“ Taccurate and
he fate of the nation well may rest on
complete intelligence data which may serve as a trustworthy guide … in a troubled world where so many forces and ideologies work at cross purposes .” 1
On Saturday , October 7 , 2023 , the Gaza-based terrorist group Hamas commenced a large-scale attack on Israel , launching thousands of rockets and gunning down civilians just after daybreak . According to Israel ’ s Foreign Ministry , 2 since the initial attack , Hamas has killed approximately 1,200 Israelis . Innocent lives have now been lost on both sides of the escalating war . We mourn the loss of innocent life wherever it happens . And those whose profession and mission it is to detect and prevent illicit finance from wreaking havoc on communities and financial systems will no doubt turn a renewed and sharpened focus to the entities and methods that fund these atrocities . How can we do that and be more effective than in times past ?
In reading through the news coverage and trying to unpack the senselessness , a report emerged regarding what may have been known about the attack before that fateful Saturday . According to a CNN article , “ The [ U . S .] intelligence community produced at least two assessments … of an increased risk for Palestinian-Israeli conflict in the weeks ahead of Saturday ’ s seismic attack on southern Israel , according to sources familiar with the intelligence .” 3 The article goes on to state that the assessments did not necessarily offer specific details on the scale , scope or tactics of the attack , but that the risk of escalation was rising .
Then came this striking statement from the article : “‘ The problem is that none of this is new ,’ said one of the sources familiar with the intelligence . ‘ This is something that has historically been the norm .... I think what happened is everyone saw these reports and were like , ‘ Yeah of course . But we know what this will look like .’” 4
In other words , there was a general agreement and acknowledgment of the type of risk itself ( i . e ., Hamas as a threat to attack Israel ) but not a precise understanding of the magnitude of that risk .
In the AFC space , there is a general acknowledgment of the most prominent risks we all face . We know fraud and cybercrime is a systemic problem . We know pig butchering scams are on the rise . We know drug cartels and transnational organized crime networks exploit our financial system across the globe to launder their ill-gotten gains . We know Russian oligarchs use shell companies in various jurisdictions to evade sanctions . “ None of this is new .”
But do we know , on a quantitative basis , the magnitude of each of those risks ? How much volume each year stems from those bad actors , how is it changing over time , what specific venues and jurisdictions are being exploited , and how does illicit activity adapt to our countermeasures like sanctions designations ? In the dollar-fiat context , we have estimated by think tanks , past suspicious activity reports , subject-matter expert anecdotes and targeted risk assessments that speculate on those questions . We then base the vast majority of our control environment decisions on those best approximations . However , there exists a risk that we may misjudge , wrongly assess or
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