Main conclusions of the seminar on countering human trafficking and associated money laundering

Main conclusions of the seminar:

• FAST noted that this is the first such event in Europe, where representatives from the financial and public sectors of Latvia and neighboring countries discuss modern forms of human trafficking and related ML, as well as the involvement of the financial sector in proactive detection of such crimes.
• FAST will continue this type of round table discussions in Hungary, Poland and Austria.
• The webinar highlighted the availability of financial services for victims of the human trafficking, the social dimension of such crime, the vulnerability of victims and the social environment that contributes to such crime.
• In addition to the importance of indicators and typologies in human trafficking and the related detection of ML, the role of public-private partnership was underlined to ensure proactive detection and investigation of such crimes.
• Raising awareness among the public and the financial sector as well as among law enforcement authorities will contribute to achieve results in the fight against human trafficking.
• There are an estimated 40 million people in conditions of Modern Slavery globally. Each year, these crimes generate $150 billion in profits through the exploitation of people .
• Human exploitation has become the most pervasive criminal economy in the world.
• Human trafficking is a problem that exists in all regions, regardless of the gross domestic product of each country or other factors.
• The aim of financial intelligence is to reduce revenues from human trafficking crimes.
• The financial sector is connected to trafficking and slavery in three ways: proceeds of these crimes will often end up being handled by it; it invests in and lends to businesses that may knowingly or unknowingly be benefitting from trafficking and the exploitation of labour; and, by providing financial services to those that are currently excluded, the financial sector can significantly reduce vulnerabilities. 
• Coordination of cooperation between the public and private sector – law enforcement authorities, the financial intelligence units, public authorities, as well as financial institutions, non-governmental organisations and technology companies – is crucial for human trafficking cases. Effective cooperation increases both the capacity to combat complex forms of crime and the effectiveness.
• Although it is not known exactly how many of the 40 million victims of human trafficking worldwide are confronted with the unavailability of financial services, studies by the Commerzbank in Germany shows that a large proportion of victims of human trafficking live in the shadow economy and operates only with cash.
• In recent years, the number of domestic labour exploitation cases in Latvia has increased rapidly, including cases where third country nationals are being exploited.
• The number of formally identified victims of labour exploitation is increasing by 71% per year on average, already 53 cases in 2021.
• Exposed persons with various vulnerability factors – poor credit history, addiction problems, mental illness, no local language skills, elderly persons, persons from social risk groups.
• The methods of ML in the analysed cases of human trafficking in Latvia do not differ from classical methods of ML. As in other cases, criminals use the proceeds for an exclusive lifestyle, purchasing luxury cars, investing in real estate and other goods. As a result, ordinary financial institutions suspicions about ML and a report on suspicious transactions can potentially result in a case of human trafficking.
• The Finance Latvia Association, together with the Regulator and other institutions has been working for the last two years to reduce the risk on access to financial services for different groups of society.
• Indicators and typologies indicating human trafficking and subsequent ML are very important for the private sector.
• The FIU Latvia implemented public-private partnership – cooperation coordination group model that has already been used to combat human trafficking. According to the Finance Latvia Association, this model has potential in the future.
• The main challenges in preventing and combating human trafficking are insufficient international cooperation, lack of understanding and awareness in society, as well as difficulties in identifying funds generated from human trafficking.