Financial Crime

5 Key Takeaways From Recent FinCEN Alert on Human Smuggling on the Southwest Border

The Financial Crimes Enforcement Network (FinCEN) released a new alert focused on human smuggling and trafficking across the United States’ southwestern border.

This alert comprised guidance on relevant red flags, typologies, and SAR filing tips for financial institutions to help them detect and report suspicious transactions suggestive of human smuggling.

This blog shares key takeaways and red flags, providing a quick summary of the FinCEN alert.

FinCEN Alert on Human Smuggling

The FinCEN alert on human smuggling is focused on the Southwest Border of the United States. The following are the key pointers for financial institutions:

1. Human smuggling (HS) across the Southwest border of the United States generates ~$2 to $6 billion in yearly revenue.

2. Human smuggling typically occurs in two phases: solicitation and transportation. Often, smuggling networks not directly involved with large criminal organizations pay “protection tax” to TCOs along their routes.

3. The main illicit finance typologies include cash placement and layering into the formal financial system, alternative payment methods (such as P2P), and funnel accounts.

4. Cash is primarily used by migrants to pay smugglers. Therefore, smugglers are often involved in bulk cash smuggling and cash purchases of high-value assets.

5. SAR Filing instructions include using the term “FIN-2023- HUMANSMUGGLING” in SAR Field 2 and the narrative, while also selecting SAR Field 38(g) (human smuggling).

AML/CFT Red Flags Related to Human Smuggling

Financial institutions need to watch out for the following red flags when investigating potentially suspicious transactions related to human smuggling:

  • Multiple wire transfers, P2P payments, or cash deposits to one beneficiary from different geographical locations across the U.S., Mexico, and Central America
  • Deposits by several individuals from multiple locations into one beneficiary account
  • Individuals making larger deposits, including cash, than those in similar professions or businesses
  • Customers who are not in the cash-intensive industry exchanging smaller denomination bills for larger denomination bills
  • Customers making inconsistent cash deposits
  • Extensive use of cash to purchase assets, including but not limited to real estate.

Domain-Centric Approach to Meeting AML and CFT Compliance

Deterring human trafficking and human smuggling is one of the FinCEN’s key priorities for countering the financing of terrorism (CFT) and anti-money laundering (AML) activities.

While human smuggling and human trafficking are not the same, they both are used for moving illegitimate money across borders. Thus, financial institutions should prioritize identifying suspicious activities related to human smuggling.

As a strategic partner, Anaptyss can provide financial institutions with tailored guidance and domain-specific consultative expertise. Leveraging the proprietary Digital Knowledge Operations™ framework, Anaptyss can improve their AML/CFT compliance capabilities and help them meet regulatory obligations.

Read the complete FinCEN advisory on human smuggling here.

Tasneem Abdulrahman

Manager - AML Compliance

Tasneem is an accomplished professional with 15+ years of experience in the global financial crime compliance industry. Her expertise spans Regulatory Compliance, AML Risk and Governance, Project Management, and Control Testing and Remediation, including audits and strategic management of operational risk events.

Leave a Reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.