Anti-Terrorist FinancingKYCPolitically Exposed PersonsRemittancesSanctions

Effective Methods of Counter-Terrorist Financing

By January 24, 2015 December 4th, 2019 No Comments

In a 9,000 word PhD chapter length article in the New Yorker, Mattathias Schwartz raises some interesting points.

Current Hawala System of Remittances flowing through licensed entities is preferable to bags of cash being flown to Hargeisa
  • “In 2013, foreign remittances to Somalia reached $1.3 billion, which accounts for roughly half of the country’s G.D.P. Most of this money moves through hawalas, informal networks of Islamic money-transfer agents. Some U.S.hawalas are underground; some are affiliated with licensed banks. It’s difficult for authorities to track which hawala transfers buy food and other necessities in Somalia and which might be support for militant groups. But most agree that the current system is preferable to Somali émigrés’ making periodic trips with bundles of cash. “Somehow the money’s going to move,” Carol Beaumier, a former federal bank examiner, said in a recent interview with American Banker.
Current technological solutions are not effective, even when you have tons of data
  • By flooding the system with false positives, big-data approaches to counter terrorism might actually make it harder to identify real terrorists before they act. Two years before the Boston Marathon bombing, Tamerlan Tsarnaev, the older of the two brothers alleged to have committed the attack, was assessed by the city’s Joint Terrorism Task Force. They determined that he was not a threat. This was one of about a thousand assessments that the Boston J.T.T.F. conducted that year, a number that had nearly doubled in the previous two years, according to the Boston F.B.I. As of 2013, the Justice Department has trained nearly three hundred thousand law-enforcement officers in how to file “suspicious-activity reports.” In 2010, a central database held about three thousand of these reports; by 2012 it had grown to almost twenty-eight thousand. “The bigger haystack makes it harder to find the needle,” Sensenbrenner told me. Thomas Drake, a former N.S.A. executive and whistle-blower who has become one of the agency’s most vocal critics, told me, “If you target everything, there’s no target.” Drake favors what he calls “a traditional law-enforcement” approach to terrorism, gathering more intelligence on a smaller set of targets. Decisions about which targets matter, he said, should be driven by human expertise, not by a database.
But then neither are human approaches 
  • “It is much easier after the event to sort the relevant from the irrelevant signals. After the event, of course, a signal is always crystal clear; we can now see what disaster it was signaling since the disaster has occurred. But before the event it is obscure and pregnant with conflicting meanings.”Two years before the Boston Marathon bombing, Tamerlan Tsarnaev, the older of the two brothers alleged to have committed the attack, was assessed by the city’s Joint Terrorism Task Force. They determined that he was not a threat.”

The Palantir style approach of ingesting large datasets is interesting

  • “You might ask, ‘What’s the best way to figure out who the bad guys are?’ ” he said. “What would you start with? You’d say, ‘Well, I need to know who his network of friends are, because chances are many of them are bad, too.’ ” It’s possible that Moalin would have been caught without Section 215. His phone number was “a common link among pending F.B.I. investigations”.

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