The recent UN Security Resolution targeting foreign fighters travelling to Syria and Iraq had an opportunity to deploy one of the most powerful available intelligence tools, namely partnership with the banking system. Inexplicably, that opportunity was missed.
As the rhetoric rose in New York at last month’s UN General Assembly and the bombs fell in Syria and Iraq, the UN Security Council, urged on by President Obama, passed Resolution 2178 condemning violent extremism, underscoring the need to prevent travel and support for foreign fighters. The passing of the Resolution represented acknowledgment by the international community that foreign terrorist fighters represent an ‘acute and growing threat’. Furthermore, beyond the usual aims of ‘addressing underlying factors’, ‘preventing radicalisation’, and ‘countering violent extremism’, the UN Security Council called for the ‘inhibiting [of] foreign terrorist fighter travel [and] disrupting financial support.’
Putting aside the effectiveness of another Resolution that, to a great extent, simply reiterates and recalls the many UN Conventions and UN Security Council Resolutions that have preceded it, there appears to be one particularly glaring omission from the list of various parties called upon to act, namely the banking industry. A number of practical travel-related matters such as controlling the issue of identity papers and preventing counterfeiting, forgery or fraudulent use of travel documents were underlined, and traveller risk assessment and screening was recommended to Member States as part of the effort to inhibit the travel of foreign terrorist fighters. Yet despite the usual and oft-repeated calls to criminalise terrorist financing and bring to justice those who finance terrorist acts, nothing new was offered with regards to disrupting financial support.
Particularly striking in this regard was the call made upon airlines to join the effort to detect and disrupt designated individuals. Just as airlines hold valuable data about their passengers, so banks can reveal considerable intelligence with regards to the whereabouts, activities, and intentions of their account- and cardholders. Why was this valuable resource apparently overlooked by the UN Security Council when the application of Financial Intelligence (FININT) has a proven ability to contribute considerably to national and international security?
Steered by the Financial Action Task Force, the global regulatory environment under which banks operate requires them to conduct extensive due diligence on clients and transactions, reporting any suspicions to their national Financial Intelligence Unit for further investigation. The systems and data analysis capabilities of banks are increasingly powerful as they aim to protect themselves and their clients against an ever-expanding array of financial crime. Consider the way in which a credit card issuer will call to enquire whether the recent user of your card in an unusual location was indeed you. Or the uncanny ability that large retailers have of predicting what you might want to purchase next. All this is achieved via the monitoring of financial activity based on the extensive personal and business-wide transaction experience that banks and other financial service providers have developed.
What is so often lacking from this powerful data analysis capability is externally provided intelligence, information that could help banks focus their systems to assist with the disrupting of financial support for foreign terrorist fighters. What sort of financial activity is consistent with such individuals? Where might these people leave financial footprints? This information is often known to the security authorities and, if supplied to banks in an appropriate manner could combine powerfully with their data and systems to illuminate foreign terrorist fighter activity.
Finance as a weapon
It would be wrong to suggest that banks and other financial service providers offer a complete solution, and thorny issues such as data protection and privacy need to be considered. But, as US Secretary of Defense Chuck Hagel has noted, Islamic State is as well funded as any such group we have ever seen and has amassed a vast store of financing. Depleting its resources of personnel and finance requires a breadth of solutions. Whilst the air campaign is targeting Islamic State’s valuable revenue-generating oil refineries, smart use of FININT could significantly enhance the ability to identify the foreign fighters travelling from across the globe. Just as airlines have a role to play so do banks.
The financial sector has been intimately involved in the fight against terrorism since George W Bush fired his first shot in the Rose Garden on 23 September 2001 announcing Executive Order 13224 launching a strike on the financial foundations of the global terror network aimed at starving terrorists of funding. To ignore a sector that has, for over a decade, invested billions of dollars and thousands of new staff in complying with the mountain of threat finance-related regulations that have been unleashed by global authorities seems at best a curious oversight and at worst an international security weakness.
Centre for Financial Crime and Security Studies