The Business Structure of Human Trafficking Networks

Dr. Angelos Kaskanis

Project Manager - Tactics Institute

The COVID-19 crisis has been detrimental to all business sectors but human trafficking has shown itself to be a resiliently profitable industry. International networks, in cooperation with deep-rooted local criminal outfits, continue to optimise their value chains, maximising profits, turning the crisis into an opportunity.

The police are already overstretched in the strenuous enforcement of day-to-day social distancing measures, often unable to master the resources required to put organised crime on the back foot. Sexual exploitation remains the most detected form of trafficking, however, trafficking of forced labour, organ harvesting, among other nefarious purposes, proliferate.

“Millions of women, children, and men worldwide are out of work, out of school, and without social support in the continuing COVID-19 crisis, leaving them at greater risk of human trafficking. We need targeted action to stop criminal traffickers from taking advantage of the pandemic to exploit the vulnerable,” says UNODC Executive Director Ghada Waly.

A typical corporate structure

The corporate structure of human trafficking groups is sophisticated, shadowing corporate practices in their complexity. Different criminal patterns may relate in different ways to the human trafficking value chain: the production of fake documents, recruitment, transport, money laundering, legal services, are only some elements of a complex business cycle.

But in some respects, human trafficking networks remain old-fashioned.

Organisationally, their structure remains pyramidal, with ownership and management being tied together, not least because the illegal activity requires bonds of trust and interpersonal proximity. Furthermore, managerial skills are not the sole determinants of “merit” in any given hierarchy.

Managerial cultures differ. Some groups form smaller unions, trusts, and “cooperatives,” to subdue emerging rivalries, consolidate competition, raise prices, or pull resources to take advantage of economies of scale.

Another old-fashioned element is that they like dealing in cash and expensive assets.

According to Grahame White of Analysis International, a consultancy with 15 years of experience as an Anti-Money Laundering forensic investigation, “the traffickers/smugglers have great use of cash-intensive businesses, money service businesses, cash couriers, front companies, and investments in high-value goods such as cars and real estate.”

“The use of front companies and cash-intensive businesses for laundering is detected and the transfers of funds are usually fragmented. Real estate investment and purchase of cars seem to be the favourite ways to invest profits,” he adds.

Networks choose some form of international activity as fronts: travel agencies, tourism-related companies, money transfer agencies, etc…

Three patterns often emerge:

  1. Money is sent back to the country of origin of the traffickers where it is often invested in legal businesses such as restaurants, bars, or properties such as apartments or houses;
  2. Money is used both in the country of origin and the country of destination to support a lavish lifestyle for those involved;
  3. Money is invested in other criminal or legitimate activities in the destination country.

Established networks and emerging trends

In the past 15 years, large criminal organizations have made the most of their income through complex and dynamic networking. They depend on trust-based peer-to-peer networks for the recruitment, transportation, transfer, and harbouring of people. Trafficking is usually “an arm” in a cluster of transnational crime operations that can use the same infrastructure to respond to demand arms, drugs, or illicit funds.

“The UK reported the trend of criminals who facilitated the trafficking of individuals from Eastern Europe, confiscated identity documents from those individuals when they arrived in the country and opened bank accounts to gain access to credit through overdrafts, loans, and credit/debit cards. In addition, the accounts were used to obtain tax credits and crisis loans, fraudulently obtained by criminals. Debt accumulated on the accounts and was not paid back to the lender. When the lender tried to contact the account holder to demand payment, the organised criminals sent the trafficked individual back to their home country and the lender lost their money.”

Combating human trafficking

The number of trafficked persons increases as social vulnerability increases.

As the sector of precarious work increases, vulnerability becomes harder to define in normative terms, creating a gray zone in which crime can thrive, creating legitimate businesses that are harder to monitor. In that respect, legislation that empowers and protects whistleblowers and informants is key to an effective anti-trafficking policy.

The problem is likely to get a lot worse before it gets any better. Conflict, state-failure, and two major economic crises within a decade are major push factors of irregular migration, fuelling a thriving business in people smuggling, which accentuates vulnerability and creates a sizable pool of people from which traffickers can draw humans as undignified commodities.

In this context, the fight against human trafficking is a multi-variable equation with many stakeholders. Referrals will require the involvement of unions and the engagement of social services, regional authorities, and the public administration. Security services, in that respect, are only one part of the equation, perhaps not the most decisive one.

After Brexit, there will be an increasing need to bolster border control services, which are now well below capacity as international trade is disrupted and, paradoxically, the ability to control border crossings is strained.

Data collection and the improvement of documentation will require enhanced digital tools, allowing authorities to monitor, apprehend and disrupt illegal activity. Data mining, exploitation, and so-called predictive policing will be increasingly significant in border control operations where the objective is not total but statistically significant monitoring of transport in people and goods. Like most forms of crime, this is a marathon, not a sprint.  

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