Sadly, as AML veterans we have all struggled with how best to assist the government—and frankly society—in stopping the flow of money used to commit terrorist acts.
The financial sector has stepped up every time there has been an attack or series of actions (e.g. human trafficking) that have a connection to traditional banking or related institutions. Whether it is creating typologies or sharing information with peer institutions or the government, the AML community has actively sought direction from government investigators and policymakers when funding of any criminal or terrorist is in question.
With the advent of the subhuman terror group ISIS—Islamic State and Syria—we are all challenged again of what to do.
I will cover this topic in more depth when more information becomes available. But for now, we can only look at what the experts have discovered.
A report in The New York Times has identified revenue from oil as the main source of ISIS funding. Sales on the black market garner $1-$2 million a day to recruit members and pay those “fighters.” (Note: It is too complimentary to call those individuals “fighters”—they are thugs with no regard for human life)
It would appear that a logical response to the movement of this source is additional sanctions and, of course, much diplomatic activity that is certainly beyond my expertise.
What can AML community do now?
Immediately following 9/11 (13 years ago this past week), the financial sector quickly closed ranks with federal law enforcement, Treasury, and others, to determine where the monies had moved to commit those heinous acts. The cooperation was extensive, strong, and effective.
During such troubled times it made all of us proud to be in the AML community.
Even battling federal agencies worked together.
Much has happened since then. And the cooperative environment is somewhat strained because of many factors I have described in early blogs. However, when our people and our allies’ lives are threatened, if there is a financial nexus to address, AML professionals are ready to join the counter-terrorist response.
Do we have enough information on ISIS?
My good friend, and the smartest counter-terrorist analyst I know, Dennis Lormel, has already started adding ISIS related information to his very popular terrorist financing prevention training.
Lormel correctly points out that the other groups such as al-Qaeda and their affiliates have not gone away, so we need to continue to disrupt their ability to raise money and recruit.
For understanding ISIS and their use of kidnapping and rampant executions as a tool to intimidate (and, strangely, to successfully recruit from the U.S. and around the world), Lormel points to its composition of “unstable misfits” who are more radicalized than others and have access to incredible wealth. Add to that the ability of ISIS to utilize social media that seems to be at a level unmatched to other terror groups.
While there are currently no public examples of unique “red flags” for monitoring or detecting funds used by ISIS, the use of financial intelligence is a constant that Lormel and other experts continue to remind the AML professional to enhance and utilize.
We know about the use of oil revenue. But how the cash changes hands is less clear. One concern, voiced by national security experts such as Juan Zarate, is the lack of support by NATO ally Turkey to stop the smuggling of oil through their country.
However, Lormel has made a list of what financial institutions can watch out for:
• Internet protocol logins in areas of conflict (i.e. transactions in Syrian border areas).
• Periods of transaction dormancy—due to training camp activity or actual combat.
• ATM withdrawals in the areas of conflict.
• Wire transfers to the area.
• Charitable activity in areas of conflict.
• Uptick in student loans, which could be used to purchase airline tickets to fly overseas.
These are difficult times but we cannot lose sight of how effective AML is when there is active cooperation.
We need to keep learning and sharing information.
Society demands no less.
* “Déjà vu” was both the album title for Crosby, Stills, Nash and Young and a title from a David Crosby penned song on the same album. As the refrain says, “We have all been here before.”
- PPP: SBA Issues Guidance on Changes in Ownership and Full Forgiveness Eased for Smaller Loans
- First Citizens, CIT Plan Merger to Create $100bn Bank
- OCC Levies Third Major Fine This Month
- ABA Urges DoJ to Update Market Data to Help M&A Governance
- JP Morgan Chase Outperforms, Good Sign for the Banking Industry