Migrant Smuggling

Migrant Smuggling

Dive into the hidden world of migrant smuggling and its alarming financial repercussions. With millions seeking refuge from conflicts, political instability, and poverty, this global crisis generates staggering proceeds, estimated at over $10 billion annually. Explore the eye-opening insights from the FATF report, shedding light on the critical money laundering and terrorist financing risks associated with migrant smuggling.

FATF

The FATF (Financial Action Task Force) report on „Money Laundering and Terrorist Financing Risks Arising from Migrant Smuggling“ sheds light on the significant financial dimension of the global issue of migrant smuggling. This illicit activity, driven by the desperation of millions seeking refuge from adversities such as regional conflicts and poverty, generates over USD 10 billion annually, posing substantial risks for money laundering and terrorist financing.

Despite the escalating scale of migrant smuggling, many nations do not prioritize it as a critical threat for money laundering, leading to a lack of investigation into the financial trails it leaves behind. The FATF report delves into the prevalent methods employed to move and cleanse the illicit proceeds of this crime. These methods range from traditional informal value transfer systems like hawala to the assimilation of funds into seemingly legitimate businesses, including retail outlets, travel agencies, and transportation firms. Moreover, the report underscores the growing role of professional money launderers in these operations.

Drawing from the experiences of various countries, the FATF provides a set of recommendations and best practices aimed at enhancing the capability of authorities to trace and investigate the financial transactions linked to migrant smuggling. These include the imperative for nations to comprehend the specific risks they face from this criminal endeavor and to adopt a proactive stance in tracking the associated financial flows. This approach necessitates heightened cooperation both within countries and across international borders, engaging with a broad spectrum of stakeholders from government bodies to the private sector.

The report emphasizes the critical need for bolstered institutional, international, and regional collaboration, especially in supporting nations that bear the brunt of migrant smuggling activities. By urging countries to adopt a more aggressive strategy in „following the money,“ the FATF aims to disrupt the financial networks that fuel this illicit trade, thereby mitigating the risks of money laundering and terrorist financing associated with migrant smuggling.

Red Flags related to Migrant Smuggling

  • Cash withdrawals and money transfers through payment institutions.
  • High number of deposits of cash in accounts.
  • Money transactions to various accounts and banks (spread of the proceeds).
  • Investments in real estate/high value goods.
  • Cross border transport of money the intended use of which cannot be explained.
  • No explanation about the origin of the funds.

Red Flags related to Money Laundering

  • Numerous transactions with money remittance companies and online payment
    services companies. Sometimes there is no logical reason to use a range of
    remitters.
  • Foreign/Migrants using the same IP or machine ID to perform transactions.
  • Transfer remittance through third parties “money mules”.
  • Remittances to a different province or country of prior residence or citizenship.
  • Immediate liquidation of money.
  • Use of Hawala/Hundi transaction system.
  • Repeated receipts or fund transfers of relevant overall amount from/to several counterparties abroad.
  • Money flows of relevant amount within a short time period.
  • Transactions through prepaid cards in areas far from the ordinary place of
    residence/domicile of their holders.
  • Recharging transactions between prepaid cards held by foreign nationals, living or
    operating in places close to reception centers for immigrants or to border crossing
    points.
  • Transactions involved persons with criminal records for migrant smuggling and
    human trafficking.
  • Deposit of money in foreign currency accounts.
  • Regular gambling activity interspersed with remittance and deposit activity.
  • Suspicious matter reporting indicating regular cash withdrawals at or outside of
    casinos.
  • Use of front cash intensive legitimate businesses.
  • Abnormal payments to hotels, apartments and other accommodation services that
    are located on or close to migrant smuggling routes.

Red Flags related to Terrorist financing

  • Foreign nationals, recently immigrated [into the jurisdiction], who:
    • live or work in places close to reception centers for immigrants, or border
      crossings or logistic hubs along migration routes;
    • work as MVTS Agents;
    • hold different prepaid reloadable cards issued in different places – such as above –
      , often far from each other;
    • are registered by the Customs Agency for cross-border cash transfers (in the case
      of the said MVTS Agents, this would trigger suspicions that the criminal proceeds
      could have been laundered by commingling them with the MVTS proceeds and also
      used for informal hawala-style money transfer systems);
  • Intertwisted MVTS transfers and/or card-reloading transactions of huge overall
    amounts, performed by the same unemployed individual in different regions;
  • POS payments bearing descriptions about purchase of travel tickets to and/or
    stays in Central-Northern European countries;
  • Links to individuals known (as per confidential information) to be close to:
    • terrorist organizations or
    • military organizations in countries rated high-risk for terrorism or
    • radical environments/groups (with particular reference to individuals playing
      official or managing roles in cultural-religious associations suspected of
      radicalism).
  • Transactions through prepaid cards performed also in areas far from the ordinary
    place of residence/domicile of their holders, with particular reference to the towns
    constituting logistical hubs of the national transport network (highways, railways,
    ports and airports);
  • Recharging transactions between prepaid cards held by foreign nationals, living or
    operating in places close to close to reception centers for immigrants or to border
    crossing points, without an economic or professional activity that could justify
    their transactions;
  • Owners, managers or employees of MVTS Agencies involved in the network of
    recharging transactions in any capacity (as cardholders, as well as transaction
    performers).

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