Global Threat Assessment
by John Cusack
Despite the limitations presented in estimating criminal activity designed to be hidden, the results in the Global Threat Assessment present a bleak picture.
Criminal markets are generating more illicit funds than at any other time in our history, with ever more harmful effects inflicted against every Country, against billions of people and against our increasingly fragile environment.
We are witnessing the transformation of organised crime into very big business, leveraging networks to connect criminal actors, adopting poly criminality, embracing new cyber tools and opportunities afforded by the transformation to digital.
How big, which Countries, by what Methods and by which Gangs, is summarised in this Global Threat Assessment, using over 100 publicly available studies or reports from credible sources, together with personal observations and recommendations from the author.
Virtual Currency Based Money Laundering – Threat Assessment Coming Soon
The following is a short summary of the finances of the Islamic State (IS), as taken from a detailed Intelligence Briefing available to FCN Premium Professionals. The 30 Page Intelligence Briefing, details how IS is thought to have raised, moved and stores its reserves to support its terrorist activities and its future plans, a full Threat Assessment, what Financial Crime Fighters can do to help and potential Red Flags and or Key Risk Indicators. See Here For the full Intelligence Briefing.
The threat from the Islamic State (“IS”) remains high, and will continue into the near future, despite the losses on the battlefield both in terms of men and territory. In particular Western Europe, North America, South East Asia, and large parts of Africa are on the highest form of alert with attacks not only expected, but considered highly likely.
The following is a summary of the rise and fall of the Islamic State (IS), focussing on their finances, including the substantial reserves they still hold which makes them the richest terrorist group in the world. This is taken from a detailed Intelligence Briefing available for FCN Premium Professionals Membership.
The 30 Page Intelligence Briefing, details how IS is thought to raise, move and store its funds to support its terrorist activities, a current state threat assessment, available potential Red Flags and or Key Risk Indicators.
To read/download the Intelligence Briefing: See Here: FCN-IB-IS-9:19
The threat from IS remains high, and will continue into the near future, despite the losses on the battlefield both in terms of men and territory. In particular, outside of Iraq & Syria, Western Europe, North America, South East Asia, and large parts of Africa are still on the highest form of alert with attacks not only expected, but considered highly likely.
“Addressing the Remittance Challenge – by providing greater access to Banking services through limited purpose accounts.”
With the FSB amongst others concerned about access to banking services for Remittances, and with the recent announcement from Facebook and others that Libra may be an answer, Aamir Hanif assesses these issues and proposes a possible alternative in this article called “Addressing the Remittance Challenge – by providing greater access to Banking services through limited purpose accounts.”
In many emerging economies, remittance payments are not simply a financial service; they are a financial lifeline. For millions of families who rely on remittances for large portions of their day-to- day costs, they are a critical source of income. For local businesses, flows from the many millions of migrant workers underpin domestic consumption.
As promised Malcolm Wright provides an update to Financial Crime News on the Crypto Industry’s response to the challenge laid down by FATF to adopt wire transfer standards, in this follow on from his June piece “Crypto asks for more Effective Regulation,” and after the v20 Summit held last week.
On 28 and 29 June 2019, the crypto industry met in Osaka, Japan on the sidelines of the G20 to discuss how it would find an appropriate response to the newly released FATF Recommendations for AML governance of the crypto industry. The discussion focussed on how the industry could implement a solution to fulfil wire transfer requirements that exist already in the traditional banking sector. Helpfully, just one week earlier the FATF released Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers that provided clarification and direction for Virtual Asset Service Providers, or VASPs as well as countries and the traditional financial sector.
In February 2019, FATF issued its proposed recommendations for AML governance of the crypto industry. Under pressure from the international community, the FATF aimed to bring amendments to Recommendation 15 (New Technologies) into force at the June 2019 plenary. Within the proposals, one point was opened for consultation; colloquially known as 7(b) the proposal seeks to introduce wire transfer recommendations required of the traditional banking sector into the crypto industry. That is, originator and beneficiary information is collected, screened and transmitted between correspondent institutions with the objective to prevent criminals and terrorists having unfettered access to the financial system.
The crypto industry responded but not for the reason many thought; the response was not to fight against regulation or kick the can down the road for another day but to make sure that the regulation could be effective.
Virtual Currencies (VC) have come a long way in the 10 years since Bitcoin first emerged, born out of the financial crises and now a decade later they are considered part of the financial landscape. With more than 1,000 VC’s to choose from, tens of millions of customers use VC whether as a store of value, unit of account and/or as a payment medium. As with any currency, there are those minorities that use it to further illicit acts. Criminals have recognised that VC has unique properties that could potentially serve their interests in laundering illicit funds and evading law enforcement. Users of VC employ pseudonyms rather than names, funds can be transferred without intermediaries and across international borders as easily as sending email.
Whilst the term “organised crime” appears to have emerged in Chicago in 1919, the phenomenon of organised criminal activity far pre-dates this and its manifestations have developed considerably since that time. Examples include “thugs” or gangs of criminals, who terrorised 13th century India moving from town to town, looting and pillaging and “piracy” on the high seas, and highwaymen and banditry to the pre-industrial world what organised crime is to modern society. Many of today’s leading organised criminal gangs also have long histories, many tracing their origins back to feudal times, retaining links and codes from a bygone era whilst at the same time modernising and expanding their operations far beyond their traditional roots from their homelands across the world.
Whilst prohibition on alcohol in the US was presented as a victory for public morals and health, it was to prove a temporary measure being repealed in 1933.
The Bank announced on 9th April, 2019 resolutions with US and UK authorities regarding its historical sanctions and financial crime controls, which mostly related to violations and control deficiencies pre 2012 with none occurring after 2014. More details on these resolutions can be found on the Banks’ dedicated Fighting Financial Crime website: which also includes new pieces of work on “Antiquities Trafficking,” “Understanding digital identities in a world of cyber crime and compliance ” and “Iranian Virtual Currency Activity and risks to FI’s.”
SCB’s Fighting Financial Crime website is a good source of information to implement controls and processes to modernise the fight against financial crime in the area of cyber, data management, information sharing and more.