■ ■ ■ A man in Washington State convicted after recruiting runaway
minors with promises of food and shelter in return for money
earned by prostitution; 5
■ ■ ■ A man and woman in Washington State were convicted after
forcing a 19-year-old woman into servitude by withholding
her passport and other identification documents, and isolating
her in their home; 6
■ ■ ■ A group of men in western New York were convicted after
harboring undocumented Mexican immigrants who were
made to work in restaurants through the use of force and
threats of legal action; 7
■ ■ ■ A Pennsylvania woman was convicted after bringing two
women to the U.S. from Vietnam and forcing them to enter
sham marriages, clean the woman’s home, and work without
pay in a nail salon. Often this occurred for eleven hours a day,
seven days a week. 8
In this context, it is hardly surprising that legislators, both at
the state and federal levels, have acted to combat human trafficking. Below, we examine recently enacted laws, the resulting new
compliance requirements, and the existing compliance mechanisms companies may leverage to satisfy these new requirements .
Legislative Reactions to Human Trafficking
State Action
According to the human trafficking watchdog, Polaris Project,
almost all of the 50 states and the District of Columbia have
statutes criminalizing human trafficking. 9 While these state laws
broadly prohibit any form of human trafficking, they do not
place an affirmative duty on companies to implement controls to
prevent human trafficking. However, in 2010, California passed
a law that requires businesses to disclose their implementation
of anti-human trafficking compliance controls.
Per the California Transparency in Supply Chains Act of 2010
(Cal. Civil Code § 1714.43, the “California Act”), which took effect
in 2012, all retailers and manufacturers doing business in the state
with annual worldwide gross receipts exceeding $100 million must
publicly disclose (on their websites or upon request), “its efforts
to eradicate slavery and human trafficking from its direct supply
chain for tangible goods offered for sale.” 10 The disclosure must
reveal steps the company has taken to prevent human trafficking
in its supply chains. Injunctive relief is the only remedy specified
for failing to disclose this information; however, other California
laws severely punish those engaged in human trafficking, either
directly or indirectly.
Federal Action
The Trafficking Victims Protection Act of 2000 (TVPA), along
with its subsequent amendments and reauthorizations, prohibits
U.S. government contractors, subcontractors, and their employees
from engaging in “severe” forms of trafficking. 11 In addition, Congress has passed regulations designed to provide the TVPA with
regulatory teeth. Like the California Act, these regulations, in one
form or another, impose a duty on U.S. government contractors
to implement controls to prevent and detect human trafficking.
The most significant of these regulations are the September
2012 Executive Order, entitled “Strengthening Protections Against
Trafficking in Persons in Federal Contracts”; the Ending Trafficking in Government Contracting (ETGC) provisions of the
Fiscal Year 2013 National Defense Authorization Act; and the
ETGC provisions (comment period ended December 20, 2013).
Each regulation contains distinct attributes, but all require U.S.
government contractors to implement compliance plans that
include controls to monitor and detect human trafficking. Each
focuses on well known indicia or “red flags” of trafficked labor,
such as unfair recruitment practices, wages, and living conditions.
The basic elements of these proposed compliance plans will
be familiar to anti-money laundering (AML) and anti-bribery
and corruption (ABC) compliance practitioners as resembling
the traditional “four-pillar” compliance program, fundamental
to the AML and ABC worlds. The basic elements of the proposed
FAR Rule compliance plan require relevant contractors to:
1. Create anti-human trafficking policies and procedures to
detect, deter, and report human trafficking-related activity;
2. Develop training programs;
3. Provide for responsible internal program oversight; and
4. Allow for third-party testing and review.
What Companies Need to Think About
The new regulations will require many companies to think long
and hard about anti-human trafficking compliance. These regulations, like the anti-money laundering and anti-bribery and
corruption laws before them, were born of the best intent––to
eradicate massive global problems. Despite astronomical corporate
compliance spending, few would argue that money laundering
and corruption are less serious problems today than they were ten
years ago. 12 By contrast, we hope ten years from now these new
regulations will be credited with a marked and material decrease
in human trafficking activity.
Just as in the AML and ABC compliance spaces, implementing
human trafficking-related controls such as risk assessments, training, testing, and attendant policies and procedures will be standard
requirements from an operational perspective. Likewise, the risk
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