Study of the Typologies of the Financing of Proliferation (STFoP)

 

The proliferation of weapons of mass destruction (WMD) is a major threat to international peace and security. Detecting the financing of proliferation (FoP) can assist in combating WMD, but it is difficult and requires a better understanding of FoP typologies. Typologies can assist governments in implementing sanctions on WMD programs and disrupting proliferation networks. They can also help the private sector to identify information on FoP that should be passed to governments, and to remain compliant with sanctions.

The most recent comprehensive review of FoP typologies is dated 2008[1]. Since then, more information has become available, particularly relating to UN sanctions on Iran’s and North Korea’s proliferation programs. Some was published by the UN Sanctions Panel on Iran (see Annex).[2]

The TFoP Study is a year-long project to collate and analyse current information held by governments and the private sector on financing of proliferation and circumvention of financial sanctions on WMD programmes. Reports, consisting of case studies, risk indicators and typologies, will be published by King’s College London, for the benefit of practitioners in governments and the private sector.

These reports are intended to support governments to:

  • Identify FoP or circumvention of financial sanctions, and investigate the individuals and entities involved;
  • Disrupt proliferation networks (by preventing their financing) more broadly; and
  • Provide guidance to financial institutions regarding the financing of proliferation and implementation of financial sanctions.

The reports will in addition assist banks, financial institutions and other commercial organizations to:

  • Remain compliant with sanctions;
  • Identify transactions relating to FoP or circumvention of financial sanctions and take action as necessary, such as filing a suspicious activity report or otherwise informing the relevant authorities in their respective countries;

Much of the relevant data held by governments will be classified, and data held by banks, financial institutions or commercial organisations may be governed by banking secrecy regulations or other restrictions. The study is not seeking the details of sensitive data. It needs instead case studies, results of investigations, analyses, or other information that enables identification of patterns or trends of FoP.

The analysis of such material could lead to better understanding of:

  • patterns that may involve different sectors (eg, banks, money remitters),
  • channels (eg, SWIFT, local clearing systems), products or services (eg, investment products),
  • entities (types, sizes) and their location;
  • the use of front companies and persons;
  • past proliferation and sanctions circumvention practices and patterns (comparison with current methods and patterns could help identification and disruption of future networks);
  • the main current trends (for instance, letters of credit, open accounts, new payment methods);
  • differences between North Korean, Iranian and other networks;
  • similarities and differences between proliferation finance with respect to nuclear, chemical or biological WMD;
  • the extent to which hawala and other informal channels are employed.

All information collected by the Project will be held securely, consistent with King’s College London standards. Information in reports will be anonymised. Sources of information need not be identified.

The Study is funded by the Office of Export Control Cooperation of the International Bureau of International Security and Nonproliferation (EXBS), US Department of State.

For further information, please contact Dr Jonathan Brewer or Ian Stewart. Jonathan Brewer is a Visiting Professor at King’s College, London. He can be contacted on +1 917 900 7636 (mob), on +44 7815 848 418 (mob), and on Jonathan.Brewer@kcl.ac.uk.  Mr Ian Stewart is a Senior Researcher in the Department of War Studies at King’s College, London, and Head of Project Alpha on non-proliferation. He can be reached on +44 207 848 1342 (off) and at Ian.Stewart@kcl.ac.uk.

[1] Typologies Report on Proliferation Financing, 2008, Financial Action Task Force.

[2] Reports published in June 2014 and June 2015 and available on the UN website (www.un.org), S/2014/294 and S/2015/401.

[3] Listed on 23 December 2006 in Annex A of resolution1737 (2006) (IRe.006).

[4] Listed on 24 March 2007 in Annex I of resolution 1747 (2007) (IRe.007).