Virtual Hearing - Ending Exploitation: How the Financial System Can Work to... (EventID=111399)

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Connect with the House Financial Services Committee Get the latest news: https://financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/HouseFinancialCmte Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Thursday, March 25, 2021, at 12:00 p.m. (ET) National Security, International Development, and Monetary Policy Subcommittee Chairman Himes and Ranking Member Hill will host a virtual hearing entitled, “Ending Exploitation: How the Financial System Can Work to Dismantle the Business of Human Trafficking." ___________________________________ Witnesses for this one-panel hearing will be: • Ambassador Luis C.deBaca, Senior Fellow in Modern Slavery and Visiting Lecturer in Law, Yale University Law School; Former U.S. Ambassador-At-Large to Monitor and Combat Trafficking in Persons • Rev. Dr. Marian Hatcher, U.S. Representative, SPACE International • Barry M. Koch, Founder and Owner, Barry M. Koch PLLC; Commissioner, Liechtenstein Initiative • Laila Mickelwait, Founder, Traffickinghub movement; President, Justice Defense Fund • Dr. Louise Shelley, Omer L. and Nancy Hirst Endowed Chair, George Mason University. Director, Terrorism, Transnational Crime and Corruption Center (TraCCC) ___________________________________ The Breadth and Reach of Human Trafficking Human trafficking is defined by the Financial Crimes Enforcement Network (FinCEN) as “the act of recruiting, harboring, transporting, providing or obtaining a person for forced labor or commercial sex acts through the use of force, fraud or coercion.” This exploitation touches every geographic corner and economic strata of the U.S. and beyond. Proceeds of the human trafficking business – which includes sexual exploitation, forced labor (often involving global supply chains or recruitment into military service), domestic servitude, and even organ trafficking– are valued at more than $150 billion per year, with more than 25 million trafficking victims worldwide. Although human trafficking is distinct from human smuggling, trafficking victims may start as vulnerable migrants whose traffickers use their smuggling-related debts or unlawful immigration status as tools of duress. While human trafficking is most often local to a victim’s community or nation, it can cross borders and have global security implications. Violent and armed extremist groups, such as the Islamic State and Boko Haram, use trafficking in persons to gain troops, finance operations, intimidate, and cause local and regional instability. Permissive governments and corrupt officials benefit monetarily by facilitating such trade. Human trafficking is especially profitable for transnational criminal organizations, which earn income from the movement and sale of persons, one-third of whom are children. Moreover, there is a clear nexus between human trafficking and other types of criminal activity, such as the multi-billion dollar transnational trades in illicit tobacco11 and narcotics, where trafficked persons and illicit products move along the same supply routes. This convergence is seen in Office of Foreign Assets Control (OFAC) designations for transnational organized crime, drug kingpin, human rights, and corruption sanctions programs against those who threaten U.S. security interests. Financial Aspects of the Human Trafficking “Business” These illicit networks, both transnational and domestic, frequently operate as businesses, with staff and contractors who manage costs for inputs (including recruitment or abduction of victims), marketing of services, and “supply chain” (i.e., the travel costs and facilitation required to move their victims to the buyers). They also have needs to manage money, including the repatriation or laundering the proceeds of their crimes. It is these financial aspects that allow financial institutions (FIs) and investigators to see into the structure of human trafficking operations, enabling detection, prosecution, and ideally, the dismantlement of the network itself. Among the hallmarks of finance-related activities seen in human trafficking networks: Front companies: Human traffickers commonly hide their operations and launder proceeds through businesses which mix licit and illicit proceeds. These front companies are often service-oriented or use manual labor and of a type which might have frequent cash transactions, such as restaurants, hotels, massage parlors, bars, and salons. These businesses are also the type where the presence of trafficking victims as employees or hidden within the business establishment would not raise alarm. Their business activities, however, may not be normal for the industry. “Gatekeepers” such as lawyers, accountants, notaries, real-estate brokers, and other third-party money launderers “facilitate corrupt transactions and… create the necessary infrastructure to... Hearing page: https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=402072