skip to navigation
skip to content

Financial Outsourcing Solutions

Corporate People

FOS Blog

08 Apr
2021

DOMESTIC TERRORISM – THE NEW THREAT

DOMESTIC TERRORISM – THE NEW THREAT

Once when one thought of “terrorism,” it was foreign terrorism that came to mind.  And what would a community bank have to do with that?  But terrorism has moved closer to home. There has been a shift in focus from foreign terrorist groups to “Homegrown Violent Extremists” (HVEs) and “Domestic Violent Extremists” (DVEs).  HVEs are individuals who have been inspired by other organizations, but are lone actors.   DVEs are those who have actually identified with an ideological, sociopolitical, or personal grievance group and may act in alliance with them.

In a statement to the House Homeland Security Committee in September 2020, former FBI Director Christopher Wray noted that the FBI requires that all domestic terrorism investigations be predicated based on activity intended to further a political or social goal, wholly or in part involving force, coercion, or violence, in violation of federal law.  So, how does that happen?  A person is first “inspired” by the beliefs of an organization or how closely that group aligns with their personal beliefs.  They then become radicalized, even enabled by that group to promote those beliefs – an activist.  As that relationship grows, the person is “directed” or funded to perform certain tasks in their allegiance to the group, leading them to become an extremist or even a terrorist.  This progression is amplified through social media, Internet, Dark Web, legalization of cryptocurrency, social movements, and anti-government sentiments.

So, what does all this have to do with community banking?

All domestic terrorist organizations need money – a place of deposit, movement of funds, and eventually using those funds.  Banks either facilitate that movement or they act as intermediary detectives and identify suspicious activity. That movement of funds is directly related to “money laundering.”

Terrorist Organization Money Laundering
Raising Funds (legitimately or illegally)  
  Placement into the Financial System

(Fiat or Virtual Currency)

Moving Funds (Wire Transfers, ACH, International Transmittals)  
  Layering – Distributing and Regrouping Funds
Storing (or hiding funds)  
  Integration Back into the Financial System
Spending or Disbursing Funds  

Because we are now more concerned with domestic financing, we need to be more perceptive in our monitoring.  Even the innocent person next door could have strange transactions that would call into question whether they’re part of domestic terrorism.  As Bankers, you know the signs.  This is no time to ignore them.  Make sure your BSA / AML teams are briefed on the shift in terrorism and your AML monitoring systems are calibrated to look for such activity.  Also, ensure your Senior Management team and Board of Directors are educated on this shift to further support your AML monitoring efforts.

For additional information contact the author at edehmey@fosaudit.com.

| |