Finance professionals vs modern-day slavery


Wednesday, September 19, 2018

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SLAVERY may have ended in the 19th century or did it? There are currently more than 40 million people as modern-day slaves, according to the 2016 figures compiled by the United Nation's International Labour Organization and the Walk Free Foundation, a human rights group.

What is modern-day slavery?

Modern-day slavery, also known as contemporary slavery, refers to institutional slavery that continues to exist in present-day society. It is less about literally owning other people, instead more about being exploited and completely controlled by someone else. It is an umbrella term that encompasses human trafficking, forced labour, debt bondage, forced or servile marriage and the sale and exploitation of children.

Modern-day slavery is often looked at as a problem with more prevalence in developing nations, but the reality is that it's a problem that is being faced worldwide. This widespread industry is a profitable criminal industry that impacts on industries from agriculture, garment manufacturing to private homes.


The US Department of State recently published the 2018 Trafficking In Persons (TIP) Report which detailed some concerns regarding trafficking across the Caribbean. It stated that legal and undocumented immigrants from the Caribbean region, notably from Jamaica, Guyana, and the Dominican Republic are most vulnerable to being trafficked.

Many Jamaicans and other Caribbean nationals are always desirous of a better life, thus seeking migration opportunities. These job seekers are easy prey for human traffickers who use false employment offers to lure them. Whether someone is forced into prostitution or domestic work or even have their travel documents seized and being forced to work, these are all examples of human trafficking.

The report also indicated that there have been positive changes, in the tier rankings, which is the rating of countries based on the extent of their government's action to combat trafficking rather than on the size of the country's problem.

There are no Caribbean countries currently classified into the lowest rank, Tier 3; on account that their governments do not fully meet the TVPA's (Trafficking Victims Protection Act of 2000) minimum standards and are not making significant efforts to do so.

Aruba, The Bahamas and Guyana were the only Caribbean countries appraised as Tier 1 as their governments' are deemed to fully comply with the TVPA's minimum standards. However, no tier ranking is permanent and every country, including other Tier 1 ranked nations across the world like the US, UK and Germany, can do more to maintain and continually increase efforts to combat human trafficking.


Human trafficking is one of the main forms of modern-day slavery; it does not respect borders or jurisdictions, and as such it is not surprising that it is one of the fastest-growing illegal enterprises in the world. The International Labour Organization (ILO) estimates human trafficking earns traffickers around US$150 billion a year – a staggering amount that showcases how human trafficking translates into money laundering.

Proceeds from these criminal activities pass through financial institutions daily, in an effort to create a legal trail for the monies obtained, through the process known as money laundering.

There are three aspects to money laundering, known as placement, layering and integration.

'Placement' is the transfer of the actual criminal proceeds into the financial system. That could be through the purchase of a single premium life policy or a work of art.

'Layering' is where a smokescreen is created to distance the illicit funds from their source through layers of real or imagined transactions and/or organisations which is designed to hide the trail and provide anonymity.

'Integration' is where the funds come back into the financial system as if from normal business transactions or as investment funds to purchase legitimate assets, for example, the work of art is sold and the proceeds reinvested in a business, which may or may not be legitimate.

Even if a business appears to only operate in one country, its supply chains will cross borders. And selling products or services that rely on human trafficking has financial implications as well as legal and moral ones.

Building a culture where everyone knows what to look out for, and how to report it, is key to good governance in this area.


Where and how can accountants counter this illegal activity? What part do they play?

Well, ACCA accountants across the Caribbean – indeed the world – play an important role in deterring human trafficking throughout the region. After all, professional accountants have a responsibility to support anti-money laundering initiatives, which firmly puts the finance profession on the front line in tackling this crime. We are the first line of defence in such instances.

In the case of ACCA members, they are obliged to report suspicions of money laundering and terrorist financing (including overseas terrorism, and carry out and maintain records of the compulsory internal staff training on money laundering).

These professionals also have to appoint a money laundering reporting officer to take responsibility for all the procedures, documentation and training; and, have appropriate preventative policies and procedures in place.

They are also advised on the signs to look out for. These could include a sudden and unexplained drop in income of a cash business after a change in ownership, clients using a number of bank accounts, an increase of cash deposits or unexplained third party payments.

There are strict penalties for accountants who don't report their concerns as they cannot wilfully or naively ignore obvious signs of human trafficking.

The fight against human trafficking is a war, especially because the number of prosecutions of human traffickers is alarmingly low. According to the 2018 TIP report, there were only 17,880 prosecutions and 7,045 convictions for trafficking and five new or amended legislation globally in 2017.

Finance professionals must use their experiences, in addition to talking to law enforcement agencies to make the connection between the act of money laundering and the source of the income.

Human trafficking destroys the lives of the people exploited in this crime, and as long as finance professionals come together to look out for these signs and uphold their ethics, they can help to reduce and eventually put an end to human trafficking.

All forms of modern-day slavery, whether human trafficking or the exploitation of our children, are heinous activities which must be stopped. The fight against these cruelties are not just for the governments, human rights groups or even finance professionals, it is for everyone.

So I encourage you to be informed, and ask yourself, “What can I do to help eradicate or even limit these vicious activities?”

Shevona Richards is a senior accountant at KPMG.

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