June 05, 2019

Proliferation Finance: Critical Issues and Priorities for Congress

By Chris Estep, and Clare Toner

Reducing weapons of mass destruction (WMD) proliferation has long been a key national security priority for the U.S. government. However, efforts to target the financing of WMD proliferation remain limited and underdeveloped. State actors and transnational terrorist networks alike can exploit legal vulnerabilities in the global financial framework for preventing proliferation, and the U.S. approach to this issue has easily fixable deficiencies. WMD proliferation networks employ sophisticated financial tactics to facilitate their malfeasance, and Congress has an important role to play in adopting measures that would strengthen America’s efforts to counter this threat.

In a new briefing, “Proliferation Finance: Critical Issues and Priorities for Congress,” authors Elizabeth Rosenberg, Neil Bhatiya, Claire Groden, and Ashley Feng discuss the steps that Congress should take to more effectively address the international challenges associated with proliferation finance. Drawing upon the findings of a landmark CNAS report, “Financial Networks of Mass Destruction,” this briefing describes the complicated nature of illicit finance networks used for the development of nuclear weapons and ballistic missile programs, especially by states like North Korea, and the variety of tools these actors use to financially support WMD proliferation. Due to the strength of the immense American economy and the role of the U.S. dollar as the global currency of choice, the U.S. Congress is strategically positioned to address these illicit financial networks.

To this end, the authors propose several concrete recommendations for congressional action to strengthen the U.S. government’s role in constricting WMD proliferation finance, including:

  • Passing legislation requiring the reporting to law enforcement of the ultimate beneficial ownership of corporate entities created in the United States.
  • Considering the advancement of a financial requirement that would mandate the declaration of all cross-border payments.
  • Using congressional oversight power to ensure that the administration implements and enforces existing measures designed to prevent suspicious financial transactions.

The authors argue that the United States, while taking commendable action in the past to counter the global spread of WMDs, must heighten its focus on the financial networks that facilitate proliferation. They conclude: “It is possible to detect and track the financing of proliferation. . . . Ultimately, cracking down on the financing of illicit activities is an effective way to stop the illicit activity itself."

This briefing is part of the Key National Security Issues for Congress series, established to promote bipartisan cooperation on Capitol Hill by offering a series of practical policy proposals for lawmakers and staff.

Read the full briefing.

Authors

  • Chris Estep

    Digital Communications Specialist

    Chris Estep is the Digital Communications Specialist at the Center for a New American Security (CNAS). A graduate of Eastern Nazarene College (ENC) on Boston’s South Shore, Ch...

  • Clare Toner

    Former Intern, Communications Team

    Clare Toner is the former Joseph S. Nye, Jr. Intern for Communications at the Center for a New American Security (CNAS). Clare attends Syracuse University, studying Internatio...