INSIGHTS

A crisis upon a crisis: Human trafficking ofUkrainian refugees
Carol Beaumier
Senior Managing Director, Risk & Compliance, Protiviti – New YorkAdvisory Board Member, Anti-Human Trafficking Intelligence Initiative
carol.beaumier@protiviti.com“Refugees are at particular risk for human trafficking – a consequence of their vulnerable
status, the devastating losses they have experienced, and their precarious life situations until
durable solutions become available.” 1

The Ukrainian refugee crisis
More than 5 million refugees – greater than 10% of the country’s population – have fled fromUkraine in the two months since the Russian invasion, about 90% are women and children. The
number of refugees already rank the Ukrainian refugee crisis among the top five refugee crises
in recent times, and there is no indication that the migration is ending. 2
The refugees arrive with very little – the clothes they are wearing, identification documents, aphone, and maybe a pet they couldn’t bear to leave behind. Hundreds of children have arrived inbordering countries by themselves. The refugees are welcomed in countries like Poland,Romania, Hungary, Moldova and Estonia where local and international aid organisations andlocal citizens offer them food, shelter, schooling for the children and other assistance until they
can make new plans, which for many will include onward migration to Europe, the UnitedStates, Canada and other destinations. They are looking for the hope of something better – hopein short supply today to the 7 million displaced people who remain in Ukraine or the more than

1 “Trafficking Risks for Refugees,” by Ann P. Wilson, Third Annual Interdisciplinary Conference on Human
Trafficking, 2011, digitalcommons.unl.edu/humtraffconf3/4/.
2 “After a Month of War, Ukrainian Refugee Crisis Ranks Among the World’s Worst in Recent History,” by Drew
Desilver, Pew Research Center, March 25, 2022, www.pewresearch.org/fact-tank/2022/03/25/after-a-month-ofwar-ukrainian-refugee-crisis-ranks-among-the-worlds-worst-in-recent-history/.

500,000 who have reportedly fled to Russia or Belarus rather than stay in their war-torncountry.
The “lucky” (if that is even a word that can beused to describe people who have witnessedand endured such horror) refugees have family
or friends in other countries who are willing tohelp them relocate. But countless otherrefugees fled their home with no clear plans
and they are desperate. That anyone would
seek to take advantage of these people whohave already suffered so much is inhumane,but we know it will happen. We have witnessed
it before. 3 4 5

The warnings about human trafficking
The United Nations High Commissioner for
Refugees (UNHCR), the United Nations’International Organization for Migration(IOM), the International Justice Mission, Stop
the Traffik, CARE and so many others,
including major media outlets and concerned
citizens, are sounding the warning about thehuman trafficking risks and are calling foraction to protect refugees.

Some Facts About Human Trafficking•

Human trafficking is a $150 billion business globally.3•

40.3 million people globally are estimated to be
victims of human trafficking.

•30.2 million victims (75%) are aged 18 or older, with
the number of children under the age of 18 estimatedat 10.1 million (25%).

•71% of trafficking victims around the world are
women and girls.

•Sixteen million forced labor victims work in domesticwork, construction, or agriculture.

•4.8 million forced labor victims have been sexually
exploited.4•

Only one out of 100 people are rescued from humantrafficking.5

These organisations, in addition to law enforcement, are taking steps to warn refugees about therisks and how to identify and deal with the traffickers, but we know that refugees will fall prey totraffickers who will move them to their next destination. In fact, the scale and speed at which therefugees sought to flee meant that optimal safeguards to protect them were not initially in place
and an untold number of refugees may already have been victimised. At the point they are
moved to their next destination, the refugees will have already been trafficked and their only

3 “Cracking The $150 Billion Business Of Human Trafficking,” by Carmen Niethammer, February 2,
2020, www.forbes.com/sites/carmenniethammer/2020/02/02/cracking-the-150-billion-business-of-humantrafficking/?sh=2af353234142.
4 “Scale of the Issue, Human Trafficking and Modern Slavery are Happening in Every Corner of the Globe,” Stop theTraffik, www.stopthetraffik.org/about-human-trafficking/the-scale-of-human-trafficking/.
5 “Only one out of 100 people are rescued” from human trafficking,” UN News, July 29,
2o16, news.un.org/en/audio/2016/07/615462#:~:text=Only%20one%20out%20of%20100%20people%20are%20res
cued%20from%20human,(UNODC)%20in%20New%20York.

Insights ● 2chance of being rescued will come from those attuned to and able to recognise indicia oftrafficking. That includes financial institutions.
Somewhat surprisingly, neither the financial crime agencies nor the financial institution
regulators have yet to issue any advisories to the industry to be on alert for potential trafficking
activity related to Ukrainian refugees. In the United States, an advisory on human trafficking
was issued in 2020 early in the pandemic when lockdowns changed traffickers’ methods. The
Financial Crimes Enforcement Network (FinCEN) said it issued that advisory “to help save lives,
and to protect the most vulnerable in our society from predators and cowards who prey on theinnocent and defenceless for money and greed.”
The significance of the Ukrainian refugee problem would seem to warrant its own advisory, butin the interim, we offer a listing of red flags for human trafficking, compiled by the Anti-HumanTrafficking Intelligence Initiative (ATII) from a number of sources, including FinCEN. Thelisting comprises Know Your Customer red flags as well as transactional red flags for both fiat
currency and cryptocurrency.

The real life stories
And, if the inevitability of the trafficking of the Ukrainian refugees and the warnings issued todate are not enough to get you thinking about what you can do to help, read the stories oftrafficked refugees who fled other conflicts. These stories, 6 are from the 2017 exodus of morethan 700,000 Rohingya refugees who fled the violence in their Myanmar homeland toBangladesh:•Mahira, eight years old, was encouraged by a neighbour and her family in a Rohingya
refugee camp to go and work, taking care of a baby in a nearby town. When she got there thelittle girl found herself cut off from her family, working from early morning to late at nightand brutally beaten whenever the baby cried.

•Mariam, a young Rohingya woman, thought the opportunity to leave the refugee campwhere she lived to take up work as a hotel maid in a beach resort would lift her family out ofdestitution. Instead, she was tricked and found herself living in a brothel. The “kind aunty”
who found her the job had sold her into forced prostitution.

•Rashid, a Rohingya father of two, thought he was leaving the refugee camp for a good job inanother country. Abroad in an unknown land, he was imprisoned in a storage container andbrutally beaten within earshot of a telephone call to his family, who were blackmailed to paya ransom for him.

6 “True stories of Trafficked Rohingya Refugees used by IOM to Raise Awareness, Counter Risks in Bangladesh,”reliefweb, June 22, 2018, www.reliefweb.int/report/bangladesh/true-stories-trafficked-rohingya-refugeesused-iom-raise-awareness-counter-risks.

Insights ● 3

The names of the refugees are not real, but their stories are – and their stories will be repeatedwith Ukrainian refugees.

What financial institutions can (and should) doThe Ukrainian refugee crisis is shining a brighter light on the risks of human trafficking, but thereality is that human trafficking is everywhere, every day.
Human trafficking is a predicate crime to money laundering in many jurisdictions, and in theU.S. it is included in the National AML Priorities published by FinCEN in June 2021. Even morecompellingly, however, it is a crime against humanity. Financial institutions may not be in aposition to stop human traffickers at their source, but they can play a key role in identifying thetraffickers and working with law enforcement to stop them – and there are some outstanding
examples of financial institutions that have stepped up to this challenge.
For those financial institutions still needing to mature their anti-human trafficking efforts, thefirst steps in combatting human trafficking are:
1. Understand the risks: Understand the human trafficking risks that may impact yourorganisation because of your client base and the markets in which you do business.
Make sure these risks are incorporated into your organisation’s AML risk assessment.
2. Create awareness: Make sure that AML training includes a discussion of humantrafficking risks and typologies and that front line personnel, in particular, are able tospot the signs an individual is a trafficking victim.
3. Know your customers: Ensure that those who perform due diligence and enhanced
due diligence procedures for businesses that are at higher risk for trafficking are mindfulof the risks and ask the right questions.
4. Evaluate transaction monitoring capabilities: Review the transaction monitoringand data analytic routines available for identifying possible trafficking today anddetermine whether they can be expanded or enhanced.
5. Partner with anti-human trafficking organisations and law enforcement:
Forge alliances with not-for-profits, including ATII and others, and law enforcement
agencies that can help alert your organisation to emerging threats.
6. Consider the broader context: Combatting human trafficking is more than an AML
issue. Protecting human rights should be an anchor of your organisation’s ESG policy.

Insights ● 4

And, if this all just seems like more work you are asking your overburdened compliance function
to do, remember why you are doing it: “to help save lives, and to protect the most vulnerable inour society from predators and cowards who prey on the innocent and defenceless for moneyand greed.”

About Protiviti’s Financial Crimes PracticeProtiviti’s Financial Crimes practice specializes in helping financial institutions satisfy theirregulatory obligations and reduce their financial crime exposure using a combination of
AML/CTF and sanctions risk assessment, control enhancements and change capability todeliver effective operational risk and compliance frameworks. Our team of specialists assistsorganisations with protecting their brand and reputation by proactively advising on theirvulnerability to financial crime, fraud and corruption, professional misconduct, and otherfinancial business risk issues.

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