NEW YORK – July 13, 2020
As the number of hate groups in the US and Europe rose to its highest in 20 years, White supremacist groups have once again risen to mainstream politics and have garnered the attention of anti-money laundering (AML) and Counter Financing of Terrorism (CFT) agencies.
Since the September 11, 2001 attacks, agencies involved in Combating the Financing of Terrorism (CFT) have focused their efforts against Islamic extremist groups. But in recent years, a rise in White Supremacist Extremist (WSE)-related violence has triggered a new focus, with concerns mounting as to how these increasingly organized groups exploit financial institutions to raise funds.
In April 2020, the US designated a Russian far-right group-Russian Imperial Movement (RIM) as a foreign terrorist organization, blocking the group’s leaders and any assets from the United States. It marks the first time that a far-right group has been given the terrorist-group label by the US.
While RIM is based in Russia, it has fought alongside Russian mercenaries in Syria and Libya, carried out deadly attacks in Europe, and has provided advanced military training and indoctrination to Neo-Nazis from across the world, including the United States.
Though they were the first transnational white supremacist group to obtain such a designation usually saved for Jihadist groups, it is expected that more will follow after the White House added white nationalism as a threat to the government’s National Strategy for Counter-terrorism in 2018.
“These developments add another layer of complexity in the already dynamic and unpredictable sanctions environment, for institutions around the world that seek to comply with US sanctions,” said Daniel Nisman, Head of Financial Sector Solutions at Cobwebs Technologies.
“What’s more, recent political trends spotlighting hate crimes and activity have made it even more imperative for financial institutions to ensure that they disassociate themselves from any interaction with such groups; lest they risk severe reputational damage.”
What has been lacking, however, are solutions and methodologies that banks and other financial institutions can use to identify hate-financing threats, particularly as basic screening solutions are not calibrated to identify activity that could associate a client with a designated or non-designated hate group.
By infusing artificial intelligence to Open Source Intelligence (OSINT) intelligence gathering, Cobwebs’ new Weaver Financial Investigations platform is able to map the seemingly-legitimate business activities of designated hate groups and their following instantly, providing Bank compliance teams with a full local risk picture of potential risks among their client base. The technology also allows for enhanced screening according to dynamic criteria related to potentially risky activity among new and existing clients in a manner that enables bankers to apply a risk-based vetting approach to new customers and comply with CFT regulations.
In June 2020, the company held a major online training session for hundreds of bankers across Europe and the US, providing background into hate-financing and technology-based methodologies that can be used to keep hate financiers away and comply with the Bank Secrecy Act and the European Money Laundering Directives.
“In theory, no institution wants to be associated with violent hate groups,” explained Nisman, “but implementing effective checks according to a coherent organizational policy poses significant dilemmas on a political, data-protection, and general risk perspective. At Cobwebs, we’ve taken a major step forward in empowering financial institutions with law-enforcement grade solutions that identify their risk in a manner that enables quick action, and doesn’t hurt business.”