Project Shadow

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Background to and rationale for the initiative

Project Shadow is a public-private partnership to identify and report money laundering associated with proceeds from child exploitation online.

It is aimed at improving the collective understanding of child sexual exploitation online and strengthening the detection of the facilitation and the laundering of funds related to this illicit activity.

This project has been implemented in Canada.

Timeline and organisations involved

With the support of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), Project Shadow was created by Scotiabank and co-led with the Canadian Centre for Child Protection (C3P).

Project Shadow officially launched on December 10, 2020, after FINTRAC published an Operational Alert, which assists applicable financial services businesses in better identifying and reporting to FINTRAC financial transactions related to the laundering of funds associated with child sexual exploitation online.

Outcomes to be achieved/ already achieved

  • With the reporting that it has received since the creation of Project Shadow, FINTRAC has produced more than 30 financial intelligence disclosures in relation to child sexual exploitation online for police and law enforcement partners to investigate.
  • Based on FINTRAC’s analysis, perpetrators and suspected perpetrators were nearly all males, mostly aged in their 40s and 50s, located in all Canadian provinces and territories, and employed in a wide range of occupations.
  • The top 10 jurisdictions receiving money transfers linked to online child sexual exploitation were: Philippines, Thailand, Colombia, the United States, Ghana, Ukraine, Dominican Republic, Romania, Jamaica and Russia.

Challenges and/or opportunities encountered in carrying out the work

  • Projects like this one and others are challenged by current Canadian legislation to share tactical information about suspected clients among regulated entities.
  • Opportunities to enhance the impact of public-private partnerships and strategic intelligence through greater information-sharing include:

– increased number and quality of Suspicious Transaction Reports (STRs)

– improved law enforcement outcomes

  • Through the ongoing work of Project Shadow, we can empower financial crime risk professionals to view child sexual abuse material through the lens on money laundering, in turn, enhancing financial investigations.

A Suspicious Transaction Reports (STR) is a report created by a financial institution based on reasonable grounds to suspect illicit financial activity.

Impact of the project

  • Disruption of buying & selling child sexual abuse material, its content creation and its storage
  • Significant increases in STRs and law enforcement disclosures