As part of National Child Protection Week, AUSTRAC is reminding financial services providers of the critical role they play in detecting child sexual exploitation for financial gain.
AUSTRAC collects and analyses suspicious matter reports shared by financial service providers, like banks, remitters, digital currency exchanges and payment platforms, and these reports form the basis of financial intelligence used to detect transactions linked to for-profit child abuse.
AUSTRAC's financial intelligence supports law enforcement investigations, helping to protect children, the wider community and Australia's financial system from criminal abuse.
AUSTRAC CEO, Brendan Thomas, said AUSTRAC works tirelessly to stop these appalling crimes.
"We have a dedicated team that identify potential child exploitation transactions and we work with partners and taskforces to expose criminal activity and hold those responsible to account," Mr Thomas said.
"Through close collaboration with law enforcement and partner agencies like the Australian Centre to Counter Child Sexual Exploitation (ACCCE), and the private sector via Fintel Alliance, AUSTRAC identifies perpetrators and makes it more difficult to profit from child abuse."
Suspicious matter reports, international funds transfer instructions and crypto payments feed into this intelligence, leading to arrests in Australia and overseas."
"For example, in August a Shepparton man pled guilty and was convicted for two counts of importing child sexual abuse material."
"AUSTRAC had identified payments consistent with the purchase of child sexual exploitation material while the individual was overseas."
"Following our referral, the Australian Border Force (ABF) intercepted the offender at the border, where they found images and videos classified as AI-generated or anime child abuse material on his device.
"He was sentenced to a good behaviour bond and subject to registrable offender reporting obligations for eight years, which also prevents him from further overseas travel for a period of time."
Another growing child sexual abuse threat is 'sextortion'. This type of crime disproportionately affects under 18s and involves victims being coerced by online offenders into sending sexualised images, often with the offender pretending to be another young person.
The offender threatens to share the content with others unless their demands are met. These demands typically include large amounts of money, gift cards, online gaming credits, more images, and sexual favours.
Despite paying an offender, the victim may continue to be threatened or extorted for additional money.
Since June 2022, Operation Huntsman, a joint ACCCE and AUSTRAC initiative, has led to the closure of more than 3,000 Australian bank accounts linked to sextortion payments.
AUSTRAC's financial crime guide helps businesses spot the red flags for child sexual exploitation transactions and understand when to report.
"Financial services providers need to know what to look for so they can submit a suspicious matter report that enables us to act quickly and prevent harm," Mr Thomas said.
"For example certain patterns of behaviour, when combined, can point to suspicious activity.
"This might be a series of low value transactions under $500 that are categorised to appear innocuous such as 'uniforms' or 'medical bills', combined with purchases of spyware apps, virtual private networks, video capture software, or travel tickets to high-risk jurisdictions.
"Every report is an opportunity to stop a potential offender, stop the flow of dirty money and protect vulnerable children from abuse.
"No single agency can solve this alone but with the vigilance of the financial sector, together we can help protect children and safeguard our community."
