition of human trafficking. “The expertise, tools and systems the bank uses to detect fraud can also be applied to trace human trafficking,” Van Zundert explains. Having previously worked for the Royal Netherlands Marechaussee military police force, Van Zundert has ample law enforcement experience with human trafficking cases. “Detecting human trafficking is not easy, but by combining bank data, intelligence and expertise we are able to identify irregular transaction patterns, which could be an indicator of illegal activity such as human trafficking.” 

Not only has data analysis introduced a new type of human rights due diligence, it has also expanded its scope. In addition to focusing on large corporate clients, who may face human trafficking risks in their supply chains, the bank also pays close attention to small and medium- sized enterprises and private individuals. Data analysis is especially helpful for identifying victims of human trafficking, who may have personal bank accounts accounts with ABN AMRO. When their wages are funnelled back to the employer, for example, this leaves a financial fingerprint. Van Zundert notes that it is also important to understand the local context when analysing data. “In the Netherlands, frequent payment transactions late at night at massage parlours or nail studios might be a red flag of criminal activities or illegal prostitution, but in Hong Kong’s 24/7 economy, for instance, transactions of this kind are not uncommon and perfectly normal.” 

Scott Stiles - Co-Founder and CEO Fair Employment Agency

"In addition to ABN AMRO’s efforts to identify and mitigate modern slavery through its lending activities, the bank also informs its Hong Kong staff of the risks of modern slavery in their domestic environment. Globally, almost 3 million domestic workers are debt-bonded to their work. Fair Employment Foundation (FEF) is eliminating debt bondage and modern slavery by reinventing migrant worker recruitment. To tackle this, FEF set up Fair Employment Agency, a non-profit employment agency that has created a business model without worker placement fees. Employers pay a market rate for the service, allowing them to build a sustainable business, and workers pay nothing. Since they were set up in late 2014, they have placed 1,700 Filipino migrant domestic workers with families in Hong Kong, saving those workers an estimated US$2.5 million in recruitment debt. ABN AMRO is committed to signing the Fair Hiring Pledge. This FEF initiative is a public commitment to educate ABN AMRO staff on hiring migrant domestic workers fairly. In support of their work, ABN AMRO has invited FEF to deliver workplace training in what it means to recruit and manage domestic workers fairly."