Financial intelligence

FININT involves scrutinizing a large volume of transactional data, usually provided by banks and other entities as part of regulatory requirements. Alternatively, data mining or data-matching techniques may be employed to identify persons potentially engaged in a particular activity. Many industrialized countries have regulatory reporting requirements for its financial organisations. It may be possible for the FININT organization to obtain access to raw data at a financial organization. From a legal standpoint, this type of collection can be quite complex. For example, the CIA obtained access to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) data streams through the Terrorist Finance Tracking Program, but this violated Belgian privacy law. Reporting requirements may not affect Informal value transfer systems (IVTS)^[1] the use of which may simply be customary in a culture, and of amounts that would not require reporting if in a conventional financial institution. IVTS also can be used for criminal purposes of avoiding oversight.

Examples of financial intelligence analysis could include:

• Identifying high-risk housing tenants on the basis of past rental histories.
• Detecting tax payers trying to avoid their fiduciary obligations by moving wealth surreptitiously out of a tax-levying jurisdiction.
• Discovering safe havens where criminals park the proceeds of crime.
• Accounting for how a large sum of money handed to a targeted individual disappears
• Checking to see if a corrupt individual has had any sudden and unexplained windfalls.
• Detecting relationships between terrorist cells through remittances.

U.S. domestic financial intelligence falls in the purview of several U.S. federal agencies. Which agency handles a financial-intelligence issue depends mainly on the character of the money activity. If the issue involves securities trading in capital markets, disclosure, broker-dealer conduct, or market manipulation, it generally falls within the SEC's jurisdiction; in the securities sector, firms also file Suspicious Activity Reports with FinCEN under Bank Secrecy Act rules.^[2] If the issue involves the banking sector, for example money laundering, terrorist financing, suspicious transaction reporting, or broader anti-money-laundering controls, it is primarily FinCEN's domain, as FinCEN serves as the United States' financial intelligence unit.^[3] Another U.S. Treasury unit--OFAC--oversees issues centered on sanctions, blocked property, or prohibited dealings with foreign targets. OFAC administers and enforces U.S. financial sanctions.^[4] If the financial intelligence issue concerns foreign threats, hostile states, or cross-border financial activity as a matter of national security, it is chiefly the role of the CIA, which collects and analyzes foreign intelligence for U.S. policymakers.^[5]

The United States Department of the Treasury, especially under the Under Secretary of the Treasury for Terrorism and Financial Intelligence, who oversees Terrorism and Financial Intelligence (TFI). TFI includes:

• Financial Crimes Enforcement Network (FinCEN)
• Office of Foreign Assets Control (OFAC)
• Office of Intelligence and Analysis
• Office of Terrorist Financing and Financial Crimes
• Treasury Executive Office for Asset Forfeiture

The U.S. Securities and Exchange Commission (SEC) plays a significant role in U.S. financial intelligence work, especially involving financial activity on U.S. capital markets or U.S. market players. In the securities sector, broker-dealers and certain other regulated entities file Suspicious Activity Reports with FinCEN, while the SEC examines for compliance with anti-money-laundering rules and brings enforcement actions involving suspicious trading, market manipulation, and failures to comply with Bank Secrecy Act obligations.

International financial intelligence work in the United States also involves the Central Intelligence Agency, and other intelligence and law-enforcement agencies. See, for example, reporting on U.S. government access to data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

In practice, these agencies often coordinate through referrals, Suspicious Activity Reports, and interagency information sharing, but once a matter becomes public the lead usually shifts to the agency with the clearest jurisdictional authority, with the Department of Justice often taking primary control if criminal charges are filed.^[6][7][8] Recent examples of such collaboration are hard to become public due to the sensitive nature of cases and classification issues. However, a prominent public example was the Bank of Credit and Commerce International (BCCI) affair in the late 1980s: an official U.S. congressional intelligence study said the CIA had used BCCI for its own purposes while also reporting on its illegal activities, while the Justice Department publicly brought charged BCCI as a criminal money-laundering enterprise; the SEC charged BCCI for violating Section 13(d) of the Securities Exchange Act of 1934 by secretly acting as a group to acquire more than 5 percent of Financial General Bankshares—the predecessor to First American Bankshares—without making the required disclosuresand; FinCEN later used the case as a standard money-laundering example: the United States Department of the Treasury was involved in the BCCI affair mainly through its regulatory and information channels: BCCI's Washington representative office was registered with the Secretary of the Treasury, and a U.S. Senate investigation later found that both the Treasury Department and the Office of the Comptroller of the Currency had relevant information about BCCI's hidden U.S. activities that was not adequately passed to the Federal Reserve.^[9][10][11].^[12][13][14]