CHALLENGES WITH IMPLEMENTING PROLIFERATION FINANCING CONTROLS: HOW EXPORT CONTROLS CAN HELP

On 30th May, the Carnegie Endowment for International Peace published an article which starts by saying that detecting proliferation-relevant illicit financing is even harder than detecting money laundering or terrorism financing.  Governments and financial institutions around the world have been dealing with money laundering and terrorism financing for decades.  They have developed typologies, “red flags,” and standard operating procedures to minimize exposure to money laundering or terrorism financing.  Compared to money laundering and terrorism financing, proliferation financing is a relatively recent and less understood challenge. It then gives examples of how even apparently benign products can have an illicit role –

  • semi-conductor material that is indispensable for laptops and transistors can be used in military equipment;
  • production of instant coffee, as well as of dry ice-cream for astronauts, relies on freeze-drying technology that can be used in bio-warfare research; and
  • components for nuclear power reactors that generate electricity rely on dual-use components and technology that can be used in a nuclear weapons programme.

The article explains why financial institutions struggle with implementing proliferation financing controls.  It also says that looking at proliferation financing challenges as related to export control efforts can significantly improve the overall national capacity of a given country to minimise proliferation financing risks.

https://carnegieendowment.org/2018/05/30/challenges-with-implementing-proliferation-financing-controls-how-export-controls-can-help-pub-76476

 

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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