In-Depth: Rep. Scott Tipton (R-CO) introduced this bill to help financial institutions and law enforcement better recognize and prevent the illicit financing of transfers and exports of nuclear, chemical, biological, and other weapons:
“The ever-increasing number of threats posed by foreign adversaries and dangerous organizations has made it more critical than ever to close the gaps that currently allow bad actors to finance the transfer and export of dangerous weapons. By helping financial institutions and law enforcement better identify the signs of illegal weapons financing through this bill, these institutions will be able to maximize the effectiveness of their information and more easily coordinate strategies that disrupt, and ultimately prevent this dangerous crime.”
Elizabeth Rosenberg, a Senior Fellow at the Center for a New American Security, testified to the House Financial Services Terrorism and Illicit Finance Subcommittee that the current reports (Suspicious Activity Reports, SARs) filed with FinCEN currently don't give enough information for law enforcement's use:
“[O]n proliferation finance, [more information would be helpful] because it will signal to [government agencies and the regulators] that you care. It will give a demand signal to them and the financial institutions that [the regulators] oversee, that must submit the SARs, to know that this is a priority that they must look for and take action on."
This bill passed the House Financial Services Committee by a unanimous vote with the support of two cosponsors, including one Republican and one Democrat.
Of Note: FinCEN administers the BSA, which is the U.S.’ first and most comprehensive anti-money laundering statute. The BSA requires depository institutions and other industries vulnerable to money launder to take precautions against financial crime, including filing and reporting certain data about financial transactions that may be indicative of money laundering. The Bank Secrecy Act requires financial institutions to file Suspicious Activity Reports (SARs) with FinCEN when they encounter suspicious activity.
On an annual basis, over 15 million BSA reports are filed by over 25,000 U.S. financial institutions. These reports provide a wealth of potentially useful information to agencies whose missions are to detect and prevent money laundering, other financial crimes, and terrorism.
The prevention of financial transactions that fund illicit weapons transfers is an international concern, as nearly every country that seeks to obtain weapons of mass destruction (WMDs) can’t produce everything it needs domestically, and needs to access and exploit the global financial system to achieve its WMD aims. In the case of North Korea — which has been pursuing nuclear ambitions for the entirety of the 21st century — the use of front companies, joint ventures with foreign firms, and Chinese financial institutions have allowed the regime to successfully acquire the resources and technology to build weapons, such as the ballistic milles that it’s launched into the Sea of Japan to intimidate its neighbors.
Summary by Lorelei Yang(Photo Credit: iStockphoto.com / Dmytro Lastovych)