Asset Recovery and Restitution

Asset Recovery and Restitution

Asset Recovery and Restitution

Leveraging Inter-agency and Multi-stakeholder Cooperation to Facilitate Compensation for Victims and Survivors of Forced Labour and Human Trafficking

In recent years, respective jurisdictions have introduced or announced an intention to introduce bans to prevent the importation and use of goods produced by forced labour; import bans in the USA, Canada, and Mexico, and a Proposal for a regulation on prohibiting products made with forced labour on the European Union market are most noted in this regard. Such legislative and policy developments have provided opportunities to re-centre the provision of compensation and other forms of remedy to victims and survivors of forced labour and/or human trafficking in the global discourse on the efficacy of antislavery measures such as import bans. The focus of this study on forced labour and human trafficking (through which forced labour could occur) draws from the focus on forced labour in the current import ban regimes and in the proposed regulation to prohibit products made using forced labour on the internal market of the European Union. Canada is the only exception as it recently added child labour to its import ban (after the research for this report had been completed). Including a focus on human trafficking also ensures that almost all jurisdictions are covered, as there are many States that have yet to recognize forced labour as a distinct criminal offence – and a predicate offence for money laundering – whereas human trafficking is a criminal offence in almost all States.

This Paper argues that forced labour import bans (and prohibitions of products made with forced labour), if combined with anti-money laundering measures (identifying, freezing, seizing, and confiscating assets and proceeds derived from forced labour and/or human trafficking) and inter-agency and multi-stakeholder cooperation, could contribute to a reduction of the current gap in the provision of remedy to victims/ survivors of forced labour and/or human trafficking. In a global context in which approximately $150 billion in profits is generated from forced labour per year, the realization of the right of victims to remedy could also result in accountability from corporations that commit or support human rights violations.

During the conduct of this study, questionnaires were distributed to representatives from governments, multilateral organizations, the private sector, and civil society. The number of responses to the respective questionnaires, by agency, can be seen as follows: financial intelligence units (FIUs, nine), Ministries of Justice and similar ministries/institutions (six), law enforcement (one), customs authorities (three), the Wolfsberg Group (one), the members of the Wolfsberg Group (two), the Egmont Group (one), and civil society organizations (CSOs, 24). This was in an effort to understand how, and the extent to which, respective agencies/entities have engaged in individual and particularly collaborative efforts to facilitate or enable financial compensation for victims/survivors of human trafficking and/or forced labour. Issues covered in these questionnaires were diverse and included coverage of the following: investigations into proceeds laundered from human trafficking and/or forced labour, the freezing and seizing of assets and/or proceeds derived from human trafficking and/or forced labour, the provision of information and/ or evidence regarding goods produced by forced labour and/or human trafficking, financial education/literacy for victims/survivors, and compensation to victims/survivors (responsibility, delivery, and access).

Based on feedback from stakeholders, some agencies/ entities have either received or delivered training pertaining to undertaking investigations into proceeds laundered from human trafficking/forced labour. In contrast, a significantly smaller proportion have received training regarding the identification of cases where asset recovery for victims/survivors should take place, as well as the freezing and seizure of assets linked with human trafficking and/or forced labour. While not necessarily due to such trends in training, the work of a larger proportion of agencies/entities has triggered investigations into proceeds laundered from human trafficking and/or forced labour. In contrast, a smaller proportion of agencies/entities have provided support Executive Summary 8 Asset Recovery and Restitution towards the freezing and/or seizure of assets/proceeds linked with human trafficking and/or forced labour.

Only some representatives from Ministries of Justice (three) and CSOs (nineteen) indicated their experience of supporting legal or administrative proceedings to use seized assets or proceeds to compensate victims/ survivors of human trafficking and/or forced labour; compensation was forthcoming in two (66.7 per cent) and nine (47.4 per cent) of these cases, respectively. In the Ministry of Justice cases, compensation was sourced from individuals/companies in both the country where the worker was exploited and the country where the goods produced by forced labour and/or victims/ survivors of human trafficking were sold. Notwithstanding the small number of cases emerging from respondents where victims/survivors were compensated, the majority of respondents across FIUs, customs authorities, law enforcement, Ministries of Justice, and CSOs believed in shared responsibility for the provision of compensation: compensation should be provided by both the responsible individual(s)/company/ies in the country where the worker was exploited, and the profiting individual(s)/ company/ies in the country where the goods produced by victims of forced labour and/or human trafficking were sold.

Collaboration across agencies/entities in the realm of investigations, asset freezing and seizing, and compensation has likewise followed the patterns above, with most collaboration taking place for the purpose of making investigations into proceeds laundered from human trafficking and/or forced labour. Such collaborations have involved both domestic agencies, as well as agencies based overseas. For example, in the realm of investigations, with a focus on domestic agencies/entities, FIUs had the greatest collaboration with law enforcement authorities and financial institutions. For investigations and collaboration with overseas-based agencies/entities, FIUs had the greatest collaboration with fellow FIUs and financial institutions. Regarding the facilitation of compensation among domestic agencies, Ministries of Justice largely collaborated with FIUs, financial institutions, law enforcement, and customs authorities, although the Public Prosecution Service of the Netherlands also collaborated with their tax, social security, and local authorities towards this end.

Ministries of Justice also collaborated with overseasbased law enforcement, financial institutions, and FIUs for the purpose of facilitating compensation for victims/ survivors. In contrast, CSOs collaborated with (in order of precedence) law enforcement authorities, Ministries of Justice, FIUs, and other agencies/entities for the purpose of facilitating compensation for victims/survivors. Ministries of Justice indicated challenges in collaborating with local agencies/entities in the realm of compensation: the difficulty of combining different types of information into databases, possibly due to privacy laws, and the difficulty in establishing coordination and cooperation among agencies/entities. Challenges experienced by CSOs in this regard include the following: difficulties in victims/survivors accessing administrative remedies without the help of an attorney due to extreme bureaucracy, the lack of resources of victims/survivors to hire legal representation to claim their compensation, and the fact that some agencies do not focus on victim assistance. Further, Ministries of Justice and/or collaborating agencies/entities indicated a number of challenges in gaining compensation for victims/survivors. Such challenges related to establishing relationships with companies in countries where workers are exploited, tracing proceeds, the need for a confiscation procedure in some jurisdictions, and the need for courts to receive more training.

While government ministries are instrumental to victim compensation, supported by the establishment of guidelines, standards, and regimes pertaining to asset recovery, CSOs play a crucial role in providing information and evidence to respective agencies on companies that produce goods by forced labour and/ or human trafficking. Such information-sharing by CSOs is viewed within a context where the issuing of orders by US Customs and Border Protection to prevent the importation of goods produced by forced labour has sometimes been preceded by the provision of information and evidence by CSOs on goods produced by forced labour. As seen from questionnaire responses, target CSOs have largely (though not exclusively) provided information and evidence, respectively, to local law enforcement agencies and FIUs, as well as overseas-based law enforcement agencies and customs authorities.

There were differing perceptions about who was responsible for ensuring that victims (including families where victims are deceased) and survivors receive compensation once illegal assets are seized: a mixture (in order of preference) of the relevant government agencies in the country of origin, the relevant government agencies in the country where exploitation occurred, CSOs representing the victims/survivors and/or their families, and the relevant government agencies in the market state.

While some efforts made by respective agencies/ entities have resulted in the enabling of compensation of victims/survivors of forced labour and/or human Asset Recovery and Restitution 9 trafficking, the ability of victims/survivors to access this compensation and to be equipped with the capacities to use this compensation are not automatically addressed or guaranteed. The majority (80 per cent) of CSO questionnaire respondents across all represented countries placed a high level of importance on financial education/literacy for victims/survivors. In some cases, CSOs and other organizations provided financial education to victims/survivors of human trafficking who received or were expected to receive compensation. The top challenge faced by all responding agencies/entities in the delivery of compensation to victims/survivors was that victims/survivors could not access compensation if it was paid to an account from a regulated financial institution other than a bank (for example, mobile money service provider) – a possible indication that survivors are more likely to have mobile wallets than bank accounts. This was closely followed by the challenge of victims/ survivors not having access to a bank account, and the challenge of finding/tracing survivors.

This research paper makes a number of recommendations pertaining to the topics of anti-money laundering, asset recovery, the provision of compensation to victims/survivors, and the pursuit of inter-agency and multi-stakeholder collaboration to enable and facilitate compensation. These are directed towards States, specific government agencies, multilateral organizations, financial institutions, asset recovery interagency networks, and CSOs. It is hoped that these recommendations, along with the insights provided in this report will make apparent the opportunity that import bans present for inter-agency/entity collaboration and cooperation towards facilitating and enabling greater recovery of assets/proceeds from human trafficking and forced labour (and the sale of goods produced through these offences), compensation for victims/survivors, and a significant reduction of the current, persisting remedy gap.

Read and download full report here.