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EU Fight against money laundering and terrorist financing

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The European Commission is today adopting a Communication and four reports that will support European and national authorities in better addressing money laundering and terrorist financing risks. The Juncker Commission put strong EU rules in place with thefourth and the fifth Anti-Money laundering directives and reinforced the supervisory role of the European Banking Authority. The reports stress the need for their full implementation while underlining that a number of structural shortcomings in the implementation of the Union’s anti-money laundering and counter terrorist financing rules still need to be addressed. Today’s package will serve as a basis for future policy choices on how to further strengthen the EU anti-money laundering framework.

Frans Timmermans, First Vice-President said: “We must close off all opportunities for criminals and terrorists to abuse our financial system and threaten the security of Europeans. There are some very concrete improvements which can be made quickly at operational level. The Commission will continue to support Member States in this, whilst also reflecting on how to address the remaining structural challenges.”

Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: “A credible framework for preventing and fighting money laundering and terrorist financing is essential to maintain the integrity of the European financial system and reduce risks to financial stability. Yet, today’s analysis gives more proof that our strong AML rules have not been equally applied in all banks and all EU countries. So we have a structural problem in the Union’s capacity to prevent that the financial system is used for illegitimate purposes. This problem has to be addressed and solved sooner rather than later.”

Věra Jourová, Commissioner for Justice, Consumers and Gender Equality said: “We have stringent anti-money laundering rules at EU level, but we need all Member States to implement these rules on the ground. We don’t want to see any weak link point in the EU that criminals could exploit. The recent scandals have shown that Member States should treat this as a matter of urgency.”

The Towards a better implementation of the EU’s anti-money laundering and countering the financing of terrorism framework Communication gives an overview of the four reports published today: the supranational risk assessment report provides an update of sectorial risks associated with money laundering and terrorist financing. The assessment of recent high-profile money laundering cases in the financial sector, the Financial Intelligence Units and the interconnection of central bank account registries’ reports analyse the shortcomings in current anti-money laundering supervision and cooperation, and identifies ways to address them.

Assessment of money laundering risks across the internal market

The supranational risk assessment report is a tool to help Member States identify and address money laundering and terrorist financing risks. It is adopted every two years by the Commission since 2017.

The report shows that most recommendations of the first supranational risk assessment have been implemented by the various actors. However, some horizontal vulnerabilities remain, particularly with regard to anonymous products, the identification of beneficial owners and new unregulated products such as virtual assets. Some of these will be addressed by the upcoming transposition of the fifth Anti-Money Laundering Directive. The report also recalls that Member States still have to fully transpose the fourth Anti-money laundering directive. The Commission calls upon Member States to implement the directive fully and follow the recommendations of this report. This would improve cooperation between supervisors, raise awareness among obliged entities and provide further guidance on beneficial ownership identification.

Assessment and lessons from recent money laundering cases

Following a number of exchanges with the European Parliament and a request from the Council in December 2018, the European Commission has analysed ten recent publicly known cases of money laundering in EU banks to provide an analysis of some of the current shortcomings and outline a possible way forward.

While not being exhaustive, the report shows that:

Banks, in a number of the cases analysed, did not respect effectively or sometimes did not comply at all with anti-money laundering requirements. They lacked the right internal mechanisms to prevent money laundering and did not align their anti-money laundering/counter terrorism financing policies when they had risky business models. The findings also highlighted a lack of coordination between such policies, either at the level of individual entities or at group level.

National authorities responded with significant differences in terms of the timeliness and effectiveness of their supervisory actions. There were major divergences in terms of prioritisation, resources, expertise and available tools. More particularly with respect to the supervision of a banking group, the supervisors had a tendency to rely excessively on the anti-money laundering framework of host Member States and this impinged on the effectiveness of supervisory actions in cross-border cases at EU level. In addition, the division of responsibilities led to ineffective cooperation between anti-money laundering authorities, prudential authorities, Financial Intelligence Units and law enforcement authorities.

These deficiencies point to outstanding structural issues in the implementation of EU rules, which have been addressed only in part. The regulatory and supervisory fragmentation, coupled with the diversity of tasks, powers and tools available to public authorities, create weaknesses in the implementation of EU rules. Shortcomings in anti-money laundering policies and supervision are more prominent in cross-border situations, both within the EU but also in relation to non-EU countries. While significant actions have been taken by banks and supervisors, more remains to be done. There is, for instance, a need for further harmonisation across Member States and strengthened supervision.

The need for reinforced cooperation between Financial Intelligence Units (FIU)

Financial Intelligence Units play a key role in identifying money laundering risks in each country. The EU FIU’s Platform, which is an expert group of the Commission, has greatly improved the cooperation over the last years, but the Commission has identified remaining issues:

Access by FIUs to information: due to their different status, powers, and organisation, some FIUs are not able to access and share relevant information (financial, administrative and law enforcement).

Information sharing between FIUs remains insufficient and is often too slow.

IT tools: FIUs also sometimes lack the proper IT tools to efficiently import and export information to/from the FIU.net.

Limited scope of the EU FIUs’ Platform, which cannotproduce legally-binding templates, guidelines and standards.

The report suggests some concrete changes, such as a new support mechanism, that would further improve the cooperation between Financial Intelligence Units (FIU) across the EU.

Interconnection of central bank account registries

The report on the interconnection of central bank account registries sets out a number of elements to be considered for a possible interconnection of bank account registries and data retrieval systems. The Commission suggests that such a system could possibly be a decentralised system with a common platform at EU level. To achieve the interconnection, legislative action would be required, following consultation with Member States’ governments, Financial Intelligence Units, law enforcement authorities and Asset Recovery Offices.

Next steps

Today’s reports will inform the future debate on further action in this area, including with regard to the obligations of financial institutions and the powers and tools necessary for effective supervision. The current degree of integration of the banking market will also require further work on the cross-border aspects of the anti-money laundering/terrorist financing framework. The Commission will continue to monitor closely the implementation of EU anti-money laundering rules by the Member States.

Background

Under the Juncker Commission, the EU has strengthened the anti-money laundering/ counter terrorist financing framework by adopting the fourth Anti-Money Laundering Directive that had to be transposed by Member States by June 2017. The Commission is assessing the transposition of the fourth Anti-Money Laundering Directive, while also working to verify that the rules are correctly implemented by Member States. The Commission has launched infringement procedures against a majority of Member States as it assessed that the communications received from the Member States did not represent a complete transposition of this Directive.

The fifth Anti-Money Laundering Directive will improve the powers of Financial Intelligence Units, increase the transparency around beneficial ownership information, as well as regulate virtual currencies and pre-paid cards to better prevent terrorist financing. Member States are due to transpose the Directive into national law by January 2020.

Following the uncovering of several money laundering cases in 2018, the Commission set up in May 2018 a joint working group together with the European Supervisory Authorities and the European Central Bank. On the basis of the working group’s recommendations, the Commission issued in September 2018 a Communication on strengthening the AML and prudential frameworks and new rules to strengthen the role of the European Banking Authority. This led to the reinforcement of the anti-money laundering and terrorist financing dimension in prudential banking legislation through the adoption of the fifth Capital Requirements Directive in December 2018.

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Hybrid Warfare: Threats to Pakistani Security

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‘Victory smiles upon those who anticipate the changes in the character of war’-Giulio Douhet

Hybrid threats are becoming a norm in Pakistan and if we want to move forward in this age of technological advancements, cybercrimes, and the use of social media, we must have a wholesome response mechanism.

Hybrid warfare is a military strategy that employs not only conventional forms of warfare but irregular with it as well. It involves propaganda, cyber-attacks, state-sponsored terrorism, electoral intervention, and many more means of multi-dimensional approaches towards war which are used by militarized non-state actors. The term ‘Hybrid’ came into use around 2005-2006 due to the Israel-Hezbollah war (“Lessons from Lebanon: Hezbollah and Hybrid Wars – Foreign Policy Research Institute” 2016) and became a hot-topic in 2014 after the annexation of Crimea. Using non-confrontational means can lead to internal struggles and crumbling of the target. What direct force won’t get you can be easily achieved by infiltration and multi-faceted resources. It’s neither character of war nor its outcome that defines it as a hybrid war, but the changing tactics (“State and Non-State Hybrid Warfare” 2018). In a world where everyone, from wealthy states to those caught in throes of hunger, is armed to the teeth, there are ways to achieve socio-political objectives through the use of violent and non-violent non-state actors.

Pakistan – A Target

Pakistan has risen to incredible heights despite it being a relatively young nation and this is only proved further by the interest international players have in its internal workings. Several factors contribute to the important stature Pakistan holds in the international community such as the Pak-China alliance, its geostrategic location, military aptitude, Russian interests in the Indian Ocean, Deep Sea Gwadar Port (One Belt One Road Project), neighbor to Afghanistan (a country existing as a battleground for proxies), etc. All these reasons make sure to keep Pakistan on the radar.

Though it may be secure militarily, Pakistan is still vulnerable to hybrid threats due to internal dynamics, numerous conflicting interests of nations in state-affairs, and increasing non-state actors. South Asian nuclearization has all but guaranteed that a full-fledged war between Pakistan and India is unlikely therefore the latter uses hybrid warfare to weaken Pakistan from within.

Evolutionary Nature of War

There was truth to Heraclites’s words when he claimed that change is the only constant in our world. The social theory of evolutionary change tells us that individuals, communities, societies, and states are always in a state of motion, continuously evolving according to the era. War is born from man, it is only fair that if a man changes, so shall war. It has become more complex; the stakes have raised from territorial boundaries to the maintenance of world order and preservation of state sovereignty. Wars are no longer fought on the borders, skirmishes aside, the real destruction takes place within. Due to the paradigm shift after the Cold War (Ball 2018), there rose a need for legal, economical, socio-political, and informational means of warfare. It is used as a way to undermine other nation-states in pursuit of national power; the international system is not only a race but also a way to tear others down.

Threats to Pakistani Security

To secure Pakistan from all sides, we must first analyze the threats it faces from all sides. Conventional Warfare used to be seen as one dimensional and it only perceived assault to be done through the land, air, or sea channels. However, now it is fought in various intangible zones.

·         External

India

India is a budding regional hegemon due to its political and economic growth including hidden agendas. Pakistan is perceived to be a direct threat to India especially after the launch of the CPEC project, perceived to be undermining its hold over the region, which is why it is employing stratagems of hybrid warfare to internally weaken Pakistan. Till now India has used State-Sponsored terrorism, funded insurgencies, operated terror cells, and even sent fighter jets into Pakistani Airspace as an attempt to ruin its reputation in the international community.

Afghanistan

There has been growing instability in Afghanistan which has led to mass migrations across the porous border into Pakistan, with around 1.4 million registered Afghans (United Nations High Commissioner for Refugees 2018) and 1 million unregistered (“Amnesty International” 2019). India has its claws in Afghan matters as well and will use it to exploit Pakistan’s weaknesses even after US forces leave the arena. Afghan Government’s poor administrative capability especially after the return of DAESH (Tribune 2020) and Tehrik-e-Taliban Afghanistan are threats to Pakistan as well as regional peace and are a major cause of lawlessness in the country and has a spillover effect for its neighbors.

Iran

Ideologically speaking, Iran is a sectarian threat to Pakistan and its Port Chahbahar stands to lose active traffic once CPEC is fully functional which means it stands as an instigator of hybrid warfare and it would be a risk to overlook it based on past good relations.

USA

Even after the Cold War, strategic rivalry and animosity between the powers including Russia, America, and China still exist. The emergence of China as an economic superpower is perceived as a threat to the US due to which there is a major shift in its defensive posture towards the region.

The US has shown significant interest in Pakistan due to its geo-strategic location but not all interest has yielded positive results. They carried out a surgical strike for the capture and assassination of Osama-Bin-Laden. Such a breach of sovereignty and security is a hybrid threat.

·         Internal

Sectarian

There are several lobbies in Pakistan all vying for their own cause. The Iranian lobby has sectarian undercurrents. Sectarianism has always been one of the leading factors of the divide in the Muslim civilization and is the rising trend of terrorism.Such conflict itself is volatile and is deepening the rift between different sects(Shia-Sunni) of Pakistan, causing unrest.

Economic

Rising prices of commodities such as flour and sugar can lead to social unrest and discord. Such industries and their stocks are under the thumb of a select few, the elites. With the right bribes and conditions, even they would agree to sell out society.

Non-State Actors

Non-state actors are groups or organizations that have influence in the state but work independently and have their socio-political agendas (“Towards a Typology of Non-State Actors in ‘Hybrid Warfare’: Proxy, Auxiliary, Surrogate and Affiliated Forces” 2019). They work on political opportunities and mobilized grievances. Groups like BLA (Balochistan Liberation Army), TTP (Tehrik-e-Taliban Pakistan), and Lashkar-e-Taiba (LeT) are some of the major actors. Pakistan needs to focus on curbing Jihadist Terrorism as it is keeping it from leaving the grey list of FATF.

·         Technological

Information

It refers to the spread of miscommunication. Propaganda and circulation of false news through social media are a relatively common way to cause turmoil in a community. Once a rumor is circling, there is no way to erase it. India claims that Pakistan is spreading the false narrative of ‘Islam being in danger’ to justify its actions, although untrue, is something that the Indians fully believe now. That Pakistani Intelligentsia is made solely to create narratives under which to attack India. Such beliefs further antagonize the states against each other.

Indian Chronicles are a prime example of information warfare being waged against Pakistan.

Cyber

Channels such as Cyber-Jihad and Dark Web come under the purview of cyber warfare and are a threat to the fabric of society and its security in Pakistan.

Given the above discussed bleak prevailing internal security situation, Pakistan needs to formulate a short to mid and long-term response that curbs all external and internal parties alongside proxies from infiltrating and influencing the working of the state and affecting the masses.

For a full-spectrum approach, all domains should be covered such as diplomacy, defense, internal and external security, economic, informational, cyber, and media security.

There are steps to be followed through for active and effective quelling of hybrid threats. First, a strategy must be put for, then tactical action should be taken and lastly, the implementation process should be supervised and fully followed through.

The main focus of the state should be on deterrence towards, protection from, and prevention of hybrid threats to the state.

One must not forget that Hybrid war is a mix of both unconventional and conventional warfare, therefore a nation-wide response should include the intertwined operational capabilities of armed forces alongside political actors. Pakistan sees its security being threatened both by internal factors and external hostile/proxy elements. This is hampering state development. State-building and nation-building must go hand in hand if counter and deter such threats effectively.

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The Impact of Management in Information Security

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Authors: Sajad Abedi and Mahdi Mohammadi

Due to the increasing role of information security in the management of any society, public and private organizations and institutions are inevitably required to provide the necessary infrastructure to achieve this. In addition to material resources, management techniques also have a great impact on the optimal and successful implementation of information security management systems. The recording of management standards in the field of ICT information security can be designed in a planned way to change the security situation of organizations according to the needs of the organization and ensure security in terms of business continuity and to some extent at other levels (crisis management and soft war). Despite extensive research in this area, unfortunately for various reasons, including the level of security of the issue for governmental and non-governmental institutions or the direct relationship of the field with their interests, clear and useful information on how to implement and prioritize the implementation of a system over the years. The past has not happened until today.

The protection of the organization’s information resources is essential to ensure the successful continuation of business activities. The fact that information and information assets play a key role in the success of organizations has necessitated a new approach to protecting them. Until now, risk analysis and management has been used to identify the information security needs of the organization. After analyzing the risks, security controls were identified and implemented to bring the risks to an acceptable level. But it seems that risk analysis is not enough to identify the information security needs of the organization. Evidence of this claim is that risk analysis does not take into account legal requirements, regulations and other factors that are not considered as risk, but are mandatory for the organization.

Identifying, assessing and managing information security risks is one of the key steps in reducing cyber threats to organizations and also preventing the unfortunate consequences of security incidents that make organizations more prepared to face cyber risks. The risk assessment process, which is the first phase of a set of risk management activities, provides significant assistance to organizations in making the right decision to select security solutions. Risk assessment is actually done to answer the following questions: * If a particular hazard occurs in the organization, how much damage will it cause? * What is the probability of any risk occurring? * Controlling how much each risk costs. Is it affordable or not? The results of risk assessment can help in the correct orientation in choosing solutions (which is to eliminate the main threats) and can also be used in formulating and modifying the security policies of the organization. Risk management is a comprehensive process used to determine, identify, control, and minimize the effects and consequences of potential events. This process allows managers to strike the right balance between operating costs and financial costs, and to achieve relevant benefits by protecting business processes that support the organization’s goals. The risk management process can greatly reduce the number and severity of security incidents that occur in the organization. Risk management has 5 steps, which are: 1. Planning: At this stage, how to manage potential risks in the organization is determined and completed by developing a risk management plan. This plan defines the risk management team, defines the roles and responsibilities of individuals and the criteria for assessing identified risks. Documented. 2. Identification: At this stage, team members gather around each other, identify potential hazards, and record them in the organization’s risk list. Arranging group brainstorming sessions is a good way to identify hazards 3. Assessment: In this step, the assessment of identified risks is performed using the criteria defined in the risk management plan. Risks are assessed based on their probability of occurrence and possible consequences.

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The impact of the Covid-19 on State, Stability, and Globalization

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Many questions have been exposed in the evolution of Covid -19 in the World. This point is very important to see him and explain it because is the same with Peace and war. But his construction isn’t adoptable with the level of all societies.

Seriously, this change is the biological necessity with analytical of science, industrialization and medical, etc. the men are visual by Covid-19 in anything society who the state hasn’t some capacities for all patients in hospitalizes in the world. The war of masks has paralyzed many countries. This battle cemented the level of capacities of states about public health. 

  A lot of studies explain the return of the Nation-State when they compared it with globalization because it can control sovereignty, borders, war, and Peace, etc. The second, she diffused the Markets, bourses, and information, etc. This big mutation is very important to compare it under Covid-19 but this challenge is funded by this pandemic in China. This country will be emplaced the USA country in the future. 

  Many discussions and conflicts after Covid-19 had been remarked with these countries during the commercial war but the Coronavirus has had his direction to the Third War. Why the nature of This impact for this mutation? It seriously questions when the Coronavirus posed these challengers on all states but they haven’t a solution against this new epidemic ravaged millions of persons.    

International security is menaced when the nation-state hasn’t a solution for public health. This point is the same when the big states like the USA or China disputed this situation with them but without international law protected like conflicts who the power definition hasn’t another conception laid the Coronavuris and here impact under stability and security.

  Simultaneously, I consider the epidemic of Coronavirus like a new serious factor about International Relations if we integers it among challengers biological and environment to explain the level of states and their difficulties face the Globalization.

  The International System is in crisis when the dominant American doesn’t relation with many states like China or Russia during Coronavirus, but the cooperation international isn’t the same conception about International Cooperation because the world lives in this moment with the Risks of a pandemic. Negatively, this way is the same vision as in war why the cooperation among states doesn’t participate in the Globalization.

 Thus the limit of strategic vision during globalization encouraged the return of the nation-state because the Covid-19 is an exam of all states to take their responsibility forthe destiny of their societies. Nobody thinks this pandemic choc and his consequently on many sectors and activities.

  During Covid-19, the International Anarchic is concerted after but without stability in the International Relations.Does this stability do her as a concept or practice? The complexity in International Relations is necessary or evolution who the Covid-19 accelerate these processes but he has anything possibility of changing other themes like State, Security, Communication, Integration, Development, and Democracy, etc.

New Realism doesn’t take this point in changing of International Relations because the political level of states is influenced by Economic Crisis. This one is developing the Commercial War between Beijing and Washington. 

The Union European has been fragile during the Covid-19 especially since Italy and Serbia face the bavettes. This dangerous situation of Coronavirus explains the fragility of Union Europe. Globalization had been created by the European Union but this one hasn’t the power to save its identity and money existences during this crisis epidemic.

 In Balkan, The European Union doesn’t take a strategic position about the Civil War between Armenia and Azerbaijan. This left about 300 people dead on September 27, 2020.Atthis moment, the Peace isn’t funded in the surrounding territories face the central regions, especially during the Covid-19 and American election.

 This upheaval epidemic in the XXI Century doesn’t usually challenge if the public health is a dangerous situation in the big states who the politics modern have many experiences of developing hospitably, Research and Industrialization, etc. In Italy, for example, the person’s burn a flag of Union European and emplace it by the China Republic. We are from this ambiguous and weakened passage.

  This conceptualizing of statism in Europe and America during the Covid-19 can be developed the notion of public politics of governments in the World. This one is very important for Nation-state to develop it by theory politics. Because is characterized by the new power of states and not by Globalization.

International Relations are developing by this level of states when we take the Foreign policy of state who reflecting his image clearly or not participating in an international environment. 

The nature of Covid-19 isn’t compactable with institutes against it because the fundaments of there are basing on the War in the International Relations and Anarchy in the International System.

  Consequently, the Nation-State hasn’t many solutions to opposite it because this one is very fundamentally influenced by Globalization for three or fortune decades. But the question who can pose it is: Where is the World moving in the light of what it has passed and what is coming from it? The term Security is very important but it’s not globally when we take it in the other angles of Development, Dialogue, and Research, etc.

 The Nation-State is needed very well of Security or Dialogue with all factors in every society. The Security is consequently of the level of development and changing it when isn’t demined by State and society. The World is changing by his volunteer or by his Violence? 

Why the nature of this epidemic on a lot of actors of bureaucratic management on governments, but this only context is favorable to explosive at least conceptualization like nation-State, Security and Globalization and others. This situation isn’t the same in the past but is the product of their evolution. Maybe the solution isn’t definitive but approximately relative.

Finally, what’s the link between Sciences on practical policies? But all the concepts bring to this kind of crisis. The world is changing but without guarantee of all states and public politics and International relations. The shock is varied and multiple of all humanity in this history cycle during the XXI e centuries.

  This evolution isn’t positive because the states haven’t only strategic vision but the great means who the question of legitimacy posed a problem about democratic of peace. Simultaneously, this way is corrected by ideas, values, and sciences. If the states don’t occupy from representative popularity election, the result is minimally about institutes and policies.             

  This vision can’t global system that the management of administration, economic, and commercial needs many rationally position and efficacy about the treatment of society’s problems.

  In order of Covid-19, the World take another direction without seriously guarantee to participate by all states and organizations. In opposite to Covid-19, humanity observed a big difference between the past and present. This point is clarifying the nature of this crisis of Health, Communication, and Medicine.

  I wait as Researcher in International Relations, the third War Covid-19 between China and USA, but the commercial economic domineer their relations beyond this epidemic. This changing of the deal is very challenging for multiple operations but without solutions.  This mutation of deployment gravity center between states to societies is very dangerous in the World. The Died is a big challenger of humanity but the renovation doesn’t a common fundament of all structures by injection of money during the economic crisis.

   What’s the final solution? This question is very important to pose because History is removed by cycle but the volunteer and consciousness are a common culture. Nobody can answer this orientation about this occupation of humanity. In this perspective, the World is in crisis by their states? We can thinkabout it. But this crisis is multidisciplinary, horizontal, and vertical.

 International Relations have funded on war who the peace is their ideal of politics. This point is contradictory between states and societies. Their relation is based on Security, Stability, and Sovereignty. The Nation-State is seriously needed more treatment in his territory if he takes it as sovereignty like the principal of it. Globalization has been changing the direction if she opposite with Nation-State.

 This contradictory building of conceptualization posed very difficulties than practice because it’s very important for Researchers in International Relations. Many centers in the world talking about this challenge but this fragility structure is the level of this construction of institutes and their policies.

 The Covid-19 like natural danger posed a big problem on humanity who the man is veritably in front of his hearth in hospital: Philosophical point or limit of modernity? What’s the lied with themes’ if the remedy isn’t non-existent. From this question, we can attach a big good consideration for this limitation of several sectors and activities of each State face his population.   

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