Most banks have no interest in facilitating a risky weapons sale or contributing to instability in the global landscape. But most are either unaware of the issue or do not know how to address it.
Preventing the proliferation of military technology among nations of concern depends in part on restricting access to financial markets. The U.S. Department of Energy’s (DOE) Argonne National Laboratory is providing financial institutions with training to identify and avoid relationships with sanctioned or otherwise high-risk dealers of advanced conventional weapons.
The goal is to prevent countries from evading international sanctions and selling weapons — or materials and components that can be used in weapons — to other countries. The global financial sector already has robust programs in place to prevent money laundering and terrorist activity.
“But private industry is not as aware of risks related to weapons financing at the national level — it’s not standard practice yet,” said Tobi Du, nonproliferation policy specialist at Argonne. “That’s where we come in.”
Argonne has held several in-person and virtual events for financial sector professionals to help them counter the illicit financing of advanced conventional weapons and weapons of mass destruction programs. Advanced conventional weapons include, for example, air defense systems, heavy military equipment, sensors and advanced munitions.
“For decades, Argonne has led a broad range of nonproliferation analytical work and engagement, including training events on trade analysis techniques and export controls,” said Claudio Gariazzo, program manager at Argonne. “We’re leveraging our expertise to help the financial sector in partner countries build their own capacity to prevent the illegal spread of weapons technologies.”
At a July workshop in South Africa, for example, Argonne experts gave participants hands-on practice in using open-source research tools to investigate transactions and conduct customer screening. The workshop trained financial compliance professionals on the concepts of Know Your Customer and enhanced Customer Due Diligence, two key principles in identifying and avoiding problematic transactions.
Through case study exercises, the workshop attendees analyzed tactics used by proliferation networks. They learned how to use databases, mapping and translation tools, and archived websites to gain information and look for red flags in customer screening. They also discussed the current sanctions landscape, including regional perspectives.
“Argonne is helping to equip organizations with the skills to conduct this essential customer screening,” Du said. “Beyond the financial sector, the techniques we are sharing can be widely applicable in other industries as well.”
The work is funded by the U.S. State Department’s Bureau of International Security and Nonproliferation, Office of Cooperative Threat Reduction.
Argonne National Laboratory seeks solutions to pressing national problems in science and technology. The nation’s first national laboratory, Argonne conducts leading-edge basic and applied scientific research in virtually every scientific discipline. Argonne researchers work closely with researchers from hundreds of companies, universities, and federal, state and municipal agencies to help them solve their specific problems, advance America’s scientific leadership and prepare the nation for a better future. With employees from more than 60 nations, Argonne is managed by UChicago Argonne, LLC for the U.S. Department of Energy’s Office of Science.
The U.S. Department of Energy’s Office of Science is the single largest supporter of basic research in the physical sciences in the United States and is working to address some of the most pressing challenges of our time. For more information, visit https://energy.gov/science.