Financing Threats to International Security
Espionage, terrorism, foreign influence, and more
When we talk about national security, we often talk about specific departments or agencies, their mandates, their activities (like espionage or counter-espionage), their intelligence collection capabilities like signals intelligence, human intelligence, or open source intelligence. We often try to tie this to threats to security — activities that threaten our economic prosperity, physical or cyber security, etc. But we rarely, if ever, talk about one thing that unites all these threats: money.
Regardless of the threat, it’s financed in some way. For example, if we look at threats as defined in Canada’s CSIS Act, we can see this link:
Espionage requires money: often this is provided through state budgets, perhaps through embassies, in electronic funds transfers or in cash, but we are increasingly seeing espionage activities undertaken and financed through cryptocurrencies. States like Russia use espionage to undermine democratic principles and processes, and fund those activities directly from state coffers or through elaborate webs of companies, individuals, and accounts.
Foreign influenced activities (aka foreign interference) are also financed in much the same way, but often using individuals as covers to provide payments to individuals or entities to help with things like the theft of intellectual property, to hide or obfuscate the true beneficial owner of a corporate acquisition (particularly in sensitive sectors like rare earth minerals,, aerospace, etc), or to simply pay individuals to undertake particular influence activities like intimidation of a diaspora community. Other examples include: Supporting the campaign of particular politicians, either through social media and influence campaigns, or in some cases through donations. These donations can be direct to the candidate, or might be received through third parties / proxies, in some cases in violation of election laws. States also pressure donors to give money to specific candidates.
They also use information operations and social media amplification to promote a particular policy objective.1 They will also invest money, pay for advertisements, or sponsor investigative journalism or interviews to promote their interests.
Terrorist activity of course also requires financing: terrorist groups, cells, and individuals need to raise money for their propaganda and attacks, and they move it domestically and internationally using our existing banking infrastructure as well as new technologies like cryptocurrencies.
There are also a number of other threats that have a financial component, like proliferation financing,2 sanctions evasion (those sanctions might be imposed on terrorists, human rights violators, war criminals, etc), and corruption & kleptocracy. All of these are threats to global security, and have a financial component that can be detected, and ideally, disrupted.
States and non-state actors seek to evade our detection mechanisms and finance these threats. We respond in a number of ways, including through investigation and prosecution, and also by implementing sanctions such as terrorist listings, state designations, and restrictions on import/export and investments.
In Canada, we actually have a fairly comprehensive framework to address threat financing. The problem is we lack measures of effectiveness, any real understanding of outcomes, prosecutions for violators, and meaningful investigative capabilities. In many other countries (particularly outside of the five eyes), the concept of threat financing is developing, at best.