Stop the Money, Stop the Abuse: Money is Exchanged Every Day for the Real-Time Abuse of Children Worldwide
Online Sexual Exploitation of Children
You might be surprised to know that our banks can play a critical role in stop child sexual abuse. Beyond a legal requirement of reporting suspicious transactions, can banks help end Online Sexual Exploitation of Children (OSEC) globally?
In November 2024, International Justice Mission was invited to speak at “Out of the Shadows,” a virtual conference organized by FINTRAC and ECOFEL to answer this question. The mix of Canadian and international experts outlined how the financial sector can better protect children from human trafficking, child sexual abuse, and internet crimes against children.
OSEC involves trafficking children to create new child sexual abuse materials, usually involving the livestream abuse of children directed by paying customers from other countries.
The Government of Canada defines human trafficking as the recruitment, transportation, harbouring and/or exercising control, direction or influence over the movements of a person to exploit them, typically through sexual exploitation or forced labour. For human trafficking cases of online child sexual exploitation, there are three parties involved:
- The customer paying for and directing the abuse
- A trafficker who has access to vulnerable children negotiates the transaction, and orchestrates the abuse
- The victim who is compelled through threats, financial benefit, or other forms of abuse by the trafficker to fulfill the directions of the customer
IJM Director of Law Enforcement and Capacity Building, David Ruggiero, has worked since 2017 to support Philippine Law Enforcement in fighting OSEC. He was invited to share his experiences and recommendations for law enforcement and financial institutions, starting with a learning from his first OSEC investigation, working to support Philippine law enforcement.
Every day platforms are being used to facilitate OSEC
Ruggiero explained in graphic detail, how a trafficker explained painful sex acts she was willing to inflict on her children for a fee. “It was just business to her; she could have just as easily been selling fruit in a local market.” Ruggiero shared. “Even more shocking was when the negotiation turned to the price. She provided a long list of payment platforms that could be used to transfer funds, and the abuse would begin as soon as she received the money.”
Ruggiero illustrated that for this crime to exist, the customer and trafficker need a means of transferring money as well as a social media and/or telecommunication platform where they can meet, negotiate, and display the live abuse. Every day, legitimate money service businesses are being used to facilitate OSEC, and Canadians are among those paying for the abuse.
The Philippines Anti-Money Laundering Council (AMLC) report revealed that in 2022, AMLC received 92,200 suspicious transaction reports (STRs) related to OSEC from financial institutions. From mid-2020 to the end of 2022, AMLC analyzed 182,729 OSEC-related STRs, totaling PhP 1.56 billion (over USD 27 million), with 81% being foreign remittances. The United States, the United Kingdom, Australia, and Canada were the top money sending countries. Canada has consistently ranked fourth in sending funds flagged for child sexual exploitation material in the Philippines since 2015.
Between 2020 and 2022, there were 6,880 OSEC-related remittances from Canada, amounting to nearly CAD 900,000. With abuse costing as little as $10, depending on the act and number of children involved, this accounts for thousands of cases of abuse against children in the Philippines.
In 2023, IJM partnered with the University of Nottingham Rights Lab to conduct a study estimating the prevalence of OSEC in the Philippines called the “Scale of Harm.” The study resulted in seven recommendations, including “to expedite the detection, reporting, and blocking of suspicious financial transactions.” It further emphasized that “Banks and money service businesses must act with urgency to:
- implement effective transaction monitoring to detect suspicious payments indicative of online sexual abuse and exploitation of children (OSEC),
- apply enhanced due diligence if suspicions exist, expedite suspicious reporting, and block payments involving known or suspected offenders and traffickers.”
Moving towards child protection
Ruggiero encouraged the Canadian and global financial sector to take responsibility for financial transactions happening on their platforms and reduce global OSEC through:
- Interdiction: Financial Institutions and Money Service Businesses must make every effort to stop the payments before they are sent and prevent the abuse from ever taking place just as it would to prevent monies from being directed towards terror groups or weapons of mass destruction.
- Timely Reporting: The financial sector must provide timely and critical evidence that is necessary for law enforcement to intervene and protect children.
- Child Safeguarding: Policies and practices must be enacted to address the current enabling environment for child exploitation in the financial sector.
- Mindset Shift: The financial sector needs to move from a compliance model to a child protection model.
“If an individual entered your financial institution wielding a weapon and threatening to harm your customers and employees, you would immediately call for emergency help.” Ruggiero analogized, “In situations of imminent harm to a child, we must bypass the traditional model of compliance and ensure financial institutions are taking every possible step to protect children.”
*Stock images. Subject depicted is not a survivor of OSEC, and images are used with consent.
The truth is money is exchanged every day for the real-time abuse of children worldwide using Canadian bank accounts and payment platforms.
And too often, when financial institutions learn of real-time harm to children, they send off a report hoping someone will read it and do something about it. Many are satisfied with compliance to minimum legal requirements, but with over 500,000 victims of OSEC in the Philippines in 2022, Ruggiero urged the financial sector to move beyond compliance to child protection.
Financial institutions must take responsibility for the harm caused through client transactions and continue building an environment that prevents child exploitation. IJM calls on Canadian banks and financial platforms to help stop the payments to stop the abuse.
For more information, visit www.ijm.ca/scaleofharm
If you work at a Canadian financial institution and want to learn more, please contact advocacy@ijm.ca.