Follow the Money

EXECUTIVE SUMMARY

You may choose to look the other way, but you can never say again that you did not know…”

WILLIAM WILBERFORCE

Human trafficking occurs in every country across the globe and yet remains a relatively hidden crime, with perpetrators operating under anonymity on the dark web and in the underbelly of the global economy to entrap victims for sexual exploitation, forced labour, domestic servitude and other forms of exploitation (UNODC, 2020).

Human trafficking is a highly profitable crime, generating an estimated US$150 billion worldwide per year, with a significant portion of these proceeds passing through legitimate financial services businesses (Yesufu 2020:104). South Africa reports the highest number of cases compared to other southern African countries such as Mozambique, Lesotho, Botswana and Zimbabwe (Chibba 2021:4). It should be noted, though, that it is likely that MSHT is underreported as a crime and existing statistics are unlikely to reflect the full scale of the issue. MSHT is often reported as prostitution, brothel ownership and so on, for several reasons including a lack of training and poor understanding of the crime.

Global economic and social hardship, exacerbated by the continued impact of the Covid-19 pandemic, has increased people’s vulnerability to human trafficking. The war in Ukraine has also provided an opportunity for traffickers to exploit the vulnerable and displaced, as is the case in other war-torn countries.

Human trafficking is the process whereby people are recruited within their communities and countries of origin and transported to destinations where they are exploited for the purposes of forced labour, prostitution, domestic servitude – among other forms of exploitation.

In the Palermo Protocol, the United Nations Office on Drugs and Crime (UNODC) defines human trafficking as follows:

Trafficking in persons’ shall mean the recruitment, transportation, transfer, harbouring or receipt of persons by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation. Exploitation shall include, at a minimum, the exploitation of the prostitution of others or other forms of sexual exploitation, forced labour or services, slavery or practices similar to slavery, servitude or the removal of organs.”

The UNODC, as the secretariat of the conference of the parties to the United Nations Convention against Transnational Organised Crime and its protocols, including the Palermo Protocol (2000), defines three basic elements of trafficking, where the actions are carried out by specific means for a specific purpose:

– Acts: recruitment, transportation, transfer, harbouring, receipt, patronising or soliciting
– Means: force or other forms of coercion, abduction, fraud, deception, the abuse of power or a position of vulnerability, giving or receiving of payments or benefits to achieve the consent of a person having control over another person
– Purpose: exploitation of the prostitution of others or other forms of sexual exploitation, forced labour or services, slavery or practices similar to slavery, servitude, removal of organs

The UNODC explains that the crime of trafficking should be defined through a combination of the three constituent elements and not the individual components, though in some cases these individual elements will constitute criminal offences independently. This model helps determine whether force, fraud or coercion was present, indicating that the encounter was not consensual.

Domestic trafficking refers to the entire crime occurring within a country’s border, while international trafficking refers to cases in which the trafficked person is transported from one country to another. The country where the trafficked person comes from is called the source country or country of origin. The country where the trafficked person ends up is called the destination country. Any countries that the trafficked person travels through to reach the destination country are called transit countries. South Africa is known to be a source, transit and destination country, according to the US Department of State Trafficking in Persons Report (2021).

Human trafficking is separate and distinct from human smuggling. In human smuggling, there is a consensual arrangement by a party and the smuggler to be taken to a new country. However, smuggling can become trafficking when the party is brought to the new country and then exploited (UNODC, 2008). This report does not extend to covering human smuggling.

To address modern slavery and human trafficking in South Africa, it is critical that this crime is understood in terms of the prevalent trafficking patterns and financial flows. This will assist in developing solutions to better support the prosecution of offenders, protect the vulnerable and provide support to victims of MSHT.

Human trafficking is widely covered in international and local research, but coverage of the financial aspects in South Africa is limited. Based on the EWG’s engagement with banks in South Africa, few financial institutions have controls in place to identify financial flows associated with MSHT.

Financial touchpoints include payments and movement of proceeds associated with every step in the value chain, such as the transport of victims and other logistics such as hotels or flight tickets, and the collection of monies generated by the exploitation of trafficked victims and by the sale of goods produced through their exploitation. Bribery and corrupt dealings to facilitate human trafficking are also commonly noted.

One of the most effective ways to identify broader criminal networks and reduce the profit incentive from this crime is to follow human traffickers’ financial trails. Investigating the financial aspects associated with human trafficking is highly effective in generating financial evidence that enables law enforcement to differentiate the traffickers from their victims, document the traffickers’ motives and knowledge, corroborate victim testimony and assist in identifying affiliates. Investigating and prosecuting traffickers for money laundering ensures that criminals are fully prosecuted for all their criminal activity and secures longer sentences for traffickers.

Proactive partnerships between governments, financial institutions, law enforcement, civil society and survivor experts are critical to identifying illicit financial activity associated with human trafficking. The EWG was not able to identify any criminal investigations or prosecutions for human trafficking cases where the financial flows had been explored.