UK’s HM Treasury Uses Sanctions to Target Human Trafficking Scam Networks in Southeast Asia

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UK’s HM Treasury Uses Sanctions to Target Human Trafficking Scam Networks in Southeast Asia

On December 8, the UK's HM Treasury announced financial sanctions for human rights violations against individuals and entities connected to Malaysia, Cambodia, Myanmar, Thailand, China, and Laos for their involvement in the trafficking of individuals forced to work as scammers targeting English-speaking individuals. 

The victims, according to the designation, are subject to physical abuse and further cruel, inhuman and degrading treatment or punishment.

The sanctioned individuals were primarily executives of sanctioned entities such as Golden Sun Sky Entertainment, Heng He Casino, K.B. Hotel, Golden Phoenix Entertainment City and other hotels and entertainment complexes located in Cambodia. HM Treasury's designations assert that these entities have been "involved in facilitating, providing support for and concealing evidence of an activity that violates the right not to be subjected to torture or cruel, inhuman or degrading treatment or punishment or the right not to be required to perform forced or compulsory labour."

According to a report by the United Nations, thousands of victims are trafficked across Southeast Asia and brutally forced to engage in pig butchering and other scams. While the recent UK sanctions do not specifically mention pig butchering, the descriptions of the conduct and the entities and locations identified are consistent with the UN report.

The UN report says that at least 120,000 people across Myanmar are held in scam compounds or situations where they are forced to carry out scams, and a further 100,000 in Cambodia. Laos, the Philippines and Thailand are also identified as countries of “destination or transit” for tens of thousands of people. A July 2023 report from the Pulitzer Center takes a deep dive into some of the entities sanctioned by HM Treasury.

In pig butchering schemes, scammers encounter victims on dating sites, social media websites, or even random texts masquerading as a wrong number. Scammers initiate relationships with victims and slowly gain their trust, eventually introducing the idea of making a business investment using cryptocurrency. Victims are persuaded, over time, to invest more and more money and send those funds to a fake investment app. Once the scammer gets as much money out of the victim as possible, the scammer vanishes with all the victim’s money. The term “pig butchering” comes from the idea of “fattening” up the victim as much as possible before stealing the funds. These cases often involve victims who have lost their life savings, leaving the victims devastated and desperate for help. The most recent FBI internet crime report states it received more than 30,000 complaints of cryptocurrency investment fraud, with total losses rising from $907 million in 2021. TRM’s identified about USD 9.04 billion being sent to various types of fraud schemes in 2022, with the large majority going to apparent Ponzi and/or pyramid schemes.

These human rights related sanctions were issued just a few days before the UK’s creation of a new Office of Trade Sanctions Implementation (OTSI). According to HM Treasury’s announcement, the OTSI will be responsible for the civil enforcement of trade sanctions and will help businesses comply with sanctions and investigate potential breaches, issuing civil penalties and referring cases to HMRC for criminal enforcement where needed.

Graph in TRM showing victim funds move through part of a pig butchering money laundering network

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