Anti-Human Trafficking Statement

February 20, 2025

1. Introduction

Human trafficking is a violation of human rights and a significant global issue that affects millions of individuals, including men, women, and children, who are exploited for forced labour, sexual exploitation, and other forms of modern slavery. As a financial institution, Paxum Bank Limited recognizes the financial sector's critical role in detecting, preventing, and disrupting financial flows linked to human trafficking.

Paxum Bank Limited is committed to combatting human trafficking in all forms. Our policies, procedures, and compliance frameworks are designed to identify, prevent, and mitigate the risks associated with transactions that could facilitate or be linked to such exploitation. We hold ourselves and our business partners to the highest ethical and legal standards and take an uncompromising stance against financial crime, including human trafficking and forced labour.

This statement outlines our commitments, policies, preventive measures, and reporting mechanisms as part of our ongoing efforts to combat human trafficking and modern slavery.

2. Defining Human Trafficking

Human trafficking is a crime and a violation of fundamental human rights that involves the exploitation of individuals for labour or sexual purposes through force, fraud, or coercion. It is a global issue that affects both adults and children, with perpetrators profiting from the manipulation and abuse of vulnerable persons.

Human trafficking occurs when an individual or organization recruits, transports, transfers, harbours, or receives persons for the purpose of exploitation, using means that include deception, physical force, psychological control, abuse of power, threats, or financial coercion.

Paxum Bank Limited recognizes that financial institutions play a critical role in detecting and preventing financial flows linked to human trafficking. As part of our commitment to combatting this crime, we adopt a zero-tolerance approach to facilitating or enabling any form of human trafficking, directly or indirectly.

2.1 Primary Forms of Human Trafficking

Human trafficking generally falls into two primary categories:

  1. Forced Labor – The exploitation of individuals through involuntary work or services under threat, coercion, deception, or abuse of power.
  2. Sex Trafficking – The exploitation of individuals through coercion, deception, or force to engage in commercial sex, including virtual commercial sex.

Paxum Bank Limited acknowledges that all cases involving children in commercial sexual activities constitute human trafficking, regardless of whether force, fraud, or coercion was involved.

2.2 Key Elements of Human Trafficking

The internationally accepted definition of human trafficking consists of three core elements:

  1. Acts: The trafficker’s involvement in recruiting, transporting, transferring, harbouring, or receiving individuals for exploitation.
  2. Means: The methods used to control victims, including force, fraud, coercion, abuse of power, deception, debt bondage, or threats.
  3. Purpose: The exploitation of victims, including forced labour, sexual exploitation, domestic servitude, or any form of involuntary servitude.

All three elements must be present for a case to be classified as human trafficking under legal and regulatory frameworks, except in cases involving child sexual exploitation, where the means element is not required.

2.3 Forced Labor and Its Manifestations

  • 2.3.1 Definition of Forced Labor

    Forced labour, also known as labour trafficking, occurs when individuals are compelled to work against their will through force, fraud, or coercion. Traffickers exploit victims in a variety of industries, often depriving them of their freedom and financial independence.

    Forced labour can be present in legitimate businesses, supply chains, and illicit operations. It may occur in agriculture, construction, hospitality, manufacturing, mining, domestic work, fishing, and other sectors where oversight and regulation are weak.

  • 2.3.2 Indicators of Forced Labor

    Key indicators of forced labour include:

    • Debt bondage – Workers forced to work indefinitely to repay a fabricated or inflated debt.
    • Withholding of wages – Workers are denied fair compensation for their labour.
    • Confiscation of identification documents – Workers cannot leave employment due to lack of documentation.
    • Physical or psychological control – Workers are subjected to threats, intimidation, or physical abuse.

  • 2.3.3 Domestic Servitude

    One particularly hidden form of forced labour is domestic servitude, in which victims are exploited within private households. The nature of this crime makes it difficult to detect, as victims are often isolated, hidden from public view, and denied access to outside assistance.

  • 2.3.4 Forced Child Labor

    Forced child labour involves the coerced or involuntary exploitation of children in labour activities. While not all child labour is classified as trafficking, children subjected to forced labour, bonded labour, or hazardous working conditions under threat or deception are considered victims of trafficking.

2.4 Sex Trafficking and Sexual Exploitation

  • 2.4.1 Definition of Sex Trafficking

    Sex trafficking occurs when traffickers use force, fraud, or coercion to compel individuals into commercial sex acts for financial gain. This crime can take place in brothels, massage parlours, hotels, private residences, and online platforms and may involve both physical and psychological coercion.

    Sex trafficking is particularly difficult to detect, as traffickers often:

  • Use threats, violence, or drug dependency to maintain control over victims.

  • Exploit economic vulnerabilities, homelessness, or migration status.

  • Restrict movement and isolate victims from external assistance.

  • 2.4.2 Child Sex Trafficking

    Any commercial sexual exploitation of a child under the age of 18 is classified as human trafficking, regardless of whether force, fraud, or coercion was involved. Children are particularly vulnerable to trafficking through false job offers, social media manipulation, and familial exploitation.

  • 2.5.1 Consent is Irrelevant in Human Trafficking

    A victim’s initial consent to labour or commercial sex does not negate the existence of trafficking if force, fraud, or coercion is later introduced. Traffickers often manipulate victims after they have initially agreed to a job or arrangement, gradually increasing control and exploitation.

  • 2.5.2 Human Trafficking Does Not Require Movement

    Contrary to popular belief, human trafficking does not require cross-border transportation. Victims may be trafficked within their own country, region, or city, with exploitation occurring in familiar environments. The defining factor is exploitation, not transportation.

  • 2.5.3 Debt Bondage as a Method of Control

    Debt bondage is a key form of coercion used by traffickers, where victims are forced to work off a never-ending debt under exploitative conditions. Victims are often charged for housing, food, and travel expenses, creating an artificially inflated debt they can never escape.

  • 2.5.4 The Non-Punishment Principle

    Victims of human trafficking should not be criminalized for unlawful acts they were forced to commit under duress. Recognizing the trauma and coercion experienced by trafficking victims is essential in ensuring proper victim protection and support.

  • 2.5.5 State-Sponsored Human Traffickin

    In some cases, governments or state-affiliated actors engage in or facilitate human trafficking, including:

    • Forced labour in government-sponsored industries
    • Exploitation of vulnerable groups under legal pretexts
    • State-mandated labour policies that involve coercion

    Paxum Bank Limited maintains a strict prohibition against engaging with entities involved in state-sponsored trafficking and incorporates enhanced due diligence measures when assessing such risks.

3. Accountability in Supply Chains and Financial Services

Forced labour and human trafficking are well-documented in specific industries, particularly those with complex supply chains, informal labour arrangements, or opaque financial transactions. The financial sector is crucial in identifying and disrupting illicit financial flows linked to trafficking.

4. Paxum Bank’s Due Diligence Measures

Paxum Bank Limited is committed to preventing financial transactions linked to human trafficking through:

  • Enhanced screening of high-risk industries and counterparties.
  • Transaction monitoring to detect unusual payment patterns.
  • Collaboration with regulatory bodies, law enforcement and financial intelligence units (FIUs).

Paxum Bank Limited will terminate relationships with customers, vendors, or business partners found to be involved in human trafficking and will report such activities to the appropriate authorities.

5. Commitment to Global Standards and Compliance

Paxum Bank Limited upholds and aligns its policies with internationally recognized human rights and anti-financial crime frameworks, including but not limited to:

  • The Financial Action Task Force (FATF) Recommendations – set the global standard for anti-money laundering (AML) and counter-terrorism financing (CTF) measures, including combatting the illicit financial flows associated with human trafficking.
  • The United Nations Guiding Principles on Business and Human Rights (UNGPs) – provide a foundation for ethical corporate behaviour in combatting human rights abuses.
  • The Palermo Protocol (United Nations Convention against Transnational Organized Crime) – defines human trafficking and provides international guidance on identifying and combatting trafficking networks.
  • Local and International Anti-Trafficking and AML Laws – including jurisdictional regulations governing financial institutions to prevent, detect, and report transactions linked to human trafficking.

Our policies reflect these frameworks and are continuously reviewed and updated to adapt to evolving risks, regulatory changes, and best practices in combatting financial crime.

6. Risk-Based Approach to Human Trafficking Prevention

Paxum Bank Limited employs a risk-based approach (RBA) to identify, mitigate, and manage risks associated with financial transactions linked to human trafficking. Our Compliance and Risk teams are dedicated to ensuring that our Know Your Customer (KYC), Customer Due Diligence (CDD), and Enhanced Due Diligence (EDD) processes are designed to prevent financial abuse by illicit actors involved in human trafficking.

  • 6.1 Customer and Business Partner Due Diligence

    Our due diligence framework ensures that we do not knowingly provide financial services to individuals, entities, or organizations involved in human trafficking, forced labour, or other human rights abuses. Key due diligence measures include:

    • Thorough KYC and CDD screening at onboarding, using industry-leading compliance tools to verify customer legitimacy and assess potential risks.
    • Screening against global watchlists, including those maintained by OFAC, EU, UN, and other such bodies, to identify customers or entities associated with trafficking networks.
    • Adverse media checks to identify any potential links between customers, counterparties, and human trafficking activities.
    • Heightened scrutiny on high-risk industries, such as adult entertainment, hospitality, and labour-intensive supply chains, where vulnerabilities to human trafficking are higher.
    • Continuous monitoring of customer relationships, ensuring risk profiles are updated when new information emerges.

  • 6.2 Transaction Monitoring and Suspicious Activity Identification

We deploy advanced systems to detect potential financial transactions linked to human trafficking.

7. Employee Training and Awareness

We believe that awareness and education are fundamental to combatting human trafficking within the financial system. Paxum Bank Limited mandates annual anti-human trafficking and financial crime training for all employees, ensuring that our staff is equipped with the knowledge to:

  • Recognize financial red flags associated with human trafficking.
  • Identify patterns of coercion and exploitation through transactional behaviour.
  • Follow appropriate reporting and escalation procedures when suspicious activity is detected.
  • Understand regulatory obligations and legal responsibilities related to combatting human trafficking.

Additionally, we provide targeted training sessions for all departments to ensure specialized personnel are adequately trained to handle human trafficking-related concerns effectively.

8. Zero Tolerance Policy for Human Trafficking and Exploitation

Paxum Bank Limited maintains a zero-tolerance policy toward human trafficking, forced labour, and modern slavery. This applies not only to our direct financial services but also to our business relationships, vendors, and third-party partnerships. We actively assess and monitor third-party providers, including correspondent banks, payment processors, and other financial partners, to ensure they align with our ethical and compliance standards in combatting financial crime. Any entity found to be engaging in or facilitating human trafficking-related activities will face immediate** termination of services and reporting to the appropriate authorities**.

9. Reporting Mechanisms and Whistle-Blower Protections

Paxum Bank Limited encourages all employees, customers, vendors, and third parties to report concerns related to human trafficking and financial crime. We maintain a whistleblowing hotline for internal and external individuals to facilitate safe and confidential reporting.

9.1 How to Report a Concern

Complete the whistleblowing form here

All reports are treated with strict confidentiality, and we do not tolerate retaliation against individuals who report in good faith. Our Compliance Department will promptly review reports, taking appropriate action where necessary.