Consider the following:
On October 23, 2019, the bodies of 39 Vietnamese people—29 men, 2 boys, and 8 women — including 10 teenagers; the youngest were two 15-year-old boys—were found in the trailer of a refrigerated trailer in Essex, United Kingdom. The trailer had been shipped from Belgium, to UK. Although it was a refrigerated trailer, the refrigeration was not turned on in the sealed container and the 39 perished from lack of oxygen and hyperthermia in heat of approximately 101⁰ F. The victims (or their families) had paid approximately £10,000 each to be smuggled into the UK. The news reports at the time and the currently on-going trial of some of those responsible highlights that this was not uncommon. While this was a case of human smuggling, it is not clear is whether these individuals would have ended up as human trafficking victims.
A recent human trafficking case that has received considerable media attention is the case involving the late Jeffrey Epstein. While Epstein’s case is heinous and appears to involve a litany of high-profile offenders, it is also not the norm. Human traffickers typically are not multimillionaires and rarely travel in the high-net-worth circles that Epstein did. However, his victims had a characteristic in common with just about every human trafficking victim — they were vulnerable, and the trafficker was able to exploit that vulnerability.
Have you ever watched the Liam Neeson 2008 movie “Taken”? It portrays another twist on human trafficking: kidnapping. Though his daughter and her friend arguably were not vulnerable in the way that many trafficking victims are, there were just off the plane in a foreign country. They were approached by another “tourist” who wins their trust, learns the girls plans, where they are staying, and passes the information to a trafficking ring which then kidnaps the girls for the purpose of sexual exploitation. In the real-world, few human trafficking victims have a caring father who is an ex-C.I.A. operative, with a “particular set of skills” who rescues his daughter. Although the scenario presented in the movie is admittedly far-fetched, the movie did a lot to raise the awareness of human trafficking for sexual exploitation.
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These items refer to a group of connected subjects: Human Trafficking, Human or Modern Slavery, Trafficking in Persons, and Human Smuggling. Regardless of the exact terminology, this is a serious crime and an egregious violation of the victim’s human rights. Thousands of men, women and children fall into the hands of traffickers each year, both in and outside of their own countries. Almost every country in the world is affected by trafficking, whether as a country of origin, transit, or destination for victims.
In this – the first of two – articles we will talk about these subjects, some differences and similarities, and the extent of the problem. In our next article we will speak about what the financial sector can do to help governments and law enforcement to eliminate this terrible criminal enterprise.
Let’s get started…
Trafficking and Smuggling
There are three stages generally involved in human trafficking. FinCEN describes these as follows[1]:
Recruitment or Abduction: Traffickers obtain their victims through deception or force. For instance, traffickers may recruit victims through the use of kidnapping, false marriages, or advertisements offering employment or study abroad. Individuals from countries and geographic areas that have been affected by economic hardship, armed conflicts or natural disasters are particularly vulnerable to these tactics.
Transportation: After being collected, victims are transported to locations where they are exploited or sold on to other traffickers. Victims may originate from abroad or within the United States and may be transported by air, sea and/or land domestically or internationally.
Exploitation: Traffickers profit from exploiting victims through forced labor, sexual exploitation, involuntary participation in crimes or other activity. Businesses in the service and manual labor industries (e.g., massage parlors, restaurants, nail/beauty salons, farms, construction companies, domestic services, fishing industry) have been frequently used to exploit trafficked individuals. In contrast to the one-time illicit proceeds of human smuggling, this final phase generates ongoing criminal proceeds.
Likewise, there are generally three stages in human smuggling which FinCEN describes as:
Solicitation: A potential migrant may seek the services of a local facilitator/smuggler who are often part of a larger smuggling network that works to bring migrants across a country border. In the US, migrants often originate from Mexico and Central America, but they may originate from anywhere in the world.
Transportation: Migrants may be smuggled through various methods and routes to avoid detection.
Payment: Payment to smugglers or to smuggling networks are either in advance, partial payment (part prior to departure and remainder upon arrival), and upon arrival (often by relatives at home or at the destination.)
Sometimes the terms human trafficking and human smuggling are used interchangeably, but there are differences.
- Consent: The smuggling of humans – often but not limited to migrant workers – while typically undertaken in dangerous, degrading or even subhuman conditions – usually involves individuals who have consented to and have paid to be smuggled. This is in contrast to victims of human trafficking, who have never consented to this or, if they did initially, their consent subsequently becomes meaningless because of deceptive, coercive, or abusive actions of the traffickers.
- Exploitation: Human smuggling ends with the arrival at their destination, whereas human trafficking involves the ongoing exploitation of the victims in some manner to generate ongoing illicit profits for the traffickers. Persons that have been smuggled sometimes subsequently become trafficking victims as traffickers take advantage of the smuggled individuals’ vulnerabilities.
- Transnational: Smuggling involves the illegal crossing of international borders, whereas trafficking need not do so. Trafficking can occur regardless of whether victims are taken to another country or the other side of town.[2]
There are a number of US laws addressing human trafficking and smuggling including the Trafficking Victims Protection Act (TVPA) of 2000 (re-authorized in subsequent years) plus numerous others. These are listed in Appendix B of the US’ National Action Plan to Combat Human Trafficking (10/19/2020).[3]
Types of Trafficking
Literature on Human Trafficking identifies three broad self-explanatory categories.
- Human Trafficking for sexual exploitation (abbreviated as HTSE),
- Human Trafficking for forced labor or slavery (abbreviated as HTFL); and,
- Human Trafficking for Organ removal – organ trade (abbreviated as HTRO.
HTSE is well documented and contributes some of the most egregious cases. Individuals are recruited through coercion, force, false promises and the like, and end up as victims that are sexually exploited by the traffickers. Traffickers take advantage of the victim’s vulnerability to recruit or lure the individual into the activity and to control them. The vulnerability may be socio-economic such as the need for money, physical or mental abuse, drug dependency, shame, threats to family back home, or some other method. Although HTSE accounts for about 19% of the individuals trafficked, it accounts for over two-thirds of the estimated dollar value of the activity.[4] It is a very lucrative criminal trade, second only to the drug trade. Victims are predominantly female – both adult and underage – but there are male victims also.
Human Trafficking for forced labor, or HTFL, is also well documented. This category of trafficking has the largest number of victims – but accounts for a much smaller percentage of the dollar value of the activity. HTFL victims are found in a wide range of activities from child soldiers, migrant workers, construction work, domestic (household) help, illicit drug production, clothing manufacture, fishing and fish preparation, forced/sham marriage. Here, traffickers also take advantage of victims’ vulnerability to essentially turn the victim into a slave.
HTRO is the least well documented form of trafficking. Estimates of the dollar value associated with HTRO are difficult. In 2007, the World Health Organization estimated that out of all transplants worldwide, 5–10% were conducted illegally. In 2011, it was estimated that the illicit ‘organ trade’ generated illegal profits between $600 million and $ 1.2 billion per year. The numbers are undoubtedly higher today. Underground ‘organ markets’ present a significant threat to the security of national organ donation systems, eroding the image of transplantation and public confidence in organ transplantation worldwide.
Unfortunately, society has often viewed the actual trafficking victims as criminals engaging in illegal activities. Fortunately, though, in recent years the focus has turned to the traffickers.
Can we diminish the problem?
Estimating the extent of the problem is difficult both in terms of people and in financial terms. There are difficulties in identifying victims as a result of the traffickers’ manipulation victims often have difficulty seeing themselves as victims.
The United Nation’s International Labour Organization’s (“ILO’s”) 2017 Report on Global Estimates of Modern Slavery – Forced Labor and Forced Marriage provides some estimates on the extent of the problem.[5]
- In 2016, an estimated 40.3 million people were victims in modern slavery
- This included 24.9 million persons in forced labor and 15.4 million in forced marriage
- Boiling this down, it means there were 5.4 victims of modern slavery for every 1,000 people in the world.
- One in four victims of modern slavery are children – and some 37% of those forced to marry were children.
- Out of the 24.9 million people trapped in forced labor,
- 16 million people are exploited in the private sector such as domestic work, construction or agriculture, fishing;
- 8 million persons in forced sexual exploitation, and
- 4 million persons in forced labor imposed by state authorities.
- Women and girls are disproportionately affected by modern slavery and are estimated to account for 28.7 million (78%) of the overall total. More precisely, women and girls represent 99% of victims of forced labor in the commercial sex industry and 58% in other sectors; 40% are victims of forced labor imposed by state authorities, and 84% are victims of forced marriages.
- Children represented 18% of forced labor victims and 7% of those forced to work by state authorities. Children who were in commercial sexual exploitation (where the victim is a child, there is no requirement of force) represented 21% of the victims.
Outside of the commercial sex trade, in many cases the products that are made or contributed to or the services provided by trafficking victims end up in seemingly legitimate commercial channels. Forced laborers have likely produced some of the food we eat and the clothes we wear and have cleaned our homes or offices.
Those living in a marriage to which they had not consented endure a situation that involves having lost their individual and sexual autonomy and often simply provide free/cheap labor under the guise of “marriage”.
In the five years prior to 2016, the ILO report estimates that some 89 million people experienced some form of modern slavery for periods of time ranging from a few days to the entire five years.
Human trafficking is largely an “unseen” crime, often hiding in plain sight. Nonetheless, each victim is an individual person, and each unfortunately has a tragic story of a life interrupted, destroyed, or in the worst case brought to an end.
Human Trafficking Revenue
According to an ILO report in 2014, Human trafficking earned profits of about $150 billion a year for traffickers.[6] Given historic growth in the earlier part of the current decade, this figure is undoubtedly considerably greater in 2020. The breakdown is shown in the chart to the right.[7]
Studies by Organization for Security and Co‑operation in Europe (OSCE) show that sexual exploitation can yield a return on investment ranging from 100% to 1,000%, while an enslaved laborer can produce more than 50% profit even in less profitable markets.[8]
UNICEF and other web sources describe that Human Trafficking revenues are second only to global drug trade. They indicate that human trafficking is a high reward, low risk proposition. This means that traffickers can make a lot of money with minimal fear of punishment or legal consequence.[9] Human trafficking has served to enrich the traffickers. In more recent times, there have been reports that it has been used as a funding source for terrorist operations.
Conclusion
No one can disagree with the need to eliminate human trafficking. It is a global human rights problem and also a terrible crime that results in considerable human misery. It enriches traffickers at the cost of the vulnerable members of our worldwide society. Its eradication is a daunting task that can only be accomplished if governments, law enforcement and the private sector work together.
This financially lucrative activity generates billions of dollars of revenues. The traffickers want these funds laundered in order to disguise and hide the illicit source of the money so that they can enjoy their ill-gotten wealth.
The financial sector has an important role to play in the battle against Human Trafficking. Next month we will speak about the financial sector’s role in this effort. We will also discuss the most recent guidance, red flags, and warning signs that financial institutions should be aware of.
[1] Guidance on Recognizing Activity that May be Associated with Human Smuggling and Human Trafficking – Financial Red Flags FIN-2014-A008 FinCEN https://www.fincen.gov/sites/default/files/advisory/FIN-2014-A008.pdf
[2] Categories and descriptions taken from Human Trafficking and Possible Red Flags – Sanction Scanner – https://sanctionscanner.com/blog/human-trafficking-and-possible-red-flags-71
[3] The National Action Plan to Combat Human Trafficking US Government (10/19/2020) – https://www.whitehouse.gov/wp-content/uploads/2020/10/NAP-to-Combat-Human-Trafficking.pdf?utm_medium=email&utm_source=govdelivery
[4] Data is taken from Human Trafficking by the Numbers Fact Sheet – Human Rights First – https://www.humanrightsfirst.org/ resource/human-trafficking-numbers#:~:text=Human%20trafficking%20earns%20profits%20of,construction%2C%20 manufacturing%2C%20mining%20and%20utilities
[5] Information taken from Global Estimates of Modern Slavery – Forced Labour and Forced Marriage (Geneva 2017) International Labour Office (“ILO”) https://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/documents/publication/wcms_575479.pdf
[6] Economics of Forced Labor November 2014 – ILO – https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_243201/lang–en/index.htm#:~:text=of%20forced%20labour-,ILO%20says%20forced%20labour%20generates%20annual%20profits%20of%20US%24%20150,times%20more%20than%20prior%20estimates — and —
Profits and Poverty The Economics of Forced Labour 2014 – ILO- https://www.ilo.org/wcmsp5/groups/public/—ed_norm/—declaration/documents/publication/wcms_243391.pdf
[7] Data is taken from Human Rights First’s Human Trafficking by the Numbers Fact Sheet – https://www.humanrightsfirst.org/ resource/human-trafficking-numbers#:~:text=Human%20trafficking%20earns%20profits%20of,construction%2C%20 manufacturing%2C%20mining%20and%20utilities
[8] Data is taken from Human Trafficking by the Numbers Fact Sheet
[9] What Fuels Human Trafficking? January 13, 2017 UNICEF https://www.unicefusa.org/stories/what-fuels-human-trafficking/31692
