AUSTRAC’s Fintel Alliance discusses the indicators you need to know about Child Exploitation
The Fintel Alliance recently published a typology which has specially focused on reporting entities approach to the combatting of child exploitation for financial gain. The recent typology suggests that reporting entities should take a risked based approach in sighting indicators while considering the obligations under the AML/CTF Act. This can be achieved by including robust and stringent on-boarding processes, ongoing customer due diligence including monitoring of all designated services, and the reporting of suspicious matters (SMR’s) to AUSTRAC where required. In turn having the ability to identify, mitigate and manage the associated risks across your organisation.
What is child exploitation?
Child sexual exploitation for financial gain involves children being coerced or manipulated into engaging in sexual activity. The children and their family members often receive a nominal amount for their involvement and the facilitator retains most of the profits. The internet provides users with anonymity and accessibility, allowing online predators to access live-distance child abuse material on a global scale. The impact of child sexual exploitation is far reaching and the nature of the type of offending requires a collaborative approach by government, industry and the wider international community to identify and prosecute offenders who exploit children for financial gain. All reporting entities play an important role in combatting child sexual exploitation. The responsibility is on everyone to assist in the combatting of this exploitation through the development of profiling and transaction monitoring rules, stopping transactions where applicable and possible, and reporting any unusual activity that could be related to the regulator.
Some industry red flags and helpful indicators could be:
There are some challenges reporting entities face by only using financial analysis, as it can be difficult to differentiate between the purchase of adult services, scam related activity and the sexual exploitation of children, however, suspicious matter reports should be submitted to AUSTRAC which describe the indicators that are associated with child exploitation.
More on the fintel alliance can be found here https://www.austrac.gov.au/about-us/fintel-alliance