Financial Counterintelligence: How Changes to the U.S. Anti-Money Laundering Regime Can Assist U.S Counterintelligence Efforts

"The FBI has stated that at least 100 countries are attempting to purchase sensitive U.S. technologies, and 57 of those countries are actively “engaging in covert operations against U.S. corporations.”[1]  Apart from China, the most aggressive offenders noted by the FBI include France, Israel, Russia, Iran, Cuba, the Netherlands, Belgium, Germany, Japan, Canada, India, and several Scandinavian countries".

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[1] Hedieh Nasheri, Espionage and Industrial Spying 8 (Cambridge University Press 2005).

Mark B. Skerry†

Abstract: The United States faces an onslaught of offensive foreign intelligence operations, with tactics ranging from Soviet era-style spies clandestinely inserted into its communities to modern-day economic espionage conducted by businesses on behalf of foreign powers. This article proposes a novel weapon to combat this rising threat: leverage the existing U.S. Anti-Money Laundering (AML) regime to assist counterintelligence efforts. The AML laws and regulations already require financial institutions to investigate clients’ backgrounds, monitor financial activity, and report suspicious transactions to federal law enforcement.  If these financial institutions also were to report transactions that suggest foreign intelligence directly to U.S. counterintelligence elements, this country may be able to root out more easily those individuals and companies engaged in such operations.  To implement this program, existing reporting requirements already imposed on financial institutions must be modified, financial transaction typologies that suggest foreign intelligence must be developed, and institutional changes must be made within the federal government to accommodate the intake of this new type of counterintelligence.

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† Attorney, U.S. Department of Homeland Security, Office of the General Counsel; J.D. Case Western Reserve University; B.S. Cornell University.  Any views or opinions presented in this article are solely those of the author and do not necessarily represent those of the Department of Homeland Security.

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