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Finance/Security practice after 9/11: Following the Money from Transaction to Trial

Periodic Reporting for period 3 - FOLLOW (Finance/Security practice after 9/11: Following the Money from Transaction to Trial)

Reporting period: 2019-09-01 to 2021-02-28

The core problem problem / issue
Financial warfare positions banks and financial institutions in the frontline of security practice and fighting terrorism. Banks and financial institutions have substantial discretion to make independent decisions on what they deem to be suspicious, and when to freeze transactions. FOLLOW aims at understanding and analysing the security practices that render financial transactions into security intelligence, into court evidence. The novel approach is to map the path of the suspicious financial transaction as a ‘chain of translation.’ Banks and other financial institutions are required to deliver Suspicious Transactions Reports (STRs) relating to terrorism to their national Financial Intelligence Units (FIUs). FIUs develop leads for police and prosecution. Subsequently, cases may be referred for further investigation and court deliberation. Alternatively, cases may reach court through the so-called Terrorism Financing Tracking Programme (TFTP), the US-led security program that analyses transactions data from SWIFT.

We consider this chain of translation to be a security chain, where knowledge is formed in practice. This project follows the chain of security, and asks: what gets lost and added in the process of translating financial transactions from banks to FIUs to courts? How does financial warfare lead to fine-grained financial data profiles; influential typologies of vulnerable sectors; and case law on terrorism facilitation?

Why is it important to society?
These security practices have important implications for everyone with a bank account, yet remain largely invisible. Banks develop fine-grained financial lifestyle profiles of all their customers. Financial Intelligence Units hold large databases of suspect transactions, that are inaccessible to citizens. Courts are confronted with the question of the future use and intent of suspect financial transactions. The societal implications of financial warfare remain poorly understood.

What are the overall objectives?
‘FOLLOW’ denotes the novel approach of following the series of translations that render financial transactions into indicators of suspicion, into evidence of wrongdoing in the chain of security. FOLLOW achieves four research objectives:
• To document and analyse the privacy challenges faced by practitioners in the chain of translation;
• To understand and analyse the knowledge practices across the chain of translation and their incorporation of preemptive methodologies;
• To understand and analyse the situated judgement concerning normal, abnormal and suspicious transactions within different professional domains;
• To move beyond effectiveness, in order to map and analyse the effects of financial warfare in term of data profiles; suspicious typologies; and accumulating case law.
From the beginning of the project the work performed by the project has focused on:
• Fieldwork: extensive fieldwork and interviewing have been undertaken with relevant actors (including banks, Financial intelligence Units, courts, police organisations, international policy platforms) from the beginning of the project until the reporting period though over 40 research expeditions. The team as a whole has also undertaken participant observation at a number of industry and practitioner conferences and fora in diverse European countries (i.a. ACAMS European conference, Chatham House and the Cambridge Symposium on Financial Crime). We have also been able to visit and interview the most important international organisations that play a key role in global counter-terrorism financing, including the Financial Action Task Force (in Paris), Europol (in The Hague) and ECOFEL (part of the Egmont group, in Toronto).
• Methodological work: The first half of the project has been dedicated to refining our approach and developing new methods and research tools, specifically to address the challenge of secrecy in security research. This work took place at our workshop “Secrecy and Methods in Security Research” in October 2017. Parts of it were published in the Journal of European Integration (2017). The project will culminate in our edited collection “Secrecy and Methods in Security Research: A Qualitative Fieldguide” to be published by Routledge in 2019.
• Conceptual dialogue: The first half of the project has focused on conceptual refinement and dialogue with Science & Technology Studies (STS). This work centered around our workshop “Translating STS to Security Sites” in June 2018 and our key conceptual contributions have been published in Review of International Studies (https://doi.org/10.1017/S0260210517000353) the European Journal of Social Theory (https://journals.sagepub.com/doi/10.1177/1368431016679167) and several book chapters. A Special issue project is in progress.
• Main results. We have published 15 articles and book chapters to date, and have delivered over 60 lectures, conference papers and contributions to workshops and conferences.
Findings concerning the four research elements related to our core research objectives can be summarized as follows.
- Concerning privacy, we observe a shift toward targeted public-private financial data sharing. We analyse the development of Fintech solutions to address privacy challenges at the finance/security nexus. We conceptualise privacy as at least partly infrastructural.
- Concerning knowledge practices: we observe a vibrant international field of workshops, practitioner conferences with an important role for trust and training.
- Concerning situated judgement, we observe a diffuse public private security field, where responsibility is dispersed and elusive.
- Concerning effects, we have contributed to policy discussions by raising questions concerning accountability, transparency and privacy of security decisions based on financial data in our report ‘Counter-Terrorism Financing Policies in The Netherlands: Effectiveness and Effects’, see: https://www.wodc.nl/onderzoeksdatabase/2689d-beleidsmonitor-terrorismefinanciering-1.aspx
The next phase of FOLLOW will focus on:
(a) Developing the analysis within each sub-project through the 4 elements that are central to FOLLOW. These analyses will be presented in FOLLOW deliverables, including a set of journal articles in peer-reviewed journals and at least three PhD theses.
(b) Further enhancing interdisciplinary engagement with disciplines beyond Politics and International Studies, to foster dialogue with Law, Political Economy, STS, and scholars of the digital, through (ia) a workshop on ‘Finance/security’ and an STS/security special issue project.
(c) Developing the synthetic work across sub-projects and fieldsites, in order to bring together the ‘chain’ of reporting and investigation (from Transaction to Trial). This comparative and synthesizing work will help FOLLOW move beyond the state-of the-art in literatures of critical security studies, International Relations and STS and adjacent fields. Among the preliminary findings:
1. We observe that ‘terrorism financing’ is a broad policy arena that serves not purely to target potential terrorists, but that functions as a problem space that fosters creative security initiatives at the limits of law, including for example creative public private data sharing.
2. There is great research value in bringing together ‘the chain’ and developing visualisations of it. A next step for FOLLOW will entail a further mapping and remodeling of the chain, including notions of relays, feedback loops, decision trees and labyrinths.
3. Policy participants and international organisations cast their role less in terms of policy steering and policy development, and more in terms of ‘facilitating’ and ‘connecting’ national public and private actors. Modelling this dispersed responsibilities and judgements is vital to a better understanding of the power at work in contemporary security practices and its societal effects.
4. Court cases on terrorism financing are increasing and they are significant to the extent that they touch on some of the fundamental problems of law in democratic societies.
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