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Targeting Security Threats Using Financial Intelligence: The US Experience in Public–Private Information Sharing since 9/11

David Carlisle
Occasional Papers, 13 April 2016
Centre for Financial Crime and Security Studies, UK Counter-terrorism, United States, AML/CTF, Organised Crime, Terrorism, Intelligence, Terrorism
A consensus has emerged in both the public and private sectors that the frequency and quality of financial information sharing is inadequate. This has hampered global efforts to tackle money laundering and to counter terrorist financing. This paper illuminates an important and longstanding set of information-sharing tools from the US that are often cited as being worthy of replication: Sections 314 and 311 of the USA PATRIOT Act

Since the founding of the Financial Action Task Force (FATF) in 1989, global efforts on anti-money laundering and counter-terrorist financing have rested on the principle that co-operation between the public and private sectors is essential in generating financial intelligence. Recently, however, a consensus has emerged in both the public and private sectors that the frequency and quality of financial information sharing is inadequate. Observers argue that governments do not supply the private sector with sufficient detail about key threats, such as terrorism, for financial institutions to generate high-quality financial intelligence (FININT). On the other hand, private sector reporting of FININT through the traditional Suspicious Activity Reports (SARs) process is often slow and inefficient, hindering the ability of governments to act against criminals or terrorists.

Fortunately, one relatively longstanding model for public–private information sharing does exist. Shortly after the 9/11 attacks, in October 2001, President George W Bush signed into law the USA PATRIOT Act. One aim of the Act was to elevate the role of FININT in identifying and disrupting security threats. Two sections of the Act have particular relevance for promoting public–private information sharing to this end: Sections 314 and 311. Set alongside the traditional SARs regime, Sections 314 and 311 help to sustain a robust, if still maturing, public–private partnership aimed at protecting the US financial system against a broad array of illicit finance threats.

This paper offers an overview of the aims of US policy, an examination of the US experience in implementing Sections 314 and 311 of the PATRIOT Act, and a consideration of the advantages and disadvantages of the US approach. It also draws lessons from US experience and provides seven principles for policy-makers to consider when developing public–private information-sharing arrangements at the national or international level.

ABOUT THE AUTHOR

David Carlisle is an independent consultant specialising in devising strategies for combating financial crime. He has been based in London since 2012. From 2007 to 2011, David held various roles in the US Department of the Treasury’s Office of Terrorism and Financial Intelligence, where he worked on US policy related to anti-money laundering, countering terrorist financing and economic sanctions regimes. David holds a Master’s in International Relations from the Johns Hopkins School of Advanced International Studies. 

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