On 8 February 2024, CTED convened almost 20 top experts representing multiple key sectors willing to work together in trusted partnerships to counter the threat of terrorism financing in an effective, risk-based, responsible and well-informed manner. The event, held in a hybrid format, was attended by over 200 professionals from across the world, and shed light on a series of practical proposals on how to enhance public-private sectors cooperation on CFT, as well as what pitfalls to avoid. It also marked the publication of UN CTED’s latest Analytical Brief on ‘Establishing effective public-private partnerships on countering the financing of terrorism.
The Deputy Permanent Representative of the Kingdom of the Netherlands, host of the in-person component of the discussions, noted that the threat of terrorism financing has become increasingly sophisticated and complex, especially as it intertwined with transnational crime.
CTED Executive Director, Assistant-Secretary General Natalia Gherman, stressed in her opening remarks that proactive sharing of relevant information through PPPs can enable the early identification of terrorist threats. They may, she noted, also be mechanisms to address information exchange that requires immediate and urgent action. The appropriate use of the information they can generate can also contribute to the tracing of assets intended for terrorist purposes and mapping of terrorist-related transactions.
The event showcased examples of existing platforms for PPPs, including the Dutch Financial Expertise Centre (FEC) which is a partnership between various authorities with supervisory, monitoring, prosecution or investigative tasks within the financial sector, and its Terrorist Financing Taskforce (NL-TFTF). The New York City Police Department spoke on how it operates the NYPD Shield program – the Counterterrorism Bureau’s public-private partnership with leading security professionals and law enforcement agencies throughout the world.
Experts from research and academia reflected on legal and regulatory considerations that need to be taken into account to frame the PPPs and avoid legal uncertainty around the rules applicable to voluntary cooperation with the private sector and sharing of tactical information by the authorities. Lack of clear frameworks and safeguards may entail risks of de facto covert targeted surveillance or de-risking practice by obliged entities in the fear of AML/CFT sanctions. Clarity in the terms of engagement is also paramount to avoid unintended consequences for innocent customers and ensure human rights-compliant PPPs. They also provided thought-provoking and highly pragmatic reflections on the do’s and don’ts of establishing effective PPPs.
Speaking about engaging with sectors that are not necessarily regulated for AML/CFT, but are nonetheless important partners to detect terrorist financing activity, such as real estate, second-hand car dealers, and dealers in precious metals and stones, experts noted that some of these businesses operate informally, resulting in minimal interaction with government entities further than basic corporate registrations and enforcement of tax obligations. Reflecting on success stories, they called for encouraging unified collective voices within each industry, fostering collaboration, and establishing a resilient foundation for identifying and mitigating risks and threats.
Civil society and non-for-profit sector perspectives were raised in several interventions to highlight the need to be mindful of potentially adverse impacts on protected rights. They called for more efforts to ensure that partnerships with the private sector do not infringe upon financial inclusion and civic spaces, including with respect to a chilling effect on legitimate operations of non-profit organizations and on exclusively humanitarian activities.
Reflecting on matters related to privacy and data protection, experts underlined the importance of inclusive and cooperative dialogue on core data standards and technology that supports this. Consideration as to what data is used in risk decisions is important – as expressed, it is the foundation of the accuracy of the results. What is shared in a PPP, and how accurate this information may be, is key to detecting terrorist financing and financial crimes. When such sharing is done right, everyone wins: financial institutions target bad actors more quickly, save money, provide better information to PPPs, individual rights are protected, and authorities get better data to protect society from harms. When asked about Artificial Intelligence and anonymous data, experts agreed that AI will not replace human analysis, but it has the power to help sift through large volumes of data, find patterns, and target terrorist actors.
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Leading experts from the private sector dealing with blockchain intelligence, innovative and AI-driven compliance tools, crowdfunding platforms and digital assets trade were united and eager to offer their niche knowledge and leading technologies to assist authorities in detecting and suppressing terrorism financing, and to protect their sectors from TF abuse. When it comes to on-chain investigations, the goal is to participate in an all-encompassing approach that assists in finding terrorist actors and disrupting their networks. Blockchain analytics companies provide transaction monitoring tools that offer the ability for compliant digital asset businesses to be protected from bad actors, and therefore the identification, and validation of terrorist financing is critical for this to be successful. A specific case example involving cross-border cooperation and crypto transactions was also explained.
They also spoke about the need to ensure closer cooperation and coordination among different sectors as they often cohabit the same processes and each holds their pieces of the puzzle. For example, it is very common that the crowdfunding platform will have rich behaviour insights while the financial institution that powers their payments will have payment data. Understanding how to navigate this is crucial.
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International and regional organizations, including the UN Office on Counter-Terrorism (UNOCT), the UN Office on Drugs and Crime (UNODC) and the Organisation for Security and Cooperation in Europe (OSCE) also shared their perspectives on supporting Member States in establishing effective and human rights compliant PPPs in CFT. For its part, CTED will continue to engage with a wide range of stakeholders to foster a more sustainable, inclusive, and innovative approach to PPPs in the area of countering the financing of terrorism.
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Reference materials and cited publications can also be accessed:
- CTED’s work on CFT
- FATF work with private sector
- EU-funded PartFin project: Developing Public-Private Information Sharing to Strengthen the Fight Against Money Laundering and Terrorism Financing - Recommendations of the ISF-Police-funded Research Project “Public-Private Partnerships on Terrorism Financing”
- RUSI:
- Ethics and Good Governance for Public-Private Partnerships in the Framework of Countering Financial Crime: 10 Recommendations, Project CRAAFT
- Public-Private Partnerships to Counter Terrorist Financing — Project CRAAFT
- Social Media and Terrorist Financing What are the Vulnerabilities and How Could Public and Private Sectors Collaborate Better?”, Global Research Network on Terrorism and Technology: Paper No. 10: https://static.rusi.org/20190802_grntt_paper_10.pdf
- Developing the Architecture of Criminal Justice, Regulation and Data Protection, Benjamin Vogel and Jean-Baptiste Maillart (eds)
- TRM Labs:
- Terrorist Financing: Six Crypto-Related Trends to Watch in 2023 - https://www.trmlabs.com/post/terrorist-financing-six-crypto-related-trends-to-watch-in-2023
- TRM Finds Mounting Evidence of Crypto Use by ISIS and its Supporters in Asia - https://www.trmlabs.com/post/trm-finds-mounting-evidence-of-crypto-use-by-isis-and-its-supporters-in-asia
- Fundraising Campaigns for ISIS Families: Analyzing the Use of Cryptocurrency - https://www.trmlabs.com/post/fundraising-campaigns-for-isis-families-analyzing-the-use-of-cryptocurrency
Featured experts
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Mr. Maarten Pijls, Senior National Advisor on CFT and Sanctions within the National Prosecution Service in The Netherlands |
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Dr. Benjamin Vogel, Senior Researcher, Max Planck Institute for the Study of Crime, Security and Law |
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Ms. Chania Lackey, Regional Programs Coordinator, Global Center on Cooperative Security |
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Mr. Loaai Alakwaa, Blockchain Intelligence Expert, TRM Labs |
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Mr. Mario Cosby, Threat Intelligence Manager, TRM Labs |
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Mr. Fulco van Deventer, Deputy Director, Human Security Collective |
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Dr. Michelle Frasher, Independent consultant, faculty to the EU Global AML/CFT Facility |
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Mr. Tom Keatinge, Director, Centre for Financial Crime and Security Studies, RUSI |
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Mr. Andrew Fierman, Head of Sanctions Strategy, Chainalysis
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Mr. Andrew Davies, Global Head of Regulatory Affairs, Comply Advantage |
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Mr. Iain Armstrong, Global Regulatory Affairs Practice Lead, Comply Advantage |
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Mr. Matthew Murray, Director of Financial Crimes & Regulatory Affairs, GoFundMe |
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Mr. Fejzo Numanaj, Deputy Head, Anti-Terrorism Issues, Organization for Security and Cooperation in Europe (OSCE) Secretariat |