FinCEN Child Sexual Exploitation
On Sep. 16, FinCEN issued guidance alerting firms of crime, reporting.
- FinCEN issued notice to call attention to online child sexual exploitation crimes (OCSE).
- The notice provides financial institutions with specific suspicious activity report (SAR) filing instructions, as well as highlights some financial trends related to OCSE.
- Background on OCSE
- Crimes related to OCSE, including the funding, production, and distribution of child sexual abuse materials (CSAM), have increased during the COVID-19 pandemic.
- Another trend is the rise in sextortion of minors, who are coerced or exploited into exchanging sexual images via the internet, mobile devices, social media platforms.
- OCSE offenders often groom minors to share or post content online for money.
- OCSE Trends Gleaned from SARs
- FinCEN performed a review of OCSE-related SARs and observed certain trends.
- Including that between 2017 and 2020, there was a 147 percent increase in OCSE-related SAR filings, including a 17 percent year-over-year increase in 2020.
- Also, OCSE offenders are increasingly using convertible virtual currency (CVC) , peer-to-peer mobile apps, darknet, anonymization/encryption services to avoid detection.
- CVC in payment method of choice for OCSE offenders to pay websites that host CSAM.
- FinCEN found that OCSE facilitators attempt to conceal their illicit file sharing and streaming activities by transferring funds via third-party payment processors.
- Suspicious Activity Reporting
- SAR reporting, in conjunction with effective Bank Secrecy Act program, is crucial to identifying and stopping cybercrime, including online child sexual exploitation crimes.
- Financial institutions should provide all pertinent information in the SAR that they file.
- FinCEN requests that financial institutions reference only this notice in SAR field 2 (Filing Institution Note to FinCEN) using the keyword OCSE-FIN-2021-NTC3.
- This keyword should also be referenced in the narrative to indicate a connection between the suspicious activity being reported and activities highlighted in this notice.
- Also select SAR Field 38(z) (Other) as the associated suspicious activity type.
- By selecting SAR Filed 38(z), the institution indicates a connection between suspicious activity reported and OCSE activity; also include the term “OCSE” in the text box.
- If known, enter the subject’s internet based contact with institution in SAR Field 43.
- If human trafficking/smuggling are suspected in addition to OCSE activity, institutions should select SAR Field 38(h) (Human Trafficking) or Field 38(g) (Human Smuggling).
- FinCEN asks that reporting entities use the Child Sexual Exploitation (CSE) terms and definitions in the appendix to the notice when describing suspicious activity in SARs.
||B/D; Bank; MSB; Thrift
|| Nt, FIN-2021-NTC3, 9/16/2021;
||AML; Compliance; Reporting
||United States of America
||Banking; Cryptocurrency; Payments
|Reg. Last Update
||AML & Enforcement
Last substantive update on 09/17/2021