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The UK is at a high risk of proliferation financing for Korea and Iran, while UK financial institutions remain the main target.
The UK has published its first national risk assessment (NRA) of proliferation financing risks, following the collection of views and evidence from the government, private sector, and academic and research partners, highlighting the proliferation financing risks facing the UK.
The UK is one of the first jurisdictions to carry out such an assessment.
While the UK currently has robust practices in place for combating proliferation financing activities, malign actors involved in proliferation financing seek to exploit the UK’s stability in the global economy and international financial system. The act involves the use of funds for facilitating chemical, biological, radiological, and nuclear (CBRN) programmes which pose a threat to the UK’s national security objectives and threaten international peace.
The key findings of the proliferation financing NRA have been identified as the following:
- The UK’s financial sector is at high risk from proliferation actors. The UK’s financial services industry, particularly the banking and insurance sectors, is especially at risk
- The Democratic People’s Republic of Korea (DPRK) and Iran are the most significant proliferation financing actors at the state level
- The private sector has limited awareness regarding proliferation financing compared to other risks, such as money laundering and terrorist financing
The notice issued by the UK government states that “a lack of awareness of proliferation financing in parts of the UK economy can lead to a lack of understanding of how certain industrial products, for example, may be manipulated for hostile use or for use in a CBRN programme”.
Despite the above-mentioned threats, the NRA highlights the robust counter-proliferation legal framework in place in the UK that protects the country from proliferation financing.
The UK’s autonomous financial sanctions regimes targeting CBRN proliferation, as well as other regulations in the UK, including UN sanctions regimes, export control regimes, and other tools available to the UK Government, limit opportunities for proliferating actors to exploit the UK to obtain financing for CBRN capabilities.
The full assessment can be viewed here.
Suggested Read: FATF Issues New Guidance on Mitigating Proliferation Financing Risk