Picture this: You’re a financial services provider who has observed a sudden escalation in payments by a client to an overseas account. 

The transactions had started off as small amounts once every few weeks or so. Now they’re higher and more frequent. The payment descriptions seem innocent – ‘school fees’ or ‘gift’. However, this recent escalation is followed by the purchase of an airline ticket to that country, one classified as high-risk for child sexual exploitation.

You decide you’ve seen enough to submit a suspicious matter report (SMR) to AUSTRAC. 

You might have just helped rescue a child. 

Financial intelligence matters

“This National Child Protection Week, we remind financial service providers that they play an important role in combating this horrendous crime of children being sexually abused for financial gain,” says Jon Brewer, Acting Deputy CEO Intelligence at AUSTRAC. 

“Their suspicious matter reports have provided timely and vital information that has led to the arrests of those responsible, both in Australia and overseas.” 

In one case a few years ago, financial intelligence identified an Australian man as sending funds to a known child sexual exploitation facilitator in the Philippines. Analysis identified payments consistent with the purchase of child sexual exploitation material, with the offender watching online while victims were exploited in the Philippines. 

After law enforcement agencies were notified, the offender was arrested in 2020 and charged with 58 offences including persistent sexual abuse of a child outside Australia, procuring a child to engage in sexual activity outside Australia and soliciting and possessing child abuse material. He’d paid more than $400,000 to sexually abuse children overseas. His victims were as young as seven years old. In 2022, he was sentenced to 14 years in prison. 

Everyone’s responsibility 

“Payment for child exploitation can be difficult to detect because offenders go to incredible lengths to hide their crimes,” said Mr Brewer. 

Instances of exploitation that involve a financial footprint include live distance child abuse, travelling to offend, sexual extortion of minors for financial gain, domestic self-production and the purchase of child-like sex dolls.

While no single financial indicator can reveal if an account is being used for child sexual exploitation purposes, financial service providers should use a combination of indicators and knowledge of their business to carry out further monitoring. 

“If you suspect a person or a transaction is linked to child exploitation or other crime, you must submit a suspicious matter report,” added Mr Brewer.

“Child protection is everyone’s responsibility.

“So it’s important for law enforcement agencies, government agencies and financial institutions to continue working together.”

AUSTRAC’s financial crime guide on child sexual exploitation is a helpful resource that details the financial, environmental and social indicators of this crime.  

For more on National Child Protection Week, visit the National Association for Prevention of Child Abuse and Neglect (NAPCAN) website.