convergence

Lindholm and Realuyo
threats including transnational crime, terrorism, and the proliferation of weapons of mass
destruction. Such countermeasures have been successfully leveraged at the local, national,
and international levels to combat and degrade illicit networks around the globe; however,
these must be continually revamped to keep up with the resourcefulness of illicit actors as
they adapt to and circumvent countermeasures.
This chapter focuses on financing as an enabler of all things illicit and the financial front
of efforts to combat illicit networks. We will begin with an overview of the threat posed by
illicit finance and how illicit actors raise, move, and hide their money. Subsequently, national
and international strategies to combat threat finance through law enforcement and intelligence
operations, public designations, international cooperation, and capacity-building programs will
be examined. We will demonstrate how “following the money trail” enhances law enforcement
investigations and intelligence analyses to root out illicit actors and their financiers. Finally, we
will underscore the importance of recognizing threat finance as a key enabler of illicit networks
and the critical need to combat illicit finance.
The Nature of Threat Finance
Threat finance encompasses money laundering and terrorist financing by illicit networks and
endangers the integrity of financial systems around the world. Threat finance is employed by
rogue nations, terrorist facilitators, weapons of mass destruction (WMD) proliferators, money
launderers, drug kingpins, and others who endanger national security.
As the July 2011 Strategy to Combat Transnational Organized Crime (SCTOC) states,
the political reach and financial power of transnational organized crime groups allow them to
corrupt governments, undermine state stability and sovereignty, subvert and degrade democratic
and financial institutions, and threaten strategic markets and the global financial system.
The participation of organized criminals in licit markets undermines legitimate competition
and market reliability and transparency. Their laundering activities and use of violence, fraud,
and corruption create an unfair competitive advantage that drives out honest businesspeople
while distorting and possibly destabilizing strategic markets. This is particularly threatening
because of the entry of transnational organized crime (TOC)–linked businesses into sensitive
markets such as energy, telecommunications, and precious metals. 1 Furthermore, terrorists and
insurgents are increasingly turning to criminal networks or engaging in traditional criminal
activities to generate funding and acquire logistical support. This relationship is frequently
referred to as the growing “crime-terror nexus with groups like Hezbollah, Al Qaeda in the
Islamic Maghreb, and the FARC [Revolutionary Armed Forces of Colombia] in Colombia.”
Transnational organized crime also undermines the integrity of the interconnected trading,
transportation, and transactional systems that move people and commerce throughout the
global economy and across our borders. 2
Money Laundering. According to the U.S. Department of the Treasury, money laundering
generally refers to financial transactions by which criminals, including terrorist organizations,
disguise their identities and the proceeds, sources, and nature of their illicit activities.
Money laundering facilitates a broad range of serious underlying criminal offenses and
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