Empowering Financial Institutions to Fight Human Trafficking Act of 2018

Floor Speech

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Mrs. WAGNER. Mr. Speaker, I thank Representative Tipton. I rise today to speak on behalf of the bipartisan Empowering Financial Institutions to Fight Human Trafficking Act.

The International Labor Organization estimates that, globally, over 40 million people were victims of human trafficking in 2016. It is obvious that in order to deter the criminals who enslave and sell human beings, we need to hit them where it hurts: their bank accounts.

Right now, financial institutions are attempting to identify human trafficking activity, but many suspicious activity reports are based on false flags. Financial institutions are largely left alone to determine what information is valid. Without good, specific, verifiable, targeted information, financial institutions may wrongly identify people, overrespond, and overtarget, or fail to recognize criminal activity.

Finding the traffickers who take advantage of our financial system can be a daunting task. We need to figure out how to do it better. This legislation is an opportunity to help financial institutions wade through the muck and locate bad actors.

This summer, the Financial Action Task Force released a report that identified significant challenges in detecting, investigating, and prosecuting laundering related to human trafficking, including, ``incomplete domestic information sharing among stakeholders.''

That is why I was proud to introduce the Empowering Financial Institutions to Fight Human Trafficking Act with my colleague and fellow advocate, Congresswoman Maloney, along with Congresswoman Love, Congresswoman Tenney, and Congresswoman Sinema.

Over the past year, I have worked in the Financial Services Committee to explore how human traffickers exploit U.S. financial markets. In January, the Subcommittee on Oversight and Investigations, which I chaired, held a hearing to examine how financial institutions monitor accounts and identify trafficking. We know that if traffickers can't finance their operations, they can't profit from their crimes.

This bill creates a pathway for registered nonprofits to safely provide valuable information on trafficking crimes to financial institutions, without the threat of defamation suits that could end their organizations.

Throughout the process of crafting this bill, I have found that banks are increasingly seeking actionable information from the nonprofits that specialize in gathering it. It is incredibly challenging for financial institutions to pinpoint trafficking crimes that are happening far away in mines, in fields, in factories, hotels, or boats, obscured from analysts who are trying to practice good customer due diligence.

Let me be clear, Mr. Speaker. This legislation instructs the Secretary of the Treasury to develop a process that will make civil society experts more available to financial institutions and establish transparent standards for information sharing.

The bill guides the Secretary to register only NGOs that have the rigor and expertise to substantiate their claims and correct any inaccurate information.

I am excited that we are finding ways to connect those who have good intelligence with those who are seeking it without exposing nonprofits to devastating lawsuits they can ill afford. This system will target verified traffickers and reduce reliance on nonspecific information that can target innocent people.

I look forward to casting my vote to prevent human traffickers from using the U.S. financial system to exploit victims around the world. Together, this Congress can disrupt the networks that make modern-day slavery profitable and free vulnerable people around the world who have been enslaved.

In closing, I would like to reiterate, despite what some have said about this piece of legislation, that this legislation requires NGOs to register with Treasury in order to create a process that protects only rigorous, credible organizations that can offer verifiable information to financial institutions. This process will safeguard innocent people and entities that may currently be targeted by the broad, general patterns that are reported to financial institutions.

At present, there is no way for financial institutions to wade through all the tips and information they receive and use it to prevent traffickers from using our financial systems. We need a meaningful system that can actually identify traffickers and allow banks to verify those IDs. That is what this bill does.

I would also like to make clear that this piece of legislation does not amend or touch the PATRIOT Act and does not create any new structures for banks to share information with each other.

This legislation is supported by organizations, including, Mr. Speaker, Western Union, MoneyGram, and Liberty Asia. It also happens to be one of the key recommendations from Polaris' groundbreaking new report: ``A Road Map for Systems and Industries to Prevent and Disrupt Human Trafficking.''

Mr. Speaker, I include the report in the Record.

2. Pass legislation to provide safe harbor to facilitate information sharing between civil society and financial institutions

NGOs that work with survivors and vulnerable populations often have access to critical information about bad actors. Regulations focused on the sharing of information between financial institutions or between financial institutions and government agencies, such as Section 314(a) and (b) of the USA Patriot Act or the regulations for filing Suspicious Activity Reports (SARs), provide appropriate protections for such sharing. No such protections are currently available to NGOs for sharing critical information that may assist in the detection, deterrence or prevention of trafficking.

While NGO's are currently able to report tips directly to law enforcement, the information may be too limited to realistically spur law enforcement action--often because the information is obtained from confidential sources who cannot be contacted by law enforcement. However, if these leads were provided to financial institutions, the financial institutions may be able to assist in providing additional, relevant, and actionable information to law enforcement.

Addressing the liability concerns of NGO's which wish to participate in information exchanges is an important first step in actualizing this process. Legislation is required to provide these protections to NGOs. Once this barrier is removed, law enforcement, NGO's, and financial institutions can work together to develop agreed upon processes and protocols that govern appropriate information sharing.

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Mrs. WAGNER. Mr. Speaker, Dow Jones has said that the information provided to it from NGOs like Liberty Asia and others is relevant and actionable in its anti-money laundering work.

This bill enables FinCEN and financial institutions to gather hard intelligence that can be verified or disproven, rather than rely on, as I said, general, useless, or even faulty tips from nonprofits, private citizens, and other sources without technical experience that could lead to false identifications and persecution of innocent actors.

It is the lack of verifiable specificity and the lack of regulated accreditation that allows for the targeting of innocent groups.

This bill creates a process, run by Treasury, where responsible nonprofits that professionally analyze information and create intelligence products that help financial institutions better identify these crimes can share information without worrying about whether sharing this information is going to end their organizations.

I could go on and on, but Members of this body should never forget what we are doing today is protecting the 40 million victims of trafficking around the world.

Human trafficking is a horrific crime that represents $150 billion per year, and it is far too often funded by the U.S. financial system. This is preventable, and today, we are taking steps towards ending America's financing of exploitation of our most vulnerable.

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