Last week saw the airing of the final episode of the BBC's excellent but exhausting Honourable Woman. For those that have not been spending their Thursday nights (or iPlayer commuting time) absorbed by this drama, the key element of the plot (and this is not a spoiler alert) rests on the transfer of money from a concerned, wealthy, US-based American Israel Public Affairs Committee (AIPAC) supporter to free a kidnapped Israeli soldier in Gaza via a convoluted route that involves the eponymous woman's family business which conveniently sits astride the Israeli/Palestinian divide. Given the destination of the money is a designated terrorist organisation, this transfer is entirely against every global counter-terrorism law and norm. From this entirely plausible and topical premise ensues blood, torture, and death. Leading the way earlier in the year, whilst Carrie Mathison and Nicholas Brody were suffering breakdowns, hysterics, and torture in the latest season of the US television drama Homeland, it was the quiet work of CIA forensic financial analyst Fara Sherazi that uncovered the terrorist financing passing through a Caracas-based bank thus unlocking the CIA investigation.
From these two, highly popular and not unbelievable examples, it would appear that the topic of terrorist financing via money-laundering or kidnap-for-ransom has crossed over into mainstream entertainment and entered our living rooms. But is this crossover into our lives really so recent? And is it purely entertainment, or is there something more sinister for us to observe?
Since the late-1980s when the global standard-setter for anti-money laundering, the Financial Action Task Force (FATF) was set up, banks have been under slow, but ever-increasing pressure to ensure they do not facilitate the laundering of ill-gotten gains (particularly from the narcotics industry). This pressure increased considerably following 9/11 when counter-terrorist financing was added to FATF's mandate, and the implications of failing to disrupt illicit finance moved from arguably 'victimless' to very demonstrably victim-centric. 'Terrorism' is an emotive term and, just as our everyday lives are increasingly governed by decisions justified by and made for 'health and safety reasons', so too our financial lives have become inextricably linked with the responsibility delegated to banks to act as guardians of our financial borders against breach by 'terrorist' financiers.
Consider how often nowadays you have to provide identification when doing anything involving money. Sometimes this is to guard access to your personal information, but more often than not you are being subjected to a bank's need to involve you in its role as a frontline defender against 'terrorism'. In his most recent review of the use of The Terrorism Act 2000, Etc., David Anderson QC, the UK's Independent Reviewer of Terrorism Legislation, noted that the UK's anti-terrorism laws, 'some of the most extensive...in the western world,' had seen 'a degree of creep' in recent years and 'should be confined to their proper purpose.'
The extent to which counter-terrorism legislation has crept and is used to justify decision-making can clearly be seen in almost all walks of financial life. Try buying a house or signing a property rental agreement; try founding a company or acting as a parish trustee; try transferring money to your relative in one of the Financial Conduct Authority's over ninety 'high risk' jurisdictions; or try paying your friend who has a name similar to one of the thousands on the various monitoring lists maintained by governments, multilateral organisations, or private compilers such as World-Check that identify high risk entities months or years before they are listed by the governmental and multilateral organisations. If you've tried these, or used any of the other services offered by banks or so-called 'Designated Non-Financial Businesses or Professions' you will certainly have experienced the invasive and almost entirely unnecessary creep of counter-terror finance regulation. Some categories of individuals or operations, such as 'Politically Exposed Persons' or offshore 'tax-haven' companies certainly deserve greater scrutiny, but most of us, and most businesses, present no risk of exposure to money-laundering or terrorist financing at all.
Whilst it is frustrating for you to be burdened with the additional bureaucracy, imagine you are a bank, processing millions of transactions per day; transmitting funds around the world for accountholders, or the accountholders of other banks; providing loans to new businesses; and facilitating the import and export of goods. And then imagine that they have to provide a similar level of information demanded of you every time they make one of those millions of daily transactions. And to what end? Any prospective terrorist seeking to move money around is likely to have learned to avoid the obvious channels years ago and is much more likely to be moving money in their (or in this case someone else's) underwear than via a bank account.
As with other areas of focus in the field of counter-terrorism, the affects visited on all users of the financial system are overdue a re-evaluation. The goals in the aftermath of 9/11 were well-intentioned and certainly banking standards needed to improve in 2001, but as the counter-terror finance regime heads into its second decade, it appears regulations that perhaps made sense 13 years ago need to be reconsidered. Smart collaboration between intelligence/security agencies and banks, combined with the application of the technological and processing capabilities of 'big data' analytics unimaginable in 2001, are needed. Counter-terror finance is welcome in my living room, it makes for a great TV series, but I'd like to see much less of it in my life.Suggest a correction