Proliferation Finance – Financing the Bomb
Procurement of WMD is expensive, and it becomes even more expensive because of restrictions on goods and sanctions on people and entities. At the same time, proliferators are using the global financial system to pay for the components they need. Furthermore, proliferators have extensive knowledge of how financial flows travel to jurisdictions where there is less chance of being detected.
In the meantime, finance is used as a sanctions tool to apply an effect to a subject who might be outside of the sanctioning jurisdiction. For example, blocking a transfer, freezing assets, documenting transactions are part of the usual sanction tools based on finance. Although controls and regulations seem more restrictive as sanctions receive more attention, documented cases in fact look much more complex.
A definition of proliferation finance is certainly not unanimous. Some restrict it to the financial side of WMD procurement, while others see proliferation finance as coming only from the scope of UN sanctions. A more extensive definition would be to consider all sources of funding going to proliferating states. From an academic approach, there are possibilities for new research, whereas from a policy point of view, there is the challenge of preventing and disrupting proliferation.
With this in mind, Project Alpha has undertaken a series of activities including developing a comprehensive suite of proliferation finance training materials for governments and the private sector, undertaking a typologies project and proliferation finance paper to scope how proliferation finance differs from other types of financial controls, produced a list of dual-use goods keywords, and assessing sanctions compliance in the financial services sector.