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Modern Slavery, Money Laundering, Terrorism Financing

Modern Slavery

Understanding who may be involved in modern slavery allows Australian banks to explore the different characteristics of its customers, suppliers, and business relationships.

Working Paper: Typologies and Indicators of Modern Slavery

What is modern slavery and how is it related to the banking industry?

Monitoring and managing the industry’s connections to modern slavery is key to fulfilling these roles and requires bank-wide awareness of modern slavery and how it presents, as well as internal and external information sharing and industry-wide collaboration.

Typologies and Indicators of Modern Slavery Edition 1 March 2022

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Understanding how modern slavery works

There are four key factors which elevate the risk of modern slavery:

  1. vulnerable populations;
  2. high-risk business models;
  3. high-risk categories; and
  4. high-risk geographies.

Typologies and Indicators of Modern Slavery Edition 1 March 2022

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The role of banks in addressing modern slavery

Given the banking industry’s potential for connections to modern slavery through its products and services, corporate operations, and supply chain, addressing modern slavery requires a multi-functional approach.

No one team or business unit can address modern slavery alone, and human rights due diligence should be embedded across banks’ value chains and decision-making.

Typologies and Indicators of Modern Slavery Edition 1 March 2022

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General characteristics of common victims, perpetrators and intermediaries

The agriculture sector is widely known to face high risks of modern slavery, both in Australia and globally. Migrants on visas with working restrictions are most at risk of modern slavery in the agriculture sector.

In the construction sector, an Australian bank conducted an investigation into serious organised crime groups utilising ATMs in the south-west Sydney locality to conduct large scale money laundering and exploit foreign nationals.

Typologies and Indicators of Modern Slavery Edition 1 March 2022

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“At the core of modern slavery is a desire by one or more people to exploit the freedom of others for personal financial gain. There is no room for such abhorrent practices in our modern world. The banking sector will do its part in helping to identify potential cases of such gross violations of human rights.”

ABA CEO Anna Bligh

Money Laundering & Terrorism Financing

The banking industry is committed to supporting the global response to reduce the risks posed by money laundering and terrorism financing.

Banks take their legal obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act seriously and seek to put in appropriate controls to make it harder for the Australian financial system to be used to launder money.

In addition to complying with the regime, ABA members work closely with relevant government agencies, including AUSTRAC and the Department of Home Affairs, to help ensure that the Australian regime meets international best practice.

Sanctions: ABA Guidelines for the Financial Services Sector

These guidelines (updated December 2021) are intended for Australian Banking Association (ABA) member banks. The guidelines are not legally binding. They aim to set out good industry practice for ABA members and their staff in relation to sanctions requirements.

Organisations that are not members of the ABA may have regard to these guidelines as industry good practice, particularly where their industry body has not issued specific guidelines to them on sanctions.

These guidelines will have impact on operational areas, but it is expected that more detailed internal policies and guidance will be developed, specifically tailored to suit the needs of member banks, using these guidelines as a guide to good practice