Can bank alliances prevent human trafficking?

In early 2018, the Italian police intercepted a trafficking ring that dealt with workers from Bangladesh and India. Similar to almost every other trafficking story, the workers, in this case as well, were given false promises of jobs and brought to the country in exchange of exorbitant recruitment fees.

This was a rare instance where the police successfully managed to arrest the entire trafficking circle and also secured enough evidence to file strong cases against the gang because of a coalition formed between Europe's top banks and law enforcers.

When the victims were brought to Italy, they were required to open bank accounts and handover their bank cards to the traffickers. The traffickers would then open fake companies in the names of the victims and perform transactions. According to the Financial Action Task Force's—an intergovernmental organisation formed in 1989 to prevent money laundering— report, the traffickers laundered at least 2.5 million euros this way. However, one of the red flags that helped the police catch the culprits was that all transactions and withdrawals took place from the same ATM. The bank noticed this and filed a Suspicious Activity Report (SAR) to the police.

These are the kinds of red flags that bankers in Europe and America look for in transactions in a bid to prevent trafficking. Now, it's almost impossible to manually analyse the hundreds of thousands of transactions that take place every day. However, various bank alliances around the world, following years of research, have developed certain warnings that can help identify trafficking circuits. They have also trained their officials to identify such patterns.

The first alliance was launched in 2014 with six of the biggest banks in the United States including the likes of JP Morgan, Western Union and Bank of America. Soon after, the system was replicated in Europe.

Cyrus Vance Jr., who works at the Manhattan District Attorney Office, during a conference in London this month, explained how effective the new system has been. “Soon after the formation of the bank alliance, the number of SARs increased drastically,” he said.

“In New York, most of the trafficking cases involve kids who come to the city because they are kicked out of home due to various reasons. The Pennsylvania Station in New York is like a magnet for these kids and that's where many of them are trafficked.”

“One police officer noticed this but didn't really know how to build a case. That's when Western Union came forward. The bank was able to backtrack and find out all the bus tickets that the trafficker had bought for the kids. We were able to find the victims and file cases against those who were guilty,” explained Vance Jr.

The question is how effective can such a system be for Bangladesh? It's a country struggling to deal with trafficking cases. Over 4,000 cases under the Prevention and Suppression of Human Trafficking Act have been filed since the act was passed in 2012. And yet, convictions are very rare—only 10 to 15 convictions take place every year, a number lesser than even Nepal.

Asif Saleh, Senior Director of Strategy, Communications and Empowerment for BRAC, believes that Bangladesh can benefit a lot by being a member of these alliances.

“A lot of these red flags and algorithms are non-existent in our part. If you focus on such [South Asian] countries, the results can be very interesting,” said Saleh.

Stating an example of how analysing transactions can help stop trafficking, Saleh said, “A customer once came to deposit around USD 2,500 [BDT 2,10,000] in a branch located in one of the most remote parts of the country.

He looked very anxious and that made the bank officer suspicious.”

“Eventually, the customer reluctantly said that he was paying the money to rescue his brother from Libya. He was paying it to the extortionist's partner in Bangladesh. One thing led to another and the name of the account holder was identified.”

“Later we found out that huge amounts of money had gone in [the same account] in the last two weeks and around 12 people were held hostage in Libya. Unfortunately we did not have the international network to stop this at a national level. Right now what we have in place are very basic anti-money laundering activities. It is not specifically related to human trafficking,” explained Saleh.

It's not as though law enforcers in Bangladesh are completely unaware of this strategy.

Three years ago, when the trafficking of Bangladeshis to Malaysia was at its peak, the Bangladesh Bank's Financial Intelligence Unit had seminars with branches of banks located at the bordering areas and warned them to look out for transactions that could indicate human trafficking.  

This was something that led to the arrest of Mohammad Asem, considered to be the kingpin behind the entire Malaysia saga.

CID's Organised Crime Unit Superintendent of Police, Mollah Nazrul Islam, told the media back then that they had received sufficient evidence through Asem's bank details. Nazrul claimed that they got records of illegal transactions worth Tk 20 to 25 crore, made through different bank accounts named after the culprit's family members.

Speaking to The Daily Star, Nazrul explains that if the Bangladesh Bank's Financial Intelligence Unit analyses transactions and finds something suspicious they can file suspicious transaction reports (STRs) and this can be investigated by the anti-corruption commission or the police. However, the problem with this is that the warning signs here have to do more with money laundering as opposed to the specific red flags for trafficking.

In the case of Asem, the police started investigating the issue only after one of the victims had filed a case against him in 2016. Had there been a bankers' alliance focusing on these issues from beforehand, things could have definitely been a lot smoother for law enforcement agencies. The banks themselves could have developed red flags and sent in regular suspicious reports, making life a lot easier for the law enforcers.

And this is exactly what HSBC, through a pilot programme, is working on. “We are a global bank in 75 countries. We have data that is a roughly a quarter the size of Facebook's. We have endless amounts of data. We are now looking through them manually and filing SARs. A lot of it is secret, but it is being done,” explained Erik Barnett, Regional Head of Europe for Financial Crime Threat Mitigation, HSBC, in a conference.

Through the research, HSBC is bound to create many more red flags that can further help bankers notice trends. Again, as far as red flags and warnings are concerned, these can vary from culture to culture. For instance, it may be quite common for Bangladeshis to use cheque books, but that isn't the same in the UK. Even if a Bangladeshi bank joins one of these alliances abroad, it would still need to focus on building its own system of warnings, rather than depending upon the ones already created.

The Bangladesh Bank's 'Guidelines on Prevention of Money Laundering' does warn bankers of human trafficking. However, it is quite clear that there's plenty more that can be done in this regard.

The steps taken to tackle human trafficking have traditionally been quite reactionary. For instance it's only after thousands of victims got trafficked from Bangladesh to Libya that the government and aid agencies decided to take action. Traffickers in Thailand were brought to court only after mass graves were found in a Thai island of migrants hoping to reach Malaysia. Punishing these actors after the crime is committed doesn't solve the problem. As long as the system is rickety enough for the traffickers to exploit, the problem is bound to persist. 

And that's the reason why experts believe that in today's world, if governments aren't proactive about tackling trafficking, they won't win the battle since the trends of trafficking keep on changing. And in order to be proactive, one needs to tackle these issues through policies.

For instance, in April 2018, the United States passed the Stop Enabling Sex Traffickers Act (SESTA) and Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA) package law. These laws would make it easier to prosecute social media platforms and websites that facilitate sex trafficking through online advertisements.

Days after the above law was passed, websites in the United States witnessed a sharp drop in the number of ads online. The number of sex ads, based on reports, fell by 80 percent to about 20,000 a day. This is an example of a policy that can battle trafficking as a whole, rather than just following reactionary measures.

In a similar way, creating a set of red flags and an alliance of banks against trafficking can probably be a major step in Bangladesh's battle against human trafficking. The only question that remains here is whether the country is ready to take such a radical step to curb one of its thorniest issues.