The 2024 National Strategy for Combating Terrorist and Other Illicit Financing (the 2024 Strategy; Illicit Finance Strategy [IFS]) lays forth a blueprint for U.S. government efforts to effectively address the most significant illicit finance threats and risks to the U.S. financial system.
It is organized around the principle that a strong and transparent financial system that denies illicit actors access to the funds and resources they need to carry out harmful activities or to profit from their crimes, protects ordinary Americans, furthers U.S. national security, and supports equitable economic growth. The 2024 Strategy illustrates the U.S. government’s response to an ever-evolving global landscape affecting the illicit finance risk environment. This risk environment includes a range of scams and frauds, potent ransomware attacks, an opioid-driven overdose epidemic, foreign and domestic terrorist attacks, corruption, and criminal exploitation of technological advances in payments and financial products and services.
More recent events, such as Hamas’s brutal terrorist attack on Israel and Russia’s continued full-scale invasion of Ukraine, have shaped the illicit finance risk environment. The 2024 Strategy also recognizes the response to these risks, such as the enactment of significant new requirements in the U.S. anti-money laundering/countering the financing of terrorism (AML/CFT) regime and the unprecedented international sanctions and economic pressure campaigns that have been waged in response to the actions of Hamas and Russia.
Appraising the Illicit Finance Threat Environment’s Impact on the U.S. Financial System The United States continues to face a variety of illicit finance threats, the most concerning or consequential of which are consistent with the National AML/CFT Priorities,2 including fraud, drug trafficking, cybercrime, corruption, transnational criminal organizations, professional money laundering organizations, human trafficking, human smuggling, and those seeking to finance terrorism and the proliferation of weapons of mass destruction (WMD).
Since the publication of the last IFS in 2022, there has been a notable uptick in state, state funded, and state-affiliated actors laundering and moving funds to wage war, facilitate terrorism, support WMD proliferation, and carry out other activities that undermine global security and stability. Russia’s unjust and unprovoked war against Ukraine and the terrorist attack perpetrated by Hamas on October 7, 2023, are examples of the utter destruction and increased geopolitical uncertainty that result from state and state-funded actors intensifying efforts to undermine the existing international order.
Many of these state-affiliated actors and their associates serve autocratic leaders who seek to undermine the existing rules and institutions respected by the United States and its democratic allies. This activity includes weaponizing the openness and interconnectivity of the global financial system to hide illicit wealth, supporting extremist groups in democratic countries, and uncompetitively promoting state-backed companies and firms in international markets.
Thus, while ordinary American citizens and companies follow one set of rules, autocrats, oligarchs, and their facilitators routinely violate norms to extract profit, sow political discord, and further distort the U.S. economy and financial system. In response, the United States and its allies have taken robust and coordinated multilateral sanctions and enforcement actions against these various threats to cut off funding for state-affiliated and other illicit actors and to deter other would-be aggressors and criminals.
These actions have significantly altered the illicit finance regulatory and enforcement landscape and have resulted in the use of novel tools and unprecedented levels of international enforcement coordination to combat these threats.
For example, in December 2023, President Biden signed an Executive Order that strengthened U.S. sanctions authorities against financial facilitators of Russia’s war machine, such as financial institutions that conduct or facilitate significant transactions for or on behalf of already sanctioned entities in the Russian military-industrial base.3 Further, the Russian Elites, Proxies, and Oligarchs (REPO) Task Force has blocked or frozen tens of billions of dollars’ worth of sanctioned Russians’ assets and immobilized Russia’s own sovereign assets in the United States and other REPO jurisdictions.
Additionally, as governments around the world have obtained more information regarding Hamas’s financing, the United States has cooperated and shared information with allies and international partners to take extensive multilateral action to target and disrupt Hamas financing networks, including those that involve virtual assets. The United States must continue to leverage its authorities to combat illicit proceeds and coordinate closely with its allies and partners to target Hamas and its international financial infrastructure.
May 19, 2024 Published by The Department of the Treasury. (Download the PDF report)
