Financial investigations of modern slavery offences

This is a report “Financial investigations of modern slavery offences” from a research project funded by the Modern Slavery and Human Rights Policy and Evidence Centre (PEC), part of the University of Oxford, which in turn is funded by the Arts and Humanities Research Council (AHRC). The research was conducted by Dr Alicia Heys, Senior Lecturer in Modern Slavery at the Wilberforce Institute at the University of Hull, and Co-Investigator of the PEC on behalf of the University of Hull. 

Background

Modern slavery is, in most cases, a financially motivated crime. Offending is often accompanied by financial activity, much of which leaves a trace. This raises the central question of whether financial investigations can offer a means of enabling prosecution without the need to rely so heavily on victim evidence, which can be difficult to secure in cases where victims are traumatised, fearful, or do not identify as victims. 

Despite the increasing number of potential victims identified, prosecutions, convictions, and sentences under the Modern Slavery Act remain low. This research sought to answer the question: How might financial investigation techniques be a means to improve prosecution and conviction rates in the UK’s Modern Slavery Act 2015? 

The report is the second in a two-part series. The first focused on identifying and analysing some of the key barriers to successful prosecutions and convictions under the Modern Slavery Act. This second report examines the role and potential of financial investigations as a means of enhancing enforcement outcomes. 

Key Findings 

1. Financial value: Modern slavery is primarily financially motivated. Financial investigations can trace illicit profits, map offender networks, and expose patterns of exploitation.
2. Evidential value: While financial evidence alone may not prove exploitation, it offers a critical means of corroborating other intelligence and reducing reliance on victim testimony. In some cases, it may enable prosecutions without victims giving evidence in court.
3. Disruption and prevention: Confiscation, compensation, and reparation orders can deprive offenders of illicit assets, deter re-offending, and provide some redress to victims. However, these tools remain underused, with slavery and trafficking reparation orders particularly rare.
4. Barriers: Implementation is hampered by shortages of accredited Financial Investigators, limited training and awareness, delays in legislative processes, underuse of the Suspicious Activity Reports, and inconsistent national prioritisation.

5. Outcomes: Convictions remain important for demonstrating success and encouraging victims to come forward, but financial recovery is often a more effective deterrent, and safeguarding victims must remain a central priority.

    

   Key recommendations 

For the Home Office 

1. Collate and publish data with the annual National Referral Mechanism statistics which outlines how many slavery and trafficking reparation orders have been granted.
2. Promote awareness and usage of slavery and trafficking reparation orders through national guidance, training, and dissemination to statutory agencies. 

For police forces and law enforcement 

1. Better training for policy and Financial Investigators on orders such as slavery and trafficking reparation orders.
2. Expand officer training on financial investigations. Financial Investigators should also receive detailed training on what modern slavery is, how it presents, and other crimes it may be associated with. Investigators must also be able to keep on top of changes in methods of money transfer e.g., cryptocurrency, challenger banks, and hawala systems.
3. Senior Investigative Officers undertaking modern slavery investigations should make better use of the Joint Money Laundering Intelligence Taskforce Operations Group for accessing relevant financial intelligence.
4. Financial Investigators should be allocated to modern slavery investigations as early as possible to reduce the length of time an investigation takes.
5. Ensure that Suspicious Activity Reports are investigated and streamlined in modern slavery cases.
6. Develop a national template for data submissions from financial institutions to police to ensure uniformity and usability.

For the Crown Prosecution Service 

1. Equip prosecutors to make full use of slavery and trafficking reparation orders and understand their utility in victim redress.
2. Reduce the reliance on victim testimony by proactively building prosecutions using corroborative digital and financial evidence (e.g., transactions, bank activity, and Suspicious Activity Reports) as standard practice. 

For the judiciary 

1. Follow sentencing guidelines that require courts to consider slavery and trafficking reparation orders in all eligible cases and provide reasons when these are not used.
2. Consider the scale of financial gain in sentencing decisions and ensure financial orders are applied to dismantle profit-based offending structures. 

For banks and financial institutions 

1. Share intelligence with the police when there is a concern. Such reports should include as much detail as possible to allow for quick and efficient policing responses.
2. Implement a standardised format for financial intelligence submissions to enforcement to improve turnaround and usability.
3. Monitor for patterns where individuals accompany others to open bank accounts and trigger alerts when repetition indicates possible concern.
4. Provide training to identify suspicious financial behaviour linked to modern slavery.