Financial Crime World

Combating North Korea’s Cyber-Enabled Proliferation Finance Schemes Abroad

Introduction

The international community has been increasingly concerned about North Korea’s cyber-enabled proliferation finance schemes abroad. To combat this threat, a comprehensive policy framework is necessary to detect, deter, and report North Korean cyber-enabled financial crime and hacking of financial institutions.

Key Recommendations

1. Establishing a DPRK Cyber Exchange

The creation of a platform for information-sharing between law enforcement and financial institutions is crucial in detecting and preventing North Korea’s cyber-enabled proliferation finance schemes. This platform should enable the following:

  • Information-Sharing: Facilitate the exchange of intelligence and best practices among financial institutions, law enforcement agencies, and government bodies to identify and mitigate potential threats.
  • Real-Time Monitoring: Allow for real-time monitoring of suspicious transactions and hacking attempts to prevent unauthorized access to financial systems.

2. Levying Fines on Non-Compliant Financial Institutions

To ensure compliance with cybersecurity protocols, the Department of Justice should impose fines on financial institutions that fail to meet basic CISA, Treasury, and FATF cybersecurity standards by the end of 2021. This includes:

  • Cybersecurity Audits: Require regular cybersecurity audits as part of deferred prosecution agreements.
  • Enforcement Mechanisms: Establish clear enforcement mechanisms for non-compliant institutions.

3. Enhancing Cybersecurity Dialogue with Correspondent Banks

Regular engagement in cybersecurity dialogue between U.S. financial institutions and correspondent banks is essential to ensure the integrity of transactions and the U.S. dollar abroad. This includes:

  • Cybersecurity Best Practices: Share best practices for implementing robust cybersecurity measures.
  • Real-Time Collaboration: Foster real-time collaboration to identify and respond to emerging threats.

Conclusion

The recommendations outlined in this policy framework are based on existing laws and regulations, such as section 314(b) of the USA Patriot Act. By implementing these measures, we can effectively combat North Korea’s cyber-enabled proliferation finance schemes abroad and protect the global financial system from potential threats.