The Financial Action Task Force (FATF) launched its latest report on detecting, disrupting, and investigating online child sexual exploitation (OCSE) at an event held at Guildhall, London… writes Harry Morgan.
The event brought together distinguished figures from law enforcement, financial intelligence units, and regulatory bodies to discuss the growing threat of OCSE and explore ways to counter it through financial tracking and collaboration.
The event was welcomed by Tijs Broeke from the Police Authority Board Chair, City of London, setting the stage for discussions on one of the most pressing global crimes.
His Excellency, The Honourable Stephen Francis Smith, Australian High Commissioner to the United Kingdom, addressed the gathering, emphasizing the need for a unified international response to combat child exploitation.
Elisa de Anda Madrazo, President of FATF, delivered a powerful speech highlighting that one in every eight children is subjected to sexual abuse.
She reinforced that FATF’s core mandate is to protect people from financial crimes, and in this case, financial intelligence can play a crucial role in tracking and dismantling criminal networks facilitating OCSE.
She stressed the importance of tracing perpetrators through their digital footprints, while also making a strong plea for a preventive approach—stating that authorities are often present when the crime has already happened, but they must focus on stopping it before it begins.
Abi Harrison from HM Treasury and Stefan Jerga from the Australian Federal Police introduced the FATF report, which presents a detailed analysis of OCSE, categorizing it into two distinct sub-crimes.
The first, Live-streamed Sexual Abuse of Children (LSAC), refers to real-time exploitation where offenders pay to view abuse as it happens.
The second, Financial Sexual Extortion of Children (FSEC), involves perpetrators coercing victims into sending explicit material and then extorting them for money.
The report highlights that both crimes are largely facilitated through financial transactions, making it critical to monitor and identify suspicious financial patterns.
A panel discussion followed, bringing together experts from different sectors to share insights on the challenges of combating OCSE. Jennifer Hasslet of FATF, Ben Donaldson of UK Finance, Jerome Beaumont of the Egmont Group of Financial Intelligence, Callum Hughes of the Australian Federal Police, Martin Grace of the National Crime Agency, Simon Welch of the Serious Organised Crime division, Melissa Saville from the Asia/Pacific Group on Money Laundering, and Nicholas Court from INTERPOL participated in the discussion.
The conversation revolved around the role of financial institutions in detecting illicit transactions, the need for international cooperation, and the importance of intelligence sharing between governments and regulatory bodies.
The panellists acknowledged the increasing complexity of OCSE crimes, particularly with the rise of digital transactions, cryptocurrencies, and anonymous payment platforms, which make it easier for criminals to evade detection.
The FATF report provides a detailed list of financial indicators that can help institutions and authorities detect transactions linked to OCSE. It highlights that payments for live-streamed abuse are often small, repeated, and made to jurisdictions known for child exploitation. These transactions frequently take place late at night or early in the morning, suggesting that offenders are operating across time zones.
Financial institutions can also identify potential perpetrators through payments made to encrypted messaging services, VPN providers, or adult entertainment platforms, often under vague descriptions that do not directly indicate the nature of the transaction.
\Similarly, victims of financial sexual extortion often make rapid, repeated payments of increasing amounts, sometimes labelled as “gifts,” “medical expenses,” or “school fees.” The report urges financial institutions to remain vigilant for such patterns, particularly when transactions involve regions known to be hotspots for OCSE-related crimes.
Perpetrators often exhibit distinct financial behaviours, including immediate withdrawal of received funds, purchasing privacy-enhancing tools, or conducting multiple transactions through accounts under investigation.
The report also notes that some offenders attempt to disguise their payments through online gaming platforms, creator-content subscription services, and digital gift cards.
While no single transaction may raise suspicion on its own, the FATF emphasizes that analyzing multiple indicators together can help financial institutions and law enforcement agencies identify and disrupt these crimes.
The event concluded with closing remarks from the Honourable MP Emma Reynolds, Economic Secretary to the Treasury. She reiterated the urgent need for international collaboration in tackling OCSE and emphasized the importance of leveraging financial intelligence to prevent these crimes before they occur.
She expressed gratitude to FATF for its comprehensive report and thanked all attendees on behalf of the UK. She assured the audience that decisive action would be taken to combat these crimes and bring perpetrators to justice.
Elisa de Anda Madrazo echoed this sentiment, underscoring the necessity of proactive intervention. She emphasized that while tracking and prosecuting offenders is crucial, the ultimate goal should be prevention.
Praising the quality of the report, Ben Donaldson described it as “a first-class, excellent piece of work.” The FATF report serves as a vital tool in this effort, providing actionable insights for financial institutions, policymakers, and law enforcement agencies worldwide.
The launch of this report marks a significant step in the fight against online child sexual exploitation.
By leveraging financial intelligence and enhancing cooperation between countries, authorities can better identify, investigate, and dismantle criminal networks involved in these heinous activities.
The FATF calls upon governments, financial institutions, and technology companies to take urgent action in implementing the recommendations outlined in the report, ensuring that those who exploit children are identified and brought to justice.
