Overview

The UK MoD Joint Doctrine Note 2/20 ‘Threat Finance and the Economic Levers of Power’ (2020) uses the term ‘threat finance’ for the activities of terrorist groups, and transnational organised crime groups which has implications for a nation’s security. The challenge is characterised as determining how a threat actor generates, moves, uses and stores value, to provide insight into the threat actor’s capability and modus operandi, to predict their intentions. Financial Intelligence (FININT) is needed to supplement the military’s Defence Intelligence as threat actors require some form of finance to support their activity.

The module commences by reviewing the spectrum of actors presenting a threat to national security, before introducing the cycle of terrorist attack, and the terrorist resourcing model to determine the actors’ Intent, Capability, & Opportunity. Actors’ attempts at Identity Obfuscation are examined through the abuse of legitimate trade processes, sanctions evasion, and technological aspects of financial services. National risk assessments of proliferation networks, based on collecting salient and timely data, are recognised as mechanisms to detect ‘threat’ on many fronts.

Proliferation financing for terrorism purposes, specifically related to the development of Weapons of Mass Destruction, assesses “the risk of raising, moving, or making available funds, other assets or other economic resources to manufacture, acquire, possess, develop, export, trans-ship, broker, transport, transfer, stockpile or use nuclear, chemical or biological weapons and their means of delivery and related materials” (FATF). The integration of financial pathways and proliferation pathways is analysed, together with RUSI’s recommendation that jurisdictions consider their position along pathways (manufacturing, trading, providing support services), and the role that they play in facilitating threat actors to obscure their links across the network.

The intermediating role of Cryptoassets is demonstrated for potentially positive economic and social gains (firms to develop new business models, governments to build efficient/secure information systems, for financial inclusion of the ‘unbanked’) together with the negative use for perpetrating crime, often through anonymity and misuse of distributed ledger technology. Common ‘crypto’ characteristics are reviewed (decentralised, open, public, borderless, neutral, censorship resistant/immutable), together with reasons for their attractiveness to conduct transactions that are irreversible, without a financial intermediary, to transfer/receive funds instantaneously around the world.

Finally Open Intelligence Sources are evaluated as part of the intelligence toolkit to detect criminal attempts to utilise the component elements of proliferation networks and pathways. Planning and execution of Open Source searches of the Surface Web, Deep Web, and Darknet are examined, together with the potential use of Artificial Intelligence in such operations.

Assessment Strategy

Threshold C- to C+ (50-59%): Satisfactory performance. No major omissions or inaccuracies in the deployment of information/skills. Some grasp of theoretical/conceptual/practical elements. Integration of theory/practice/information present intermittently in pursuit of the assessed work's objectives. Knowledge of key areas/principles only. Weaknesses in understanding of some areas. Limited evidence of background study. Answer inadequately focused on task and with some irrelevant material and poor structure. Arguments presented but lack coherence. Minor factual/computational errors. Lacking original interpretation.

Good B- to B+ (60-69%): Good performance. Most of the relevant information accurately deployed. Good grasp of theoretical/conceptual/practical elements. Good integration of theory/practice/information in pursuit of the assessed work's objectives. Evidence of the use of creative and reflective skills. Understands most but not all concepts/issues. Evidence of background study. Focused answer with good structure. Arguments presented coherently. Mostly free of factual errors. Some limited original interpretation. Well known links between topics are described. Problems addressed by existing methods/approaches. Good presentation with accurate communication

Excellent standard: 70+ An outstanding performance, exceptionally able. The relevant information is accurately deployed. Excellent grasp of theoretical/conceptual/practice elements. Good integration of theory/practice/information in pursuit of the assessed work's objectives. Strong evidence of the use of creative and reflective skills.

Learning Outcomes

• Compare and contrast counter-threat elements in the international regulatory and legal environment

• Critically analyse the actors threatening a nation’s security, to appreciate their individual intent capability and opportunity

• Critically assess Cryptoassets and distributed ledger technologies as a means to facilitate money laundering and identity obfuscation

• Critically evaluate the dual roles of technology in National Security - creating/supporting criminal opportunities, and detecting and frustrating such activities

• Identify and assess the linkages between stages in the terrorist resourcing model and the elements of proliferation networks and pathways.

• Identify and assess the merits of different types of intelligence in collecting relevant and reliable information for purposes of threat detection and mitigation