IT-TLETTAX-IL LEĠIŻLATURA
P.L. 1947
Dokument imqiegħed fuq il-Mejda tal-Kamra tad-Deputati fis-Seduta Numru 137 tal-4 ta’ Lulju 2018 mill-Ispeaker, l-Onor. Anġlu Farrugia.
______Raymond Scicluna Skrivan tal-Kamra
11th Parliamentary Intelligence Security Forum
Hon Anglu Farrugia, Speaker
Parliamentary Delegation Report to the House of Representatives.
Date: 2nd July 2018
Venue: Berlin, Germany.
Maltese delegation: Honourable Anglu Farrugia, President of the House of Representatives.
Programme: At the invitation of the US Member of Congress, Robert Pittenger, Chairman of the Congressional Taskforce on Terrorism and Unconventional Warfare and Han. Johannes Salles M.P. from the Bundestag, the Speaker of the House of Representatives, Parliament of Malta, Honourable Anglu Farrugia, was invited to participate at the meeting of the 11'h Parliamentary Security-Intelligence Forum. Participation of Speaker Anglu Farrugia at the 2018 Parliamentary Intelligence Security Forum, co-hosted by Congressman Robert Pittenger and Honourable Member of the
German Bundestag, Johannes Salles MP, held on the 2nd July 2018.
The forum was opened by opening statement by Congressman Pittinger and Han. Stephan Mayer who is the Parliamentary State Secretary of the German Federal Ministry of the Interior followed by Han. Volkmar Klein. There were six panels which I attended them all. The first panel was about the FlU perspective with regards to terrorism financing and tax evasion. The panel was addressed among other keynote speakers Bruno Kahl, President of the Federal Intelligence Service and Andreas Frank who is advisor to the Council of Europe for Anti Money Laundering Directive.
The second panel was about the law enforcement perspective which centralised on human trafficking, identity theft and cyber crime. The three main keynote speakers where one from the Interpol, another one was the Commissioner of the Police Erik Akerboom from the Netherlands and the Director Belgian Special Tax Inspectorate Vannie Hulot.
The third panel was about the regulatory perspective with regards to addressing of sanctions, corruption and information sharing. James Freis, former FinCEN Director, now Chief Compliance Officer of the Deutche Boerse and the representative from the Balkans and Frederick Reynolds where the keynote speakers.
The fourth panel was about industry perspective and the panel addressed the public private partnerships. Mainly the speakers where Mr J.R. Helmig SAS former forum speaker, Kristin Reif, Director Illicit Trade Prevention Philip, Maurice International and Jessica Knight main director Sayari Analytics.
The fifth panel was about EU perspective which was addressed by the Federal Criminal Police Office of Germany, Sabine Wellingan and the President of the German Federal Office for Information Security Arne Schonbohn and also the Vice President of the Government and Industrial Relation of Ericsson, Ulf Pehrsson.
The sixth panel addressed the emerging market and countries' perspective and was addressed by Klein Volkmar MP, Andrew Davenport who is the advisor in the Advisory Group, Prague Security Studies Institute and Gabrielle Haddad who is Sigma Ratings CEO. The closing remarks were done by Congressman Robert Pittinger, the Member of Parliament of Bundestag Germany Johannes Salles and the Member of the Egyptian Parliament Karine Darwiesh.
My interpretation was mainly on the question of enforcement especially when with the regards to FlU, Germany, the largest EU member has at least 40,000 reports of money laundering suspicions which are waiting at the dest because of lack of enforcement officials in order to investigate these reports. In fact I was referring to a comment by Andreas Frank when he mentioned the gaming companies in Malta to the intention that things are not clear enough with regards to the correctness of the registration of these companies where I even invited him to come to Malta, to see with his own eyes whether or not the compliance is in order to the effect that Malta is in full compliance with the Anti Money Laundering Directive ofthe EU. I stressed the point that if one of the leading countries in Europe, which is Germany, has not enough staff within the FIAU in order to fight organised crime or reported crime or reported money laundering, then the battle is already lost within the EU. I commented that if you don't track the money trail, you cannot address money laundering. Terrorists have their own network so we have to follow the money in order to find the source. This is the same approach with regards to the cyber caliphate of the ISIS with regards to the way they organised crime and the way they finance their own terrorist activities.
Cyber attacks and fake news should also be included in the holistic approach with regards to addressing the financing of terror finance as a threat to national security is in itself already a threat and an easy path for financing terrorism.
So I stressed the point that we have to raise more awareness of these issues. We have to popolarise the enforcement and we have to have collective approach not only within the EU but also Cross Atlantic with the United States of America.
The conference came to an end late in the evening of the 2nd July.
Speaker of the House of Representatives DIPARTIMENT TAL-INFORMAZZJONI DEPARTMENT OF INFORMATION MALTA Press Release PR 181489 01.07.2018
PRESS RELEASE BY THE OFFICE OF THE SPEAKER
PRESS RELEASE BY THE OFFICE OF THE SPEAKER
Speaker Anglu Farrugia participates in the Parliamentary Intelligence-Security Forum held in Berlin, Germany
Speaker Anglu Farrugia left Malta for Berlin to participate in the 11th Parliamentary Intelligence· Security Forum.
The Parliamentary Intelligence-Security Forum is being co-organised by US Congressman and Chairman of the Congressional Taskforce on Terrorism and Unconventional Warfare Robert Pittinger, and Johannes Selle, MP from the Bundestag.
Attachments: none Page: 1 of 1 3, CASTILLE PLACE, VALLETTA VLT 2000 Tel +(356) 2200 1700 Fax +(356) 2200 1775 [email protected] www.doi.gov.mt Bilateral meeting with Ms Hope Hutchinson, Treasury Advisor- EUCOM
During my participation at the Parliamentary Intelligence-Security Forum on the 2nd July, 2018, I met Ms Hope Hutchinson, the Treasury Advisor and Policy Advisor of the Terrorist and Financial Intelligence Crimes of the US Department of the Treasury Terrorism and Financial Intelligence of Washington who was also attending this Parliamentary Intelligence-Security Forum. She requested a meeting with me to discuss some recent legislation enacted in Malta related to virtual currency, digital innovation and sanctions.
The bilateral meeting was held at the German Bundestag, and present for the meeting was also the Ambassador of Malta to Germany. I gave Miss Hutchinson a copy of documentation related to Bills discussed in Parliament, mainly the proposed regulatory framework for virtual currencies and the distributed leisure technology known as DLT. I explained to her that the Maltese Parliament has already approved these three Bills at the Second Reading stage. The first occasion when these were explained to the public was on the 16 February when Han. Silvio Schembri, the Parliamentary Secretary for Financial Services, Digital Economy and Innovation, unveiled a consultation document on the establishment of the Malta Digital Authority. I explained to her that the Maltese regulator is currently working on these three documents.
During this meeting I explained to Ms. Hutchinson who later on was joined also by Congressman Pittinger together with his staff about the related definitions of what constitute for example revolution in the financial services industries like the distributed leisure technology or the types of DLT or the actual auditing of these virtual currencies within this new industry and also the fact that Malta was the first to legislate these important legislations in the whole world. I also explained to her that the Han. Silvio Schembri had also meetings in the States, primarily in New York. She was very much interested in the fact that we immediately addressed this new business of virtual currency technology where it is now being regulated and not left unregulated.
I stressed the point that there is no question of going back because the Bitcoin and other virtual currences are here to stay and we will have more of them in the immediate future. She was very much interested and also having a copy of what has been debated in Parliament where I assured her that there was a clear open debate between Government and Opposition where both ofthem agreed to pass these legislations and these legislations are now a model for other countries to follow. The meeting ended with the understanding that she will receive further information from the Maltese Parliament after I return back to Malta following this Parliamentary Intelligence-Security Forum. During the meeting I was always accompanied by Ambassador Friggieri, the Maltese Ambassador in Germany. Annex to this report:
• Invite to the participants dated 26th March 2018 to participate at the 11th Parliamentary Intelligence & Security Forum. • Programme • Parliamentary Intelligence & Security Forum -Winter 2015-2016 Report • gth Parliamentary Intelligence & Security Forum Report ROBERT PITTENGER OISHIICT OFFICES: M~MBEA Of CONGRESS 5970 fAIRVIEW Rol\ll flm DISlmCT, NollTII CAROLINA SUITE 430 CHAI\LOnE, NC 28210 {704) 362·"1060 224 CANNON HouaE 0Hit:t: BUILOIN(l fAX! (704) 365N63S4 WASHINGTCl~J, DC 20!>16 ~ongre$)5 of tbe mntteb ~tates (202) 225-1976 f'AX: (202} 226-3369 ~ouse 100 w, J~;HEnaoN SnH:~r of lL\epresentati\.Jcs Sun-e1A MONROE, NC 2tS1 12 (704) 917-91\73 COMMlnlfOS: 'Bn!ilJtnnton, tllll!: 20515-3309 FINANCIAL SERVICES March 26, 2018 301 GAEEN STR~ET SUITE 316 r:Av~nF.VILLE, NC 28301 Dear Forum Participant (!'110) 303-0609
Wmm greetings. The planning for the 11 111 Parliamentm·y Intelligence Security Forum in Berlin, Germany is underway. We would like to inform yon that this event will take place on July 2, 2018. This event will be co-hosted by Congressman Robert Pittenger, and the Bundestag.
Over the past several years, the Parliamentary Intelligence Security Forums have attracted 700 Members of Parliament and govemment o·fficirus from over 70 countries to discuss terrorism fillancing, cybersecurlty, and intelligence collaboration.
From om· friend and forum participant, Dr. Fritz Felgentreu, a member of the Bt111destag: "The challenges to defeat terrorism, including collaboration on cyber sec1U·ity, illicit finance and intelligence sharing, which we discussed during the forum, will be on the transatlantic agenda for many years to come. The recent attacks in Paris demonstrate that it is significant for the westem democracies to develop and implement common answers within our community of shared values."- Dr. Fritz Felgentreu
Kindly RSVP to Marco Sylvester ([email protected]) to confirm participation or request additional intbrmation.
Sincerely,
Robmt Pittenger Chairman Task Force on Terror and Unconventional Warfare
PAINTED ON RECYCLED PAPER Parliamentary Intelligence-Security Forum Location TBD Reichstag, Berlin, Germany
Goal: Provide a current status and forward look ahead on critical topics
Monday, July 2, 2018
8:00AM Registration I Morning Assemble
8:30 ·9:15AM Welcome I Opening St!!:~l!J)ents CongressmanJJI/ll/if!fger, Han Stephan Mayer (Parliamentary State Secretary at the German Federal Ministry of the Interior.), Volkmar Klein, MP ,2tb:;;,, ,. ,_.: -: ------~-~-w:~~~ 1"' Pane!. 10:30-11 lfoii'i::!!ii11Emt Perspective ng, identity theft, cyber, etc . . Hulot, Director, Belgian Special Tax 1 1 · .,~§i~G'&t~~~~·N.n'es,tphlil'ecnttf~~tilra•ditse- Erik Akerboom, Commissioner of the • )i!i,()/jc;e or Dick Schoof, National Coordinator for Setilfity and Counterterrorism };.;3. Interpol recommendation forthcoming Yc'}"-' 3'" Pahel Regulatory Perspective 3 panelists- sanctions, corruption, info sharing 1. James Freis former FinCEN Director, now Chief Compliance Officer of Deutsche Boerse 2. Frederick Reynolds- Barclays 3. Dan Coats, Director of National Intelligence, tbc. 12:30 PM -1:15 Lunch 1:15-2:15PM 4'" Panel Industry Perspective 3 Panelists- AI, loT, public-private partnerships, etc. 1. JR. Helmig, SAS, former forum speaker 2. Kristin Reif, Director Illicit Trade Prevention, Philip · Morris International 3. Jessica Knight, Managing Director, Sayari Analytics 1 2:15 ·3:15PM 5'" Panel Military Perspective 3 Panelists- Emerging threats and response 1. Richard DeLauter- former DoD SOUTHCOM civilian executive now EUCOM executive (or Rick can liaison with US Military for speaker) 2. Ben Hodges, Commanding General United States Army Europe tbc. 3. Holger Munch, Pre$/dent of the Federal Criminal Police Office ofG'iii,rmany 3:15 ·4:15PM 4:15-5:15PM on+o·;.,., Perspective 0 assistance, etc. Rl;>r.k~iR.n*. World Economic .. ••. - Prague S~"iJ~pjty Institute Dussey, Foreign /lllinister of the 6:00-8:00 2 CONGRESSIONAL TASKFORCE ON TERRORISM AND UNCONVENTIONAL WARFARE Parliamentary Intelligence-Security Forum Winter 2015-2016 Report "fl-m HONORAlii.E RoaERT M. PlrrnNCER l'oR MOR~ L'lroRMATIONo CJmirmom (202)225-1976 PARLIAMENTARY INTELLIGENCE SECURITY FORUM Winter 2015-2016 Report j Strategy-Based Approach Far too often, policy-makers fail to align budgeting and policy with a coherent strategy that reflects international security interests. The United States and its allies distribute vast amounts of resources in an effort to provide security and improve conditions around the world. Unfortunately, when those resources are not properly directed at achieving specific strategic goals, effectiveness suffers. For example, it appears our government has overcommitted to an airstrike-only strategy against ISIS- a strategy that has failed to reduce the amount ofiSIS soldiers on the battlefield. If the administration is serious about defeating ISIS, it must consider alternative strategies that more effectively degrade the enemy. As Chairman of the Congressional Taskforce on Terrorism and Unconventional Warfare, it has been my goal to streamline the process of providing security resources towards focused and effective strategies. An important strategic effort, for example, is countering terrorist group financing. There are many instances where our government can improve policies that assist law enforcement efforts to track and seize terrorist group funding. Moreover, the United States can enact policies that compel foreign governments to fully enforce their own terror finance laws. When we look at the history of warfare and security policies, the most effective strategies have been narrowly tailored, with resources being devoted towards accomplishing targeted objectives. Legislators must consider this when appropriating resources for security initiatives -especially when addressing asymmetrical warfare policies. With this in mind, I am pleased to have hosted parliamentarians from over 25 countries for the 3'd Annual Parliamentary Intelligence-Security Forum, which occurred this past October 2015 in the Member's Room of the Library of Congress. For two days, discussions were held on how to reconcile strategy, budgeting, and policy initiatives on a range of issues, including countering terrorist group financing, cybersecurity, intelligence sharing, and counterterrorism policies. On behalf of the legislators and policy experts who participated, I am pleased to release the following report which reflects our discussions and policy recommendations. A continued international dialogue will lead to broader cultural tmderstanding and more effective security policy implementation. Robert Pittenger Member of Congress Chairman, Congressional Taskforce on Terrorism and Unconventional Warfare Introduction The 3'd Annual Parliamentary Intelligence-Security Forum provided an opportunity for legislators, Ambassadors, Executive officials, and security experts to engage in meaningful and open dialogue on timely and important policy matters. The themes for this year's forum included: • Countering terrorist group financing; • Cyber and technological supply-chain security; and • International counterterrorism strategy and policy. For two days, international legislators participated in several roundtable discussion sessions to exchange ideas and address mutual concerns. The Congressional Taskforce on Terrorism and Unconventional Warfare is pleased to publish the following report based on those discussions. This report includes a list of international participants, executive summaries of the various panel sessions, as well as a list of recommended action items for the United States Congress. International Participants Australia The Honorable Peter Heyward, Ambassador Austria The Honorable Werner Amon, Member of Parliament Austria The Honorable Andreas Karls bOck, Member of Parliament Austria The Honorable Hannes Weninger, Member of Parliament Austria The Honorable Peter Pilz, Member of Parliament Albania The Honorable Ilir Meta, Speaker of the Parliament Albania The Honorable Ara Dade, Member of Parliament Albania The Honorable Floreta Faber, Ambassador Bulgaria The Honorable Atanas Atanassov, Member of Parliament Bulgaria The Honorable Dimitar Lazarov, Member of Parliament Bulgaria The Honorable Valentin Kasabov, Member of Parliament Bulgaria The Honorable Tsvetan Tsvetanov, Member of Parliament Bulgaria The Honorable Filip Popov, Member of Parliament Croatia The Honorable Josip Leko, Speaker of the Parliament Croatia The Honorable Davor Bozinovic, Member of Parliament Cyprus The Honorable Demetris Syllouris, Member of Parliament Cyprus The Honorable Andreas Nikolaides, Deputy Chief of Mission Czech Republic The Honorable Jaroslava Jermanova, Member of Parliament Czech Republic The Honorable Josef Zahradnicek, Member of Parliament Czech Republic The Honorable Jana Cernochova, Member of Parliament Czech Republic The Honorable Vaclav Klucka, Member of Parliament Czech Republic The Honorable Bronislav Schwarz, Member of Parliament Denmark The Honorable Michael Jensen, Member of Parliament Finland The Honorable Eero Heinaluoma, Speaker of Parliament Georgia The Honorable lrakli Sesiashvili, Member of Parliament Georgia The Honorable lrakli Chikovani, Member of Parliament Georgia The Honorable Archil Gegegshidze, Ambassador 1 International Participants Germany The Honorable Clemens Binniger, Member of German Bundestag Germany The Honorable Fritz Felgentreu, Member of German Bundestag Germany The Honorable Stephan Mayar, Member of German Bundestag Germany The Honorable Hans-Christian Striibele, Member of German Bundestag Germany The Honorable Karl-Georg Wellmann, Member of German Bundestag Germany The Honorable Uli Griitsch, Member of German Bundestag Germany The Honorable Andre Hahn, Member of German Bundestag Hungary The Honorable Gergely Gulyas, Member of Parliament Hungary The Honorable Marton Gyiingyiisi, Member of Parliament Hungary The Honorable Andras Schiffer, Member of Parliament Hungary The Honorable Tamas Harangoz6, Member of Parliament Ireland The Honorable Pat Breen, Member of Parliament Italy The Honorable Paolo Alii, Member of Parliament Latvia The Honorable Ainars Latkovskis, Member of Parliament Latvia The Honorable Sol vita Aboltil)a, Member of Parliament Lithuania The Honorable Emanuelis Zingeris, Member of Parliament Luxembourg The Honorable Claude Wiseler, Member of Parliament Malta The Honorable Angelo Farrugia, Member of Parliament Montenegro The Honorable Ranko Krivokapic, President of the Parliament Montenegro The Honorable Darko Pajovic, Member of Parliament Norway The Honorable Kenneth Svendsen, Member of Parliament Norway The Honorable Andres Werp, Member of Parliament Norway The Honorable Kaare Simensen, Member of Parliament Romania The Honorable Petru Gabriel Vlase, Member of Parliament Romania The Honorable Valeriu Zgonea, Speaker of Parliament Romania The Honorable Georgian Pop, Member of Parliament Romania The Honorable Alexandru Nazare, Member of Parliament Romania The Honorable Sarin Cimpeanu, Member of Parliament Romania The Honorable Mihnea Costoiu, Member of Parliament Romania The Honorable Christian Istrate, Ambassador Romania The Honorable George Maior, Ambassador Slovenia The Honorable Branko Grims, Member of Parliament Slovenia The Honorable Jasna Murgel, Member of Parliament Sweden The Honorable Anti Avsan, Member of Parliament Sweden The Honorable Arhe Hamednaca, Member of Parliament Ukraine The Honorable Valentyn Karvan, Embassy Counsel Ukraine The Honorable Vitaliy Pogribnyi, Embassy Counsel United Kingdom The Honorable John Spellar, Member of Parliament United Kingdom The Honorable Bob Stewart, Member of Parliament United Kingdom The Honorable Crispin Blunt, Member of Parliament 2 Presentations Welcome I Opening Statements The Honorable Jeb Hensarling Chairman, House Committee on Financial Services The Honorable Michael Fitzpatrick Chairman, Financial Services Committee Task Force to Investigate Terrorism Financing The Honorable Bill Huizenga Chairman, Financial Services Subcommittee on Monetary Policy and Trade Brigadier General John A. Byrd Assistant Adjutant General, Army, North Carolina National Guard Introduction speakers focused on the importance of the Forum and the issues at hand. Especially with a multi-national audience, it is important to fully utilize opportunities to collaborate on security issues. Furthermore, introduction speakers emphasized the importance of tracking and preventing terrorist group financing. Stopping the flow of dollars to illicit enterprises should be a priority for coalition governments. "Modern groups, such as ISIS, have access to global financial institutions. For a halfa million dollars, terrorist groups were able to murder 3, 000 ofour citizens. Today, a halfa million dollars is pocket change for a terrorist group like ISIS "-Chairman Hensarling Judicial Role in Security Policy The Honorable Bob Goodlatte Chairman, House Committee on the Judiciary Chairman Goodlatte appeared as the Forum's first panelist. He has served on the House Judiciary Committee since he first assumed office in 1993. Chairman Goodlatte discussed the evolving nature of threats that affect the United States and its allies, and how security and enforcement laws must adapt to address the changes. Mr. Goodlatte argued that there must be a constant balance between protection capabilities and civil liberties when implementing security policies. "The USA Freedom Act represents government at its best: it is the product ofa robust public debate and intense bipartisan negotiations dedicated to finding a way to protect our Constitutional rights while enhancing the safety ofour country. The bipartisan law ends the bulk collection oftelephone metadata once and for all, enhances civil liberties protections, increases transparency for both American businesses and the government, and provides national security officials targeted tools to keep America safe. "-Chairman Goodlatte 3 Trans-Atlantic Relationship I Current Threats The Honorable Michael Chertoff Former Secretary, Department of Homeland Security "This is the most world disorder we've ever seen. With the Cold War, there was conflict around the edges, but it was unlikely there would be an outbreak ofdirect conflict. Today, there is extreme fragmentation, especially in the Middle East, to the point where terror groups have metastasized in many parts ofAfrica and Asia- and conflict is much more likely. " - Secretary Chertoff Secretary Chertoff discussed the evolution of terror tactics in 2015. Modern terror groups have placed emphasis on carrying out multiple smaller scale attacks. Technology and social media have enabled malicious groups to adjust their strategy and tactics to become more efficient at recruitment and the execution of operations. Further, Mr. Chertoff stated that Russia's involvement in the Middle East destabilizes the region, fuels civil war, and exacerbates the current refugee crisis. "Europe and the U.S. do not have a cohesive approach to address Russian involvement in Syria. " Secretary Chertoff Lastly, Mr. Chertoff discussed next generation cyber threats, which include targeting and attempting to disrupt critical infrastructure (financial services, energy, telecommunications, etc). "Asymmetrical warfare levels the playing.field, and geography no longer isolates countriesfrom cyber and terror attacks. " - Secretary Chertoff Executive Branch Intelligence Community Policy and Oversight Ms. Rachel Brand Board Member, Privacy and Civil Liberties Oversight Board Mr. Jim Dempsey Board Member, Privacy and Civil Liberties Oversight Board The Privacy and Civil Liberties Oversight Board, established by Congress in 2007, is a bipartisan five member Board appointed by the President and approved by the Senate. The Board's single mission is to evaluate the balance between civil liberties and security initiatives. Ms. Brand and Mr. Dempsey belong to the Republican and Democrat parties, respectively, and both offered starkly different policy positions. Positions aside, both speakers agreed that the United States has been a world leader when attempting to balance Government surveillance and intelligence initiatives with civil liberties and personal privacy. 4 "There is a misperception- both in the American public and outside the United States- that our intelligence agencies exercise broad powers with no supervision. This could not be farther from the truth. Everything these agencies do is subject to rules, procedures, and oversight, and in some cases many levels ofrules, procedures, and oversight. "I doubt that any country has an oversight system for counter-terrorism programs that is more robust than ours. "-Ms. Brand "The lengthy process ofending the bulk collection of telephone metadata and replacing it with a more targeted program ofaccess is, in my opinion, one ofthe oversight and civil liberties successes ofthe past decade. For several years, the interpretation ofthe statute supporting the bulk collection program was itself secret. The Board specifically criticized that, and I think there is some recognition within the executive branch that that kind ofsecrecy about statutory authorities was a mistake. " -Mr. Dempsey Legislative Branch Security Policy The Honorable Devin Nunes Chairman, House Permanent Select Committee on Intelligence "We currently do not have a comprehensive strategy to deal with ISIS, whether they be in Iraq, Syria, Africa, or elsewhere. "-Chairman Nunes The Forum was fortunate to host the Chairman of House Intelligence as he spoke on the various threats currently affecting the United States and its allies, and how security matters exacerbate without American leadership. Chairman Nunes discussed how the lack of a comprehensive Middle East strategy has resulted in levels of Russian aggression that we have not seen since the Cold War. For example, it was reported that Russia appeared to be repeatedly violating Turkish airspace for weeks in its Middle East operations in support of the brutal Assad regime. On November 17, Representative Pittenger wrote the Turkish Ambassador asking if the Turkish government had communicated at all with the Russian government regarding its sovereign airspace. Unfortunately, this situation culminated when Turkey appeared to have shot down a Russian warplane flying over its territory on November 24. Chairman Nunes correctly warned that crises worsen without American leadership and clear strategic goals. Lawmakers must work to properly align budgeting and resourcing with targeted strategies in order to avoid these sorts of international crises. 5 Countering Terrorism Financing Mr. Jamal El-Hindi Deputy Director, Department of the Treasury Financial Crimes Enforcement Network Mr. Jerome Beaumont Deputy Director, Tracfin (French Financial Intelligence) Mr. Frederick Reynolds Former Deputy Director, Department of the Treasury Financial Crimes Enforcement Network Mr. Mike Braun Former Chief of Operations, Drug Enforcement Agency Mr. David Asher Former Senior Advisor, East Asian and Pacific Affairs, Department of State Mr. Yaya Fanusie Former Senior Advisor, National Counterterrorism Center "As Chairman of the House Financial Services Committee, we have already held a halfdozen different hearings on the subject ofterrorist financing and at the appropriate time we look forward to working with our leadership and bringing legislation to help crimp the financial fitelline to terrorism. "-Chairman Hensarling "Tracfin is ready to support any projects about cross-borders, beneficial owners, or any other initiative that could improve our common fight against terrorismfinancing. We are also ready to attend the next forum and ifyou need we should be able to gather French Members ofParliament who would wish to be involved with your Task Force."- Deputy Director Beaumont The Intelligence-Security Forum hosted multiple panels on the subject of countering terrorist group financing. These panelists shared their expert views on how to stave the flow of resources to illicit organizations. Financial intelligence sharing helps law enforcement bridge the gap between terror suspects and larger criminal organizations that provide monetary support. The Treasury Department's Financial Crimes Enforcement Network, Fincen, serves as the Department's Financial Intelligence Unit. Close to 200 million financial records go through Fincen for analysis. Fincen works with hundreds of international financial intelligence units in several countries, and it works with other American law enforcement, such as the FBI and Customs and Border Protection. "Fincen has a wealth ofdata that we are able to analyze and disseminate in the form offinancial intelligence to our law enforcement and intelligence community partners. Reporting by financial institutions results in a rich collection ofhigh value information essential to our ~!forts to disrupt, degrade, and ultimately d~feat al-Qaeda, ISIS, and other terrorist groups. 6 "Fincen collects data under regulations developed subject to public comment. But along with collection, data privacy and data protection are also imperatives for Fincen and other Financial Intelligence Units. The public goal ofusing financial intelligence for anti-money laundering and anti-terrorism is not at odds with the public goals ofdata privacy. When it comes to meeting both these goals, policymakers must continue to support Financial Intelligence Units and their abilities to access and analyze data."- Deputy Director El-Hindi Cyber-securitv I Intelligence General Michael Hayden Former Director, National Security Agency and Central Intelligence Agency General Keith B. Alexander Former Director, National Security Agency Between the two Generals, the Forum heard from 14 consecutive years of National Security Agency leadership- an invaluable session for lawmakers. General Alexander discussed cyber-attacks and the historical context of implementing cyber-warfare between nation-states. For example, in 2007, Estonia fell victim to Russian cyber-attacks after an international disagreement over former Soviet landmarks. Estonia banks online, votes online, and like many Americans, Estonians perform much of their lives online. The Russian attack included a denial of service technique that shut down critical infrastructure networks in Estonia for weeks, causing a national crisis. 7 One year later, in the first time in military history, Russia implemented cyber-tactics in conjunction with kinetic operations in Georgia. When Russia unlawfully invaded, it imposed similar denial of service operations to shut down essential government and critical infrastructure services. General Hayden discussed his 4 principles when addressing cyber-security policy: 1. The majority of cyber-security must be performed by the private sector; 2. The government has a role in the small percentage of attacks that directly affect the government and critical infrastructure; 3. Lawmakers must define this role of government; 4. The government's role must be consistent with American values. General Hayden expressed that many countries, such as Russia, Iran, China, and North Korea, do not view internet freedom in the same manner as the United States, and that when imposing cyber-security policy, America must remain committed to keeping the internet free and accessible to its citizens. China Policy Mr. Dennis C. Shea Vice Chairman, U.S.-China Economic and Security Review Commission Mr. Michael R. Wessel Commissioner, U.S.-China Economic and Security Review Commission "I don't think people appreciate China's double-digit percentage military budget increases. China is modernizing its Navy, its Air Force, and it has the most active cruise and ballistic missile development programs in the world Additionally, it has a very active military-cyber program, as well as a military-space program. "-Vice Chairman Shea "In the mid-2000's, China began to realize the extent ofmilitary and economic assets that were available via cyber-thefi. The cyber-domain has allowed China to acquire meaningful military technology without burdensome research and development. "China recognizes America's reliance on the internet for military, economic, and social purposes. China's interest to challenge the United States comes easiest through promoting cyber-capabilities. These irregular warfare tactics have served as a significant force multiplier for China over the last decade" Commissioner Wessel The U.S.-China Economic and Security Commission serves as an extension of Congress and acts as a comprehensive resource on China policy considerations affecting our government- including military strategy, cyber-security, foreign and domestic investment, currency manipulation, human rights, and trade. Of note, the Commissioners warned the Forum about the close relationship the Chinese government imposes on certain domestic industries. Telecommunications, for example, is a chosen strategic industry in China, and many Chinese domestic companies are state-owned enterprises. Companies based in China do not operate in a private sector that is similar to the private sector in the United States- the line dividing public and private sectors is blurred. Furthermore, there is no divide between the Chinese government and its military. 8 Chinese government involvement in its domestic telecommunications companies poses a problem for the United States when those companies attempt to increase their share in the U.S. market-place- both in the civilian and government sectors. Lawmakers must investigate the problems associated with allowing unapproved and potentially malicious hardware vendors access to markets- especially government markets. Closing Remarks Mr. Rudy Giuliani Former Mayor, New York, New York Mr. Kevin McCarthy House Majority Leader, U.S. House of Representatives "It is simple, we need more strategic direction from the Executive Branch."- Mayor Giuliani "Today, the world is increasingly dangerous. Those who love democracy and those who love freedom- it's America's responsibility to have their back."- Leader McCarthy Mayor Giuliani and Leader McCarthy both reflected on the importance of the issues at hand, and how American leadership remains the single most important and effective foreign policy device in the world. "Ifwe care about freedom, and we care about democracy- it's not given to you. We must work together to achieve both. "-Leader McCarthy 9 Taskforce Recommendations The following recommendations were produced on behalf of the Congressional Taskforce on Terrorism and Unconventional Warfare and do not necessarily represent the views of the Forum participants or panelists. The recommendations are published by Representative Pittenger in his role as Chairman of the Taskforce. Countering Terrorism Financing Recommendation 1: Congress should work with financial institutions to collect and share beneficial ownership information on companies, trusts, and other legal entities that are registered within the United States. The increased transparency as result of this policy change should help enforcement agencies track illicit money laundering operations and prevent the flow of funding to terrorists and terror organizations. Further, Congress should consider additional enhanced data sharing initiatives between the government and private financial institutions to facilitate data analyzation. Recommendation 2: Congress should codify the ability of financial institutions to share customer information with one another for the purposes of tracking illicit behavior that intersects multiple bank accounts and multiple institutions. Facilitating bank-to-bank communication should assist law enforcement's ability to track the flow of dollars to terror organizations. Recommendation 3: Congress should compel foreign governments to better enforce their own terror finance laws. The Financial Action Task Force (FATF) rates countries and their efforts to enforce terror financing laws. FATF, itself, is not an enforcement agency. Congress should consider tying foreign assistance and foreign training programs with international FA TF ratings, ensuring that foreign governments have a distinct incentive to better enforce their own terror finance laws. There must be a method to ensure cooperation. Recommendation 4: Congress should support and reauthorize Section 311 of the Patriot Act, which allows the Treasury Department to take measures against foreign financial institutions that pose an identifiable money laundering threat. Under Section 311, once a financial institution is designated by Treasury as a money laundering concern, Treasury can then impose special measures against the institution, including barring access to U.S. financial institutions. The enforcement of Section 311 in non-complying countries is an effective tool in restricting money transfers through the international financial systems. 10 Recommendation 5: Congress should address the illicit money laundering situation in the Chinese casino territory, Macau. It is estimated that the actual Macau market is six times its officially reported size, being valued approximately $200 billion.' Much of that unreported market revolves around a process referred to as junket gambling. This process is notorious for facilitating illicit dollar transfers for criminal, drug, terror, or other illegal enterprises. The Taskforce recommends that Congress investigate the junket gambling circuit in Macau and possibly impose penalties on casinos that facilitate illegal money transfers. Cybersecurity Recommendation 1: The General Services Administration (GSA) should impose stricter subcontractor security requirements when approving vendors that sell information technology (IT) equipment to the federal government. These standards should be modeled after current Defense Department (DOD) rules. Section 806 of the Fiscal Year 2011 National Defense Authorization Act required the Defense Department to better manage its internal supply chain risks? In turn, DOD imposed contract solicitation rules that require prime contractors to verify and be responsible for the security and supply chain provided by subcontractors. These rules have been updated by the Defense Department as of October 2015.' The Taskforce recommends that GSA consider adopting DOD's rule mechanism that requires prime contractors to assume greater supply chain security responsibilities for subcontractors they utilize. Recommendation 2: Congress should impose a licensing requirement for Chinese state-owned telecommunications companies who wish to expand in the U.S. marketplace. The Chinese govermnent identifies strategic industries. Telecommunications is a chosen strategic industry, and the Chinese government maintains broad control over its state-owned companies. The House Intelligence Committee produced an unclassified report in 2012 detailing the security threats posed by Chinese state-owned telecommunication companies.4 There, House Intelligence recommended that the government avoid contracting with Chinese state-owned telecommunication companies. Additionally, House Intelligence recommended that the Committee on Foreign Investment in the United States (CFIUS) block acquisitions, takeovers, or mergers involving these companies. Echoing the sentiment in this report, the Taskforce recommends that Congress impose a licensing requirement on Chinese state-owned telecommunications companies who wish to expand in the United States. This license should be consistent with the import control authority authorized by the Arms 1 U.S.-China Economic and Security Review Commission 2013 Annual Report, Page 355 2 Public Law 111-383, § 806, lll'h Congress, January?, 2011 3 Defense Federal Acquisition Regulation Supplement: Requirements Relating to Supply Chain Risk (DF ARS Case 2012-D050), Federal Register, October 30, 2015,found at https://www. federalregister.gov/articles/20 15/1 0/30/2015-27 463/defense-federal-acquisition-regulation-supplement req uirem ents-rel ating-to-supply-chain-risk -d fars 4 "Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE." House Permanent Select Committee on Intelligence, October 8, 2012. II Export Control Act' and be imposed to ensure that malicious telecommunication vendors cannot expand their role in the U.S. marketplace. Recommendation 3: The United States and its allies should consider formulating a national counter intrusion cyber-defense strategy. As the Taskforce has witnessed, the United States does not have a uniform strategic response to state sponsored cyber-attacks. The Taskforce recommends that Congress consider: • Imposing penalties on states that sponsor cyber-attacks; • Authorizing counter-intrusions as a response to cyber-attacks; • Incentivizing federal law enforcement to more proactively publicize warrants for suspected state-sponsored hackers. Recommendation 4: The Executive Branch should respect current law that prohibits NASA from engaging in bilateral space-related activities with China. 6 Current law requires Congressional approval or a 30 day advance notification and security certification sent to Congress if the administration wishes to work with China in space. It has been reported that the State Department began a U.S.-China Civil Space Dialogue in October 2015, in direct violation of Congressionally mandated restrictions. 7 The Taskforce recommends that Congress hold the administration accountable for violating current law regarding space relations with China. International Counterterrorism Policy ISIS remains an unsolved problem for this administration. The longer ISIS remains on the battlefield, the more efficient the group's propaganda and recruitment efforts become. This leads to a proliferation of!SIS related attacks, similar to the attacks in Paris and San Bernardino. The Taskforce believes that if it is truly the administration's policy to degrade and defeat ISIS, 8 then it should take appropriate steps to achieve the stated goal. To date, the United States has yet to promote a serious counter-ISIS strategy that attempts to "defeat" the group. To the contrary, news reports only indicate additional terrorist attacks arOLmd the world and ISIS's ability to expand to parts of Northern Africa. This administration has relied largely on precision airstrike operations to target ISIS. America has led significant bombing campaigns that have resulted in the destruction of meaningful targets, however these attacks have not demonstrated any significant strategic gains towards actually defeating the organization. 5 22 U.S. C.§ 2778 (a)(!) 6 FY15 Commerce, Justice, and Science House Report (H. Rep!. 113-448, Page 89, Section 552);included in FY15 Omnibus Appropriations Bill (H.R.83; Public Law No: 113-235) 7 "Muted Response fi:om Critics as State Department Prepares for Space Talks with China." Space Policy Online, August 3, 2015, found at http://www .spaccpolicyonline.corn/news/muted-response-tl·om -critics-as-state-department pre pares-for-space-talks-with-china 8 2015 National Security Strategy, Page 2 12 In December 2015, the President announced that the United States and its allies have conducted approximately 9,000 airstrikes on ISIS targets. 9 The President indicated that the United States is hitting ISIS 10 "harder than ever. " However, it is important to reflect on what we have to show for it. For the past year and a half, our Defense Department has consistently estimated that ISIS forces remain 11 between 20,000 and 30,000 soldiers - indicating that airstrikes alone have not impacted the number of soldiers on the battlefield. Additionally, this administration has done little to undermine or disrupt ISIS's headquarter operations in Ar Raqqa. This is largely because it appears to be difficult to expand an airstrike-only policy into Raqqa due to the dense civilian population and high probability of collateral damage. 12 ISIS compounds are firmly entrenched in civilian areas, which restricts American bombardment abilities. In September 2015, the Chairman ofthe Joint Chiefs of Staff, General Dempsey, referred to our current airstrike strategy to defeat ISIS as tactically stalemated. 13 Further, in July 2015, Army Chief of Staff, General Odierno, stated that he believes ISIS will fight for 10 to 20 years if they are not otherwise promptly removed from the battlefield. 14 As recently as November 2015, U.S. Air Force Secretary Deborah Lee James commented on how air power alone cannot accomplish the strategic goal of defeating ISIS: "Air power is extremely important. It can do a lot but it can't do everything. [ ... ]Ultimately, it cannot occupy territory and very importantly it cannot govern territory.[ ... ] This is where we need 15 to have boots on the ground. We do need to have ground forces in this campaign. " Defense Secretary Carter has echoed that the United States is currently not doing enough to defeat ISIS: "But if you say, is it enough [our current strategy]? I don't think it's enough. I think we're looking to do more. But the fundamental strategy in Iraq and Syria for dealing with ISIL and dealing a 16 lasting defeat to ISIL is to identify then train, equip, and enable local forces that keep the peace. " 9 "Obama: ISIS Strategy 'moving forward with great sense of urgency." CNN, December 14, 2015,found at http:/I www. cnn. co m/20 15112/ 14/po lilies/ o bam a-pentagon-isis-strategy I 10 !d. 11 "lSlS can 'muster' between 20,000 and 31,500 fighters, CIA says.'' CNN, September 12, 2014,found at http://www.cnn.com/2014/09/11/world/meast/isis-syria-iraq/; see also "ISIS By the Numbers: Foreign Fighter Total Keeps Growing." NBC News, February 28, 2015,found at http://www.nbcnews.com/storyline/isiswterror/isisw numbers-foreign-fighter-total-keeps-growing-n314731; see also "Thousands Enter Syria to Join ISIS Despite Global Efforts." New York Times, September 26, 2015,found at http:/I www. nytim es. co m/20 15/09/2 7/worl d/middleeastltho us an ds-enter-syria-to-join-isi s-d esp ite- global-efforts. html 12 "Strikes on Raqqa in Syria Lead to More Questions Than Results." New York Times, November 17, 2015,found at http://www .n ytim es. corn/20 15 I II I 18/worl d/mi ddl eeastl strikes-on -rag qa- in -syria -I ead-to-more-questions-than results.html 13 "Sources Detail Skewed Reports On How The U.S. Is Doing Against ISIS.B NPR, September 18, 2015,found at http://www.npr.org/sections/thetwo-way /2015/09/16/ 440969194/sources-detail-skewed -reports-on-how-the-n-s-is doing-against-isis 14 "Odierno: ISIS Fight Will Last' 10 To 20 Years."' Defense News, July 17, 2015,found at http://www .defensenews.com/story/defense/20 15/07/17 /odierno-isis-fight-last-1 0-20-years/3 0295949/ 15 "USAF Secretary: War on IS Needs 'Boots on Ground."' Defense News, November 10, 2015, found at http://www .defensenews.com/story/defense/20 15/11/1 0/usaf-secretary-war-needs-boots-ground/75527160/ 16 "Remarks on 'Strategic and Operational Innovation at a Time of Transition and Turbulence' at Reagan Defense Forum.'' Secretary of Defense Ash Carter, U.S. Department of Defense, November 7, 20l5,found at http://www.defense.gov/N ews/News-Transcripts/Transcript-View/ Article/62814 7/remarks-on-strategic-and 13 Unfortunately, Secretary Carter's aforementioned statement came a month after it was widely reported that the United States would be scaling back its Syria rebel training program. 17 This drawdown was a reflection of the program's overall failure, which culminated in General Lloyd Austin testifying before the Senate Armed Services Committee that, as of September 2015, the U.S. had only "4 or 5" active rebels in its training program. 18 Recommendation 1: The United States should ensure the policies it implements reflect the country's stated strategic goals. As stated previously in this report, history is not kind to nation-states that do not reconcile policy and resource allocation with stated strategic goals. The Taskforce believes the administration must act urgently to review its current policies to ensure they align with strategic goals they are willing to achieve. The United States will not be able to effectively defeat ISIS if its policies do not match its strategic goals. Recommendation 2: Congress should create an independent commission to review the effectiveness of conducting airstrikes against terror organizations without an accompanied ground campaign. As stated by Air Force Secretary James, airstrikes alone, while effective, cannot substitute for a comprehensive strategy to defeat a terrorist organization. The United States, however, has implemented this strategy repeatedly for decades. Many Presidents, including Reagan, Clinton, and Bush 43 have utilized airstrike-only policies in certain circumstances to address terrorist organizations. However, no President has relied on an airstrike-only policy as extensively as the Obama administration, and few would have anticipated that this airstrike implementation would have lasted as long as it has without the accompaniment of ground troops. The Taskforce agrees that it is important to posture against enemies of the United States, but cautions that indefinite bombing campaigns should not be employed as a substitute for a strategy to defeat a terrorist organization. Airstrikes serve as an important supplement, but cannot be confused with an affirmative strategy. As previously mentioned, the United States and coalition forces have conducted over 9,000 airstrikes on ISIS. Yet, it appears the battlefield impact has been minimal, and many disagree as to the effectiveness of airstrikes without troop engagement. With that in mind, the Taskforce urges Congress to consider tasking a commission to report on the benefits and challenges of restricted airstrike-only campaigns against terrorist organizations without the presence of a ground campaign. Few predicted that the United States would employ such heavy usage of this strategy, and it is important to quantifY what benefits exist to such a strategy. 17 "Pentagon to Scale Back Troubled Syria Rebel Training Program." Wall Street Journal, October 9, 2015, found at http://www. wsj .com/articles/pentagon -plans-new-approach-on-syria-rebel-training -14443 943 85 18 "You Can Literally Count the Number ofU.S.~Trained Syrians Fighting ISIS on One Hand." US. News, September 16, 2015,Jound at http://www. usnews.com/news/articles/2015/09/16/genera1-on1y-4-or-5-us-trained syri an-fighters-operating-against-isis 14 Recommendation 3: The United States should develop a strategy to effectively deal with Russia and its placement of air defense systems within Syria. It was reported in November 2015 that Russia delivered and deployed air defense systems into Syria. 19 Strategically, the presence of Russian air defense systems in Syria significantly challenges American regional initiatives. The Taskforce believes the United States must create and implement a strategy to diminish Russia's regional presence and stop the flow of Russian military equipment into Syria. ## 19 "Russia deploys cutting-edge SAOO air defense system to Syrian base after Su-24 downing." RTNews, November 26, 2015,found at https://www.rt.com/news/323596-s400-russia-syria-airbase-turkey/ 15 ' .. :.•:•,·.• ., .. :.' ...·.,,: .... -:-.·· ,,•• Appendix I U.S.-China Economic and Security Review Commission 2015 Recommendations COMPREHENSIVE LIST OF THE COMMISSION'S RECOMMENDATIONS Chapter 1: U.S.·China Economic and Trade Relations Section 2: Foreign Investment Climate in China The Commission recommends: 1. Congress assess the ability of, and if necessary amend, existing U.S. trade laws to address China's industriaf policies, abusive legal or administrative processes, and discriminatory treatment of foreign investors, and to determine the consistency of these practices with China's World Trade Organization commitments. 2. Congress consider legislation requiring the President to submit a request to Congress for approval before any change occurs, I' either for the country as a whole or for individual sectors or _j entities, in China's status as a non-market economy. Under such legislation, any change to the designation of China could not proceed without the consent of both Houses of Congress. 3. Congress consider legislation conditioning the provision of mar· ket access to Chinese investors in the United States on a recip· rocal, sector-by-sector basis to provide a level playing field for U.S. investors in China. 4. Congress direct U.S. antitrust enforcement agencies to conduct an analysis and legal assessment of alleged anticompetitive be· havior by Chinese antitrust enforcers, and report in full on en forcement activities, 5. Congress expand the guidelines for consultation and trans· parency relating to trade negotiations covered by Trade Pro· motion Authority to include negotiations on a Bilateral Invest· ment Treaty between the United States and China. 6. Congress require the Administration to provide a comprehen sive, publicly-available assessment of Chinese foreign direct in· vestments in the United States prior to completion of negotia tions on a Bilateral Investment Treaty. This assessment should include an identification of the nature of investments, whether investments received support of any kind from the Chinese government and at which level (national) provincial 1 or munic ipal), and the sector in which the investment was made. 7. Congress urge the U.S. Trade Representative to initiate con· sultations with Ghina's. Ministry of Commerce to identify the extent to which China's policy regarding subsidies and other incentives for purchases of domestically-produced new energy vehicles may violate its World Trade Organization commit ments and what steps should be taken to address any incon sistencies with those commitments. (56;)) ,------ 564 Section 3: China's State-Led Market Reform and Competitive· ness Agenda The Commission reco111mends~ 8. Congress direct the U.S. Government Accountability Office to prepare a report that analyzes U.S. exposure to China's finan cial sector, the progress of China's financial sector reforms, and the effect of China's financial sector reforms on the U.S. and global financial systems, and identifies the policies the U.S. government is adopting to protect U.S. interests in light of this changing environment. 9. Congress urge the U.S. Department of Commerce to undertake a comprehensive review and prepare a report on China's Made in China 2025 and Internet Plus initiatives, including their forced localization of manufacturing and research and develop ment requirements, to determine their potential impact on do mestic U.S. production and market access for U.S. firms. 10. Congress direct the U.S. Environmental Protection Agency, U.S. Department of Energy, and U.S. Department of Commerce to jointly prepare a report that outlines China's stated targets to address pollution and climate change, and evaluates wheth· er the Chinese government has allocated sufficient resources (including expenditures) to meet those commitments. Section 4: Commercial Cyber Espionage and Barriers to Dig ital Trade in China The Commission recommends: 11. Congress assess the coverage of U.S. law to determine whether U.S.-based Gompaxties that have been hacked should be allowed to engage in counterintrusions for the purpose of recovering> erasing, or altering stolen data in offending computer net works. In addition, Congress should study the feasibility of a foreign intelligence cyber court to hear evidence from U.S. vic· tirns of cyber attacks and decide whether the U.S. government might undertake counterintrusions on a victim's behalf. 12. Congress require the Administration to prepare an annual classified report on foreign government-sponsored cyber attacks against all Federal Government agencies, including but not limited to an assessment of the damage and the affected agen cies) plans to secure their networks against further attacks. 13. Congress consider legislation amending the Federal Informa tion Security Modernization Act of 2014 to require an annual review by the U.S. Department of Homeland Security of the steps taken by all federal agencies to ensure that adequate sys tems are in place to protect cyber assets. 14. Congress pass legislation to require the Securities and Ex change Commission (SEC) to make clear to publicly traded companies and their investors the ~~ircumstances under which the theft of intellectual property through a computer network intrusion may be a material fact that might affect a company's revenues and should therefore be required to be• disclosed to the SEC. ;;,'. 565 15. Congress evaluate exis(ing consumer right-to-know Jaws to de termine whether a cloud-based computing company has an af· firmative duty to identify the physical location of its cloud based assets. Chapter 2: Security and Foreign Policy Issues Involving China Section 2: China's Space and Counterspace Programs The Commission recommends: 16. Congress continue to support the U.S. Department of Defense's efforts to reduce the vulnerability of U.S. space assets through cost-effective solutions, such as the development of smaller and more distributed satellites, hardened satellite communications, and non·space intelligence, surveillance, and reconnaissance assets such as unmanned aerial vehicles. 17. Congress direct the U.S. Department of Defense, U.S. Air Force, and relevant agencies within the U.S. Intelligence Com munity to jointly prepare a classified report that performs a net assessment of U.S. and Chinese counterspace capabilities. The report should include a strategic plan for deterring, with active and passive systems, strikes against U.S, assets in light of other countries' rapid advancements in kinetic and non-ki netic counterspace technology. ' ' 18. Congress direct appropriate-jurisdictional entities to undertake a review of (1) the classification of satellites and related arti cles on the U.S. Munitions List under the International Traf ficking in Arms Regulations and (2) the prohibitions on exports of Commerce Control List satellites and related technologies to China under the Export Administration Regulations, in order to determine which systems and technologies China is likely to be able to obtain on the open market regard.less of U.S. restric tions and which are critical technologies that merit continued U.S. protection. 19. Congress allocate additional funds to the Director of National Intelligence Open Source Center for the translation and anal ysis of Chinese-language technical and military writings, in order to deepen U.S. understanding of China's defense strut· egy, particularly related to space. Section 3: China's Offensive Missile Forces The Commission recommends: 20. Congress direct the U.S. Department of Defense to provide an unclassified estimate of the People's Liberation Army Second Artillery !<'orce's inventory of missiles and launchers, by type, in future itenltions of its Annual Report to Congress: Military and Security Deve/opmentB Involving !he People's Republic o/ China, as included prev;iously but suspended following the 2010 edition. . .·: ,.·· .. ·····' ,· :.. .:· .... ::.:-.··. ;-.. :-...... 566 21. Congress direct the U.S, Department of Defense to prepare a rep01•t on the potential benefits and costs of incorporating ground-launched short-, ·medium·, and intermediate-range con· ventional cruise and ballistic missile systems into the United States' defensive force structure in the Asia Pacific, in order to explore how such systems might help the U.S, military sustain a cost-effective deterrence posture. 22, Congress continue to support initiatives to harden U.S. bases in the Asia Pacific, including the Pacific Airpower Resiliency Initiative, in order to increase the costliness and uncertainty of conventional ballistic and cruise missile strikes against these faci1ities, and thereby dis~incentivize a first strike and increase regional stability. 23. Congress continue to support "next·generation'' missile defense initiatives such as directed energy and rail gun technologies, and require the U.S. Department of Defense to report to com mittees of jurisdiction on the status of current component sourcing plans for the development and production of directed energy weapons. Chapter 3: China and the World Section 1: China and Central Asia The Commission recommends: 24, Congress request classified briefings from the U.S, Intelligence Community on the nature of UB.-China cooperation on counterterrorism to ensure the U.S, government is not inad vertently supporting Chi!lese counterterror policies and tactics that undermine h11man fights. 25, Congress direct the U.S, Government Accountability Offlce to prepare a report assessing the U.S, New Silk Road policy. This report should evaluate the New Silk Road's strengths and weaknesses and its current status and f\1ture prospects for meeting U.S, policy objectives in Central Asia, This report should investigate how U.S. policy toward Central Asia inter sects and interacts with U.S. policy toward China more broad ly, and how the U.S, and Chinese Silk Road initiatives interact in Central Asia. 26. Members of Congress and their staffs consider traveling to Central Asia, and, when doing so, engage with U.S, business community and nongovernmental organizations to discuss ways of improving human rights, rule of law 1 envjronmental protec t1on, and business environment. Section 2: China and Southeast Asia The Commission recommends: 27, Congress direct the U.S, Government Accountability Office to prepare a report a:;sessing the effectiveness of recent U.S. ef forts lo enhance lhe maritime security capabilities of allies and partners in Southeast Asia and identifying the remaining chal· 1enges and opportunities. .• :' -~ ' ...... · .... . :., 567 28. Congress urge the Administration to enhance its support for regional information sharing institutions focused on maritime security in Southeast Asia. 29. Congress direct the U.S. Government Accountability Office to expand its August 2015 report Southeast Asia: Trends in U.S. and Chinese Economic Engagement to evaluate whether Chi nese government funded investment and assistance projects in Southeast Asia negatively affect U.S.-fimded projects in South east Asia. Section 3: Taiwan The Commission recommends: 30. Congress urge the Administration to make available to Taiwan, consistent with the 'raiwan Relations Act, defense articles and services required to address the continuing shift in the cross~ Strait military balance toward China. 31. Congress direct the Administration to invite Taiwan to partici pate at least as an observer at U.S.-led bilateral and multilat eral military and security exercises, including future Rim of the Pacific lRIMPAC) and Cyber Storm exercises. 32, Congress encourage the Administration to increase its public support of Taiwan's participation in international organiza tions,* which would help Taiwan expand its status and legit imacy in the international community. 33. Congress require the U.S. Department of State, the U.S. De partment of Defense, and the U.S. Department of Commerce to jointly prepare a classified report on Taiwan's role in the U.S. strategy in Asia. The report should include an overview of Tai wan's current role in the strategy; U.S.-Taiwan defense co operation and a description of all joint programs; and opportu nitjes for Taiwan's inclusion in U.S. Asia strategy. Section 4: Hong Kong The Commission recommends: 34. Members of Congress, when visiting mainland China, also visit Hong Kong, and that Congress encomage senior Administra· tion oflicials, including the secretaries of State, Defcmse, and Commerce, to make visits to Hong Kong part of their travel. 35. Congress sustain the language in the Department of State, Foreign Operations, and Related Programs Appropriations Act of 2016 reauthorizing the repoxt requirement under the U.S.· Hong Kong Policy Act of 1992 supporting human rights and de mocracy in accordance with the Sino~Brit1sh ,Joint Declaration. 36. Congress urge the U.S. Department of State to increase its public diplomacy efforts in Hong Kong in support of press free dom, media Jndep~wdence~ ·and academic freedom. ~ 'rhcs8 Drgnnizatiun>; may h\dude: the Unn,,d N<~tion:-1 !o~nml<~work Convention Ml Climate ChufJge., lnW!Tii>UOn!~l Alomi~.· r;nafgy AgHH."Y, Jntt'rnationnl Ci\'1) A\'llltHln Orguni~ation, lnt~l'~ nl"lliilfl!tl Maritime Otf{ 568 37. Congress engage parliamentarians from the United Kingdom in an interparliamentary review of China's adherence to the Basic Law since the han~over of Hong Kong to China in 1997, with specific attention to rule of law, progress in achieving uni versal suffrage, and press freedom. _i t.' •~ • . .'., .', •••• :...-, •• :<..• ·.;.,.·,·,·, ..• ,. ·.· ; .. · .'. ···:,. :, .. :. ·:•.• ···-··.·. ; ... Appendix II PARLIAMENT OF ALBANIA THE SPEAKER T1rana, on 04.11.2015 Han. Robert Pittenger - Chairman Congressional Task Force on-- Terrorism and Unconventional Warfare Dear Chairman Pittenger, @«q Ze4-:J It was an honor to be invited and participate In the Parliamentary Intelligence-Security Forum organized so excellently by you in De last week. The elaborated presentations and the stirring debates on Important themes that threaten our security, priorities In the fight against terrorism and Its finances, oversl&ht of our democratic institutions and the role of parliaments were a good opportunity to exchange views and Ideas on our national and common efforts to deal with these concerns. 1 guaranty you that Albania will continue to be the strongest and most loyal ally of United States in the Balkans and will increase our efforts In dealing with these Issues, as well as enhancing our national capacities and strengthen relationship and cooperation w~h US speclaliled agencies to prevent and fight terrorism, extremism and Its resources. As we discussed in our meeting, I am personally committed to organize and host in Albania the next round of this esteemed Forum, to bring together high representatives from Parliaments ln the region, United States and other partner countries of Euro-Atlantlc area and share our experiences on security Issues of common concern. This event would be also an excellent opportunity to have a areat friend like you in Albania and to enjoy the flavors of a small but ancient Balkan and Mediterranean country. Expressing to you the assurance of my highest esteem, I remain. Respectfully, if, IV - r I ·.; ... REPUBLIC OF CYPRUS HOUSE OF REPRESENTATIVES • Nicosia, 16 December• 2015 The Hon. Robarl Pittinger, Member of the US Congress, Washington, D. C.. 1?&~ {e;~jK.. Thank you for your request to provide input for the ;.tr1 Parliamentary Intelligence-Security Forum, which took place In Washington D. C. last October. Allow me to congratulate you once more for the smooth organization of the conference, which I found of utmost interest. I would like to once mora share my opinion that, as regards internal and by extension international security, a more general cooperation plan and schema _, should be developed, in which small countries would be able to participate. This is especially due to the fact that, while their resources are limited, they often have increased needs for security, in particular as a result of their critical location. Alternative ways to overcome this lack of ways, means and know-how should be explored in a collective way, mainly because of the interconnection between each oountry's security and stability, as well as due to the fact that the now multi-faceted threats to international security are oommon to us all. Wishing you evary success in your endeavours, parlicuiarly in relation to the Parliamentary Intelligence-Security Forum, let me express, dear Colleague, my highest consideration and wish you a vary Merry Festive Season and a Happy New Year. Dametris Syl/ouris, MP, Deputy Chairman of the House Standing Committee on Institutions, Merit and the Commissioner for Administration (Ombudsman). STIST 1402 Nicosia, Cyprus~ iel.: +357~22407304 ·Fax: +357~22668611 • EmaH: !ntemationaHelations@parllamentcy 'N'NW.parllamen.tm ROMA:NIA PRESIDENT Congressman Robert PITTENGER Chairman of the Congressional Taskforce on Terrorism and Unconventional Warfare U.S. House of Representatives Bucharest, dN_ovember 20,15 t;3-<4-l 1 v t> Dear Mr. Chairman, I would like to thank you for the excellent organization of the Parliamentary Security-Intelligence Forum and the extremely useful discussions regarding the policies in this area. The current geopolitical context, the dynamic of the events on the old European continent, as well as the danger of growing terrorist threats are most important concerns for our citizens. As a consequence, they represent crucial challenges for us, the representatives of people, accountable and responsible for our electorate. I From this perspective, the Parliamentary Security- Intelligence Forum represented a framework to analyze the optimal transfer of know-how from the states with expertise in this domain to less I experienced countries in fighting major threats. For the Romanian delegation, it was good chance to reiterate, In the discussions with representatives of the guest parliaments and with congressmen serving on several Select Committees, the determination to continue to bring a substantial contribution to the stability in our I region and to the general effort on combating terrorism. I Romania is a stability pillar in a region in turmoil and has a unique geostrategic position in the I Black Sea area. In this regard, we would like to highlight the involvement of our country, a strategic partner of the U.S., in securing the Euro-Atlantic area, particularly in highly sensitive fields, such as ! the cyber security. ! ! Please allow me, dear Mr. Chairman, to congratulate you once again for organizing the third edition ! of this useful thematic forum and to express our openness toward the future collaboration on such issues of great interest for all of us. Looking forward to furthering the exchange of views on fighting against the current threats to the I democratic values, I assure you, dear Mr. Chairman, of my highest consideration. f ' "-.)f '\ k'-. ., 'f( / i } I ; ' I l ! Dr, Fritz Felgentreu ~!iigll~~d (k:-: l'lP1li.'-!":ht•n lhit.d~·~;!,.,g ·.,, Dr. Fril.z FAlgflllfnm MdB, Pia b. dfJr R!.".pohlik 1, 11011 Berlin The Honorable Robert Pittenger Member of Congress Honse of Representatives 224 Cannon House Office Building Washington, DC 20515 The United States of America Berlin, November 20, 2015 Parliamentary Intelligence-Security Forum 2015 Dr. Fritz Felgentreu MdB Platz der Republik 1 Dear Robert, 11011 Berlin Germany Btlro: Unter den Linden 50 Thank you for your letter, your hospitality, the vital debate as Raum: 2.133 well as your outstanding support during the Parliamentary Telefon: +49 30 227-77847 Intelligence-Security Forum 2015 in Washington, DC. Fax: +49 30 227-76847 fritz .. [email protected] The challenges, which we discussed during the forum, will be on the transatlantic agenda for many years to come. The recent Wahlkreisbiiro Ncukolln: attacks in Paris demonstrate that it is significant for the western Lipschitzallee 70 12353 Berlin democracies to develop and implement common answers to Telefon: +49 30 56 82 1111 these challenges within our community of shared values. Fax: +49 30 56 82 13 02 I am very much looking forward to our future meetings and neukoelln@fri tz~ felgentreu. de cooperation. Sincerely, Fritz Felgentreu ..... ···:·: .. · . Fonda, Clark From: Sent: To: Cc: Subject: Dear Mr Fonda Sorry for my late response and thank you and Congressman Pittenger for your concern. After difficult and busy days, I take some time to indicate the following : Please inform Mr Pittenger that My Director and I are ready to support any projects about crossborders, beneficial owners or any other initiative that could improve our common fight against terrorism financing. We are also ready to attend the next forum and if you rieed we should be able to gather French MPs who will probably be more involved in TF. Best regards Jerome Beaumont French Financial intelligence Unit TRACFIN ',,': •,, ,' .,·, ;:'.:.· · ·~· ...... PERMANENT MISSf()N OF R.OMANLA •'!:.t<,f'f.{lJ(;ilft., 'i' 11 1 ,: ·:,.. 1,1 lo the h"'tematJonai Org.anizaUons w1 V\:er~n::a ~~'~u "'"·'t"'~' fht".• Htmorahle Robc~n P1t1tngt:•r c·hairrmm ClH\gr'l:: ...;.-,i~mal l'.:bk!I.J.n:r.: l)/1 L:'rf\H\.:;m ~.nd l'n\.!nll\'l:flli(Hil:ll Warr{lr-: C ()n~re':-.'--; ,tt'tbc l :n ih.~d ..:.:;Ht:<,, I fo:1sc :>f R;;pn:~cntati\e::. \\ :;.~h)n~\.<)11. f)('. ! \-\Ot.dd !ike Hl thank )tltJ ~~)r the kncr l~lH\w.ing !!k Par\iiH'I1t'nt.u~ lm.:l!lg....:rh.:c~St:curil) h'trurn tha1 took pl;:kl.' l.m 27~28 ('Jct\•bL·r 20!5 in W.:ts.hlng'h.~n. f).l. and \\hi~h l had the p\c·:·1surt lo ai'lt':JtJ up,)n your kind invitation. lndc0d. r.h~.: F'orurn pr,J\ick:d >Hl .:.\Ct::·licm phH1iJrm w db~o:u% h.Jpka! natiunat ~e.:udt) and imdl.ig~nc\:J (ltllil'~ );.,su~::.. a~ \\·;;I! iL'> ln id~ntit> ...:fll:.'l:tiv.; \;,ays h.', <;.:1)L1HlCl' ltrrori~m and;;) her· \hn.::~ll\;. :\t thr:: ..,~tm<.:: iitrte, thi:! hm.nn hig.htig;tltvd 1H1c~ ag. ('{11Jil\l'l"lng t~rT \\ is.hin~ .\ Vnur~:'si qbJU.'h. / . ( ri;,Ii.ln l~Hal.C 1 ~ : , ,,.· ,'-' ,' RO!'vL.\NiA PRESIDENT Congressman Robert PITTENGER Chairman of the Congressional Taskforce on Terrorism and Unconventional Warfare U.S. House of Representatives Bucharest, o?'N,()VeJllber 29,15 1!34h)vt> Dear Mr. Chairman, I would like to thank you for the excellent organization of the Parliamentary Security-Intelligence Forum and the extremely useful discussions regarding the policies in this area. The current geopolitical context, the dynamic of the events on the old European continent, as well as the danger of growing terrorist threats are most important concerns for our citizens. As a consequence, they represent crucial challenges for us, the representatives of people, accountable and responsible for our electorate. From this perspective, the Parliamentary Security - Intelligence Forum represented a framework to analyze the optimal transfer of know-how from the states with expertise in this domain to less experienced countries in fighting major threats. For the Romanian delegation, it was good chance to reiterate, in the discussions with representatives of the guest parliaments and with congressmen serving on several Select Committees, the determination to continue to bring a substantial contribution to the stability in our region and to the general effort on combating terrorism. Romania is a stability pillar in a region in turmoil and has a unique geostrategic position in the Black Sea area. In this regard, we would like to highlight the involvement of our country, a strategic partner of the U.S., in securing the Euro-Atlantic area, particularly in highly sensitive fields, such as the cyber security. Please allow me, dear Mr. Chairman, to congratulate you once again for organizing the third edition of this useful thematic forum and to express our openness toward the future collaboration on such issues of great interest for all of us. Looking forward to furthering the exchange of views on fighting against the current threats to the democratic values, I assure you, dear Mr. Chairman, of my highest consideration . .:::;;_"' « H' QJ I I <·--- n ' <;' r\ '·· r -:_~* \, " ·./).,..~__ _., ... \ ~~ ..... --"- ~ Tim HoNOMllLEROBliR'!'M.l'!'ITilNGF.l\ FOI\ MORE L~rol\lltA110N1 Ch~irm~ll (202)225-1976 CONGRESSIONAL TASKFORCE ON TERRORISM AND UNCONVENTIONAL WARFARE 8th Parliamentary Intelligence Security Forum _, Riga, Latvia June 19, 2017 CIL:onga·rgz of tbr llnitrb iPtlltcs mithtuii!IIUIOI1, ill( 2(~515 Dear Colleague: Thank you for your continued interest in our Parliamentary Intelligence Security Jlorums. This past hme, we recently hosted our 8111 forum in Riga, Latvia. Over the past several years, these forums have reached over 60 countries and over 650 Members of Parliament. The Latvian Parliament co-hosted our event, and we extend out' sincerest thank you for their hard work and dedication. Because of their input, our June forum in Riga provided an exceptional opportunity for collaboration among international govennnent leaders. During the event, participants discussed a val'iety of international security top.ics, including terrorist group financing, combatting Russian and Chinese counterintelligence, information sharing, and developing a successful cybersecurity defense strategy. Panelists at this event included several American and European J security experts, financial institution representatives, and senior federal government enforcement officials. We were fortunate to have 28 countries attend our event in Riga. Enclosed you will find an official forum agenda, a list of panelists, a list of foreign patticipant:s, and an official summary of events. Thank you for yo Lit' continued interest in om· forum, and we look forward to working with you in the future. Sincerely, Rabel'! Pittenger Member of Congress Chainuan, Congressional Taskforce on Terrorism And Unconventional Warfare ------ gtit Parliamentary Intelligence Security Forum 19 June 2017 Baltic Hall Pad iament of the Republic of Latvia Jekaba Street 6/8, Riga 8:30 Ci'IECK-IN 9:00 WELCOME SPEECHES H,E, Ms Inilra Miirniece, Speaker ofthe Parliament ofthe Republic ofLatvia H.E. Ms Nancy Bikoff Pettit, Ambassador ofthe United States of America to the Republic of Latvia Mr Pawel Chm·qey, Undel'seoretary of Congressman Pittenger with Latvian State at the Ministry of Economic Parliament Co-hosts, Ms. Solvita Development of the Republic of Poland AboltiQa and Mr. Ainars Latkovskis Ms Solvita Aboltiya, Chair, Saeima National Security Committee Mr Robe1·t Pittenger, Member of Congress, Chairman of the Congt•essional Taskforce on Te!'fol'ism and Unconventional Warfare PANEL I 9:30-10:30 Mr Marl< Hanson, Director, Cyber and Emerging Technologies Section, Financial Crimes Enforcement Network, U.S. Department of the Treasury Mr Michael Shanahan, Assistant Legal Attache, U.S. Embassy Tallinn Mr Bryan Cal'I'Oll, Foreign Service Office!', U.S. Embassy Riga PANEL II 10:30-11:45 BANK AND FINANCIAL SECURITY Mr Fredel'ick Reynolds, Global Head of Financial Crimes, Bat·clays Mr Willlam Fox, Managing Director, Global Financial Crimes Compliance, Bank of America Mr Chal'les Bretz, Directo:· of Payment Risk, Financial Services Information and Analysis Center 11:45-12:50 LUNCH Hosted by Mt· Ainars Latlmvslds, Chairman ofthe Defense, Internal Affairs and Conuption Prevention Committee of the Saeima Guesr Room and White Room, Jekabct Street! 1 12:50 FAMILY PHOTO PlenmJ' Chamber, Jekaba Stt·eet 11 PANEL Ill 13:00·-14:00 HOSTILE USE OF INFORMATION Mt· J!inis Sill'ts, Director ofNATO StratCom COE Mt• Vllt'iS Telvi\ns, Deputy Manager at Latvian Cybersecurity Unit Cert.lv Mr Stefan Meister, Director, Center tbr Central and Eastem Europe, Russia, and Cetttral Asia, German Council on Foreign Relations PANEL IV 14:00-15:15 CYBERSECURITY AND FOREfGN INVESTMENT Mr J.R. Helmig, Chief Analytics Officer, SAS Federal Mr Andrew Davenport, Chief Operating Officer, RWR Advisory Group Mr Rene Summct•, Dit·ector, Govemment and Industry Relations, Ericsson Mt• MaiJss D. Kulmiuis, Fonner President, American Chamber of Commerce in Latvia 15:15-15:30 COFFJ!,E BREAK PANELV 15:30-16:45 INTERNATIONAL ENFORCEMENT Ms Maija Trcija, Director of Compliance Control Department, Latvian Finance and Capital Market Commission Mt• Joseph Humlre, Executive Director, Center for a Secure Fl'ee Society Mt• Lawrie Elder, Principal, .Intelligence & Investigntion Practice, SAS Corporation Mt· David Murray, Vice President fm· Product Development and Services, Financial Integrity Network CLOSING REMARKS 18:00-20:00 RJ!,CEPTION Attendance list- gth Parliamentary Intelligence Security Forum Members of Parliament Arta Dade, Albania Namik Dokle, Albania Grubesic Zeljl Subject: 8'" Parliamentary Intelligence Security Forum: 1. Congressman Pittenger joined officials from 30 different countries to discuss national security challenges facing both governments and public sectors, alike. Discussions at this forum focused on terror financing, cybersecurlty, Information sharing, and countering Russian and Chinese counterintelligence. The panels were comprised U.S. and international experts who discussed the challenges that financial institutions and governments may face in preventing terror finance, as well as cybersecurity and counterintelligence threats posed by adversaries. The day began with remarks from European Officials and Congressman Pittenger. Congressman Pittenger with Ksenia Ms. ln~ra MOrn ieee, The Speaker of the Parliament of Svetlova (Israel), May El Batran Latvia, started her remarks with the current challenges (Egypt), and Davide Colella (Vatican) that Latvia and Eastern Europe face. Cybersecurlty and Russian propaganda were mentioned as a threat to democratically established governments In the region, specifically by the Russian government's efforts to undermine the pe.ople's confidence In their elected government. Next, Ms. Nancy Bikoff Pettit, the Ambassador of the United States to Latvia commented on the renewed vulnerability that their countries and the U.S. share because of ramped up cyber-attacks by state and non-state actors. Ambassador Pettit stated that the high level of connectivity between nations raises threats such as attacks on a country's power grid or private business. Cybercrime costs businesses an estimated $400 billion per year. Mr. Pawel Chor~ty, the Undersecretary of State at the Ministry of Economic Development of Poland was the next panelist to speak. He focused on a few specific policies that Poland has put In place dealing with the discussed Issues, which he stated have been successful. The 2016 Anti-Terror Act created a foundation for close cooperation between law enforcement entitles, making It easier for Poland to have large international events without fearing for security, such as the NATO Sum, mit Congressman Pittenger also joined the panel with a message of cooperation between countries, stating that In the fight against terror we are only as strong as our weakest link. He discussed how the tools of unconventional and cyberwarfare are as important if not more important than the tools of kinetic warfare. 2. The forums first panel consisted of law enforcement and government officials tasked with cybersecurity issues. Mark Hanson, the head of Cyber and Emerging Technologies at Fincen, spoke about an issue that Is paramount to the terrorism and illicit finance policy sphere- bitcoin and virtual currency. He stated the importance of maintaining agility with emerging technologies, such as virtual currencies and money transfers. Bitcoln's structure and prominence was also a focus of the discussion, noting that there are L3 Billion transactions on virtual currencies per day. Brian Carroll, a Foreign Service Officer at the LJ.S. Embassy In Riga, gave the State Department's perspective on cybersecurity. The State Department uses a holistic approach to ensure that the internet is open and secure enough to be the basis tor all modem diplomatic efforts, Mr. Carroll mentioned four points that the State Department was concerned with: International Security1 a multi-state stakeholder in the internet (the concept that the government of a single state should not have total control over their country's internetL using the internet as an engine of economic growth, and countering cybercrime, · The next panelist was Mike Shannahan, an FBI Supervisory Special Agent and Assistant Legal Attache. Mr. Congressman Pittenger moderating Panel II, which Shannahan spoke about the FBI Included Frederick Reynolds from Bm·clays, William program he was involved with, Fox from Bank of America, and Charles Bretz from the which stationed him in Eastern Financial Services Information and Analysis Center Europe to work with foreign law enforcement counterparts, This concept has been applied to the National Cyber Investigative Joint Task Force, an Interagency group led by the FBI, Including 241aw enforcement agencies which are co-located. The goal ofthls task force Is cooperation between law enforcement and interagency cooperation. 3. Private sector officials from the financial industry discussed the challenges that they face in tracl~lng Illicit finance and sharing Information with the government. The first panelist In this series was Charles Bretz from the Financial Services Information and Analysis Center. The goal of his organization Is to protect financial Institutions and the financial services industry in general from cyber and fiscal attacks. He advocated for larger Information sharing between financial Institutions, since terrorist groups now use multiple small accounts to finance their operations. He stated that In the $5 Billion worldwide that was stolen in cyber-attacks and then recovered, the money was moved between 57 countries, which in his view demonstrates the need for international cooperation between financia !Institutions. Frederick Reynolds, representing Barclays, was the next panelist to give testimony. He reiterated the need for Information sharing between financial institutions, while mentioning that local law sometimes inhibits colleagues in the same building from communicating regarding a security threat, and that it must be addressed on a federal level. He stated the need to expand sections 314A of the PATRIOT Act to have a discussion between Industry ' and government, building a more expansive picture of terrorist financing networks. Mr. Reynolds also stressed the need for a consistent policy from government, since banks rely on and depend on consistency in all operations. Bill Fox of Bank of America brought real world examples into the fold. He discussed Bank of America's role In arresting the Boston Marathon Bombing terrorists, and pointed out that without both an ATM camera video and the Information being shared with the government, the suspect would have taken much longer to be apprehended. Tracking the financial transactions of the suspect ultimately led to the bank being able to immediately give law enforcement his location. This was an example of financial institutions having mare current information than government. MsinilraMOrniece, Speakerofthe Parliamentoftlle Republic ofLatvia 4. Janis Sarts, Director of NATO StratCom COE, began the discussion regarding the hostile use of information In the cyber sphere. He gave a view of Information distribution as a more social tool. He began by discussing that there is no hierarchy of Information flow, stating that the Impact of Information that an organization or government may release Is based on the size of Its network, which Is unique to cyber. He proposed three strategies to counter dis information released by hostile actors.· The first of these proposals is educating the public In knowing when an outside actor Is trying to Influence them- when the public Is educated on these matters the effect of the propaganda drops dramatically. Next was the government and media being trained to recognize when a news story Is being manipulated to have a social impact on a country. The last is for governments to create their own narrative and go on the offensive with information. Mr Varls Teivans, Deputy Manager at Latvian Cybersecurity, spoke about the technical perspective to counter hostile Information sharing. He called for a multilateral perspective to counter these Issues, and an example from the French Presidential election. In the French election, Russian affiliated attacks were releasing leaks, however these were fed to them by a French intelligence agency, and were false. Therefore, the information was easily traced and discredited, minimizing the effect of the leaks. Last ln this panel was Stefan Meister the directorfor Central and Eastern Europe on the German Council of Foreign Relations. He spoke specifically about the threat that Russia poses to the EU with dis information. He Panel IV included Joseph 1-lumire from the Center also states that It was surprising that these for a Secure Free Society, David Murray from the operations were not ramped up earlier by Financial Services Integrity Network, Lawl'ie Elder the Kremlin. The three ways that Russia from SAS, and Maija Treija from the Finance and spreads Its dlslnformation ts through state Capital Market Commission media such as Russia Today, Internet trolls that Intentionally disseminate this information online, and hacker groups. 5. The penultimate panel featured panelists discussing cybersecurlty and foreign Investment. J.R. Helmig started his statements discussing data analytics. He stated that the amount of data is not the solution, It is translating large amounts of data into actionable information that can be used to stop a transaction. Until the processes to translate data to information is set, data sharing will be less successful than it could be potentially. Per Mr. Helmig, from a business perspective disregarding policy, the challenge is the translation of the data not the amount. Andrew Davenport started his statements discussing money laundering via real estate transactions. He stated that this problem has been recognized by not only national governments but also international organizations. The money can be laundered most easily between exclusive transactions since there are no comparable properties. Governments of emerging economies may turn a blind eye to these foreign investments because they are weary of stopping foreign investment. He. also mentioned Secretary Mattis' statements regarding CFIUS, which Mr. Davenport agrees lacks cohesiveness and modernity. Matiss D. l 6. International enforcement was the topic of the final panel, including international law enforcement. Joseph Hum ire, the Executive Director of the Center for a secure and Free Society was the first panelist in this series. Mr. Hum ire stated the need for modernization of the sanctions process, since the President needs to declare a national emergency every time sanctions are applied. He also focused on the asymmetry of the fight against cyber-attacks, .which in the case of the United States led to a strict enforcement of not only civil but also criminal enforcement, affecting the financial industry. Maija Trelja reiterated the globalization of the financial industry and the role that this plays In foreign Investment. Lawrie Elder, who is the Principal in the Intelligence & Investigate Practice In SAS. Mr. Elder plays a role in between law enforcement and SAS, assisting them when cooperation Is necessary. He gave the example oft he creation of DHS after 9/11 in order to have greater cooperation between government agencies, however the amount of data and lack of trust in political systems are the difficult elements of information sharing. The trust Is not only public trust but interagency trust, which is commonly a jurisdictional issue that may hinder cooperation. II## UNITED STATES DEPARTMENT OF THE TREASURY Eio@E.. ~ 2 August 2017 SUMMARY OF REMARKS AT THE 8'1'11 PARLIAMENTARY SECURITY INTELLIGENCE FORUM IN RIGA, LATVIA Mmk Hanson, Chief of the Cyber and Emerging Teclmologies Section at the Financial Crimes Enforcement Network (FinCEN), provided a discussion of how FlnCEN has strived to stay ahead of the teclmical evolution in financial crimes and terrorist financing. He described how changes in infonnation technology nnd illllovations in fmtech are bringing many benefits to society, while also leading to more tecbnology-orienred financial climes. He shared his team's experience adapting its financial crime mission to the cyber domain-developing expertise in cybercrime, emerging payment systems, and new financial infrastructure that allow them to combat evolving threats, such as criminals' abuse of virtual currencies. Mr. Hanson provided an overview of!ssues in virtual currencies and how the U.S. has incorporated these new technologies into existing regulatory frameworks, He described how virtual mmencies, like bitooin, have achieved technological breakthroughs in their advancement of'blockchain technology, spad In the face of a variety of cyber-enabled crimes, he noted that many of these schemes continue to take advantage of regulatory gaps betweenjul'isdictions and exploit vulnembilities h1 traditional business processes, Mr. Hanson encouraged legislators and goverrunent agencies to stay engaged with changes in teolmology, look to intel'llational standards, and to wolic with their local industry to study relevant issues. UNCLASSIFIED Threat Analysis SAS Institute Environml!nt and History §sas Recent military success against Salafl jlhadlst terrorist grotlps has seen the Islamic State in Iraq and the Levant (ISIL) losing their foothold In territories that have been considered their heartlands in Iraq and Syria. A notable consequence of these developments has been a strengthening of these groups' commitment to target Europe and North America. This approach has met with some success, drawing on the experience of European ISIL fighters returning from the frontllnes. Simultaneously, they have set out to motivate "lone-wolf" attacks and to develop localized networl "The key problem the G/obsec Intelligence Reform Initiative addresses is that of Intelligence cmd personal dato sharing and Its operat/ona/fsatlon at the dome. While the need for data sharing and the operatlonalizatlon of lnte111gence products i_s widely accepted, there Is also a recognition that to be effective, agencies must enhance the Information technology capabilities around collation, analysis, and the associated management of operational processes. The related significant challenges are often magnified rather than lessened by the volume of data that exists for agencies to exploit. Information sources are vast and varied, a complexity that Is only increased by this now essential Inclusion of day-to-day community and policing data. In order to reduce oomplexlty and cost It Is always beneficial to, as far as possible, bring all ofthat data together for process management and analysis on a single secure platform -complete with proper governance and privacy controls. As a first step then, the challenge Is to collect, collate, classify and (crucially) de-conflict large 'amounts of data both structured and unstructured from a wide vorlety of disparate sources. Aside from the surmountable technical challenge, there are obvious political and legislative concerns In transferring such data and ro~b~u~st~~~~-_.;.--. models in !l1e technology and processes will need to be evidenced to provide confidence that Inter-agency data will be secure. ''II' Onoe the above processes have been undertal July, 2017 Dear Participants of the 8'11 Parliamentat'Y Intelligence Security Forum: As a previous participant and presenter at these forums, !understand the benefit tl1ese events offer for healthy dialogue and understanding of important global security issues, such as combatting terrorism. Many forum participants are familiar with the Privacy and Civil Libetties Oversight Board (PCLOB). For those who are not, I would like to provide a brief background on this independent agency In the e)(ecutlve branch of the U.S. government. The PCLOB is a five-member board created as a 1·esult of a recommendation of the National Commission on Terl'Ol'ist Attacks Upon the United States (also known as the 9/11 Commission). The Commission e"a1nlned the intelligence failmes that led to the events on September 11, 2001, at1d analyzed what the United States could do to prevent future attacks. The 9/11 Commission report offered 4 I recommendations to keep America safe mainly emphasizing the need to strengthen information sharing acmss the intelligence community, Howe vel', while recommending changes to the way the govemmen! collects and shares intelligence, the Commission also recognized the need for a c~ntl'al voice in the executive branch to ovel'see pl'ivacy and clvil liberty concerns. To that end, the Conunission recommended creating a board within the e)(ecutive bl'anch to monitor actions across the government. Congl'ess and the President enacted legislation to establish this Boat·d, but it has taken nearly a decade to stand it up in the fashion that it is today. ln fact, the Boal'd only began its work in earnest in 2014 soon after the 5'" membet·- its Chainnan- was appointed and confirmed by the Senate. As an independent, bipartisan agency, the PCLOB has two fundamental statutory responsibilities: advice and oversight. Fil'st, it provides advice relating to e)(eoutive branch actions or effotts to protect the nation from tet•rorism and, second, it provides oversight to executive branch cotmtet'lenol'lsm actions or efforts- a role that entails close attention to impleme!llation of both law and policy. Although the PC LOB does not make law, not· draft or enforce regulations, the U.S. Congress and otlter federal agencies may consult the PC LOB for its legal and policy perspectives as they engage in the legislative or other regulatory processes. Over the years, the U.S. intelligence community often has sought advice from the PC LOB on e)(ecuting its pl'Ogmms. This practice gives national security officials an e)(tra degree of assurance that their efforts do not tllmecessal'ily u·espass upon civllliberties. It is important to stt·ess to out· foreign pa.rtners that PCLOB's statute only permits it to engage on privacy and civil liberties matters in tb.e countel'terrodsm realm. Under this specific mandate, PCLOB successthlly produces reports that are relevant to the U.S. intelligence community, elected officials, non"govel'llmental organizations, and others concerned abotlt how best to simultaneously pt·otect America and pr·lvacy and civil liberties. While some of the PCLOB's work is classi!ied to allow for the dgorous examinations of executive branch counterterrorism efforts, inc! tiding some of the most prevalent intelligence secut·lty issues .of the day, the PCLOB makes its reports public to the extent consistent with the pmtection of classified information and applicable law. The PCLOB contim1es to exercise its oversight ftmction to review and analyze actions the executive branch takes to protect the nation from terrorism, ensul'ing that the need for such actions is balanced with tl1e need to pmteot privacy and oivillibmties. Although the aget1oy is currently in a sub-quorum status pending the appointment of new members, the staff continues its work on advice and oversight projects previously approved by the Board. PCLOB'Hesponsibilities also include oversight of the executive branch's use of financial information to combat terrorism and its fin~ncing. Financial Information can provide uniquely timely and acctlrtlte information about tcrtol'ist financing. This is because the reliable movement off\.mds demands pl'eclsiotl tn identifying the sending and receiving entities. The PCLOB's ovemight of the executive bl'anch~s use offlmmci'll infOl'mation in its countertet'J'OL'ism efforts is a critical component of the U.S. govemment's overall effort to protect pl'ivacy and civil liberties. All of the forum's participants and speakers- whether from a major financial institution or a member of Parliament- play a role in safegual'dlng the wol'ld's citizens tl·om terrodsm. I would like to thank Rep. Robet't Pittenger and the Pm·liament of Latvia for ol'ganizing such a diverse group ofexperts to discuss collaborative effm'ls to cotmter terrorism in all of its forms. Sincerely, Elisebeth B. Collins Board Member I• b.O c ·-u c (0 c ·-LL...... , Vl cu .01: ·-"- ti 0 cu "- Q. "- ~ a..(]J .~ -""c b.O Cll c QJ rn ·-....., c (0 0 :p ..c rn ....c E $l:l 0 c u c <( L Combating Terrorist Financing • The Keys To Combating Terrorist Financing Are: • Information sharing • Cooperation between governments and the private sector • Terrorism financing is inherently challenging to detect-made even more difficult with the shift to lone wolf and less centrally organized attacks • Critical to focus resources and attention on vulnerabilities and where the greatest impact can be made Formal Processes for Information Sharing in the U.S. Section 314(a), USA PATRIOT Act • Requests to Fls from law enforcement (via RnCEN) for information on accounts and transaction activity of specified individuals or entities • Response to 314(a) requests is mandatory Section 314(b), USA PATRIOT Act • Voluntary program to facilitate sharing of Information between eligible US Flsfor the purpose of identifying potential terrorist activity or money laundering • Participating Fls must register with RnCEN • Statutory safe harbor from liability for sharing customer information • Similar provisions coming into force in the UK this fall "SAR Back-Up Request" (31 CFR 1020.320(d)) • FlnCEN regulations require F!s to maintain supporting documentation for SAR filings for a period of five years and to make available to law enforcement and regulatory authorities on reque_ Informal Mechanisms for Information Sharing • Discussion among Fls, law enforcement, and regulatory authorities of emerging trends and threats • Focus on typologies, industries, etc., rather than on specific entities FinCEN Advisories/Bulletins • RnCEN, through its Financial institution Advisory Program, issues public and non-public advisories to financial institutions concerning money laundering or terrorist financing threats for the purpose of enabling financial institutions to guard against such threats Other Law Enforcement I Regulatory Outreach • Symposiums (Fed/FBI, HIDTA/ HIFCA) • Case Studies • Law Enforcement and Industry small group meetings •JMUT Takeaways • Granular Risk Analysis: Don't broadly de~risk a country because it is "easier" and "less risky". Financial flows are the lifeblood of the economy and cutting them off wholesale only makes the problem worse. Utilize all sources of information to conduct your analysis if possible (i.e. negative news, commercial solutions, NGOs, device IDs) • Dispel the Myths: Unlike some areas of regulation where good minds differ, no legitimate financial institution wants to bank criminals, terrorists or aid proliferation Information sharing and advanced ana!ytics in many ways increases rather than reduces privacy. Despite the headlines, most financial institutions are not looking to . spend less, cut corners or do less with their financial crime programs. Most industry suggestions look to make the money and time spent more effective. ___ L ____ - Takeaways • What do we need from Governments: - Provide Banks with actionable information. No one wants to bank criminals or terrorists. - Inconsistent legislative approaches ill the areas of information sharing and data privacy makes our job much more difficult. To have an enterprise wide view and approach, we must be able to share information enterprise wide. - Banks want to be part of this fight. Vilifying or shaming "good;] banks for small errors is counterproductive. It will only produce de-risking and less visibility. - Balance the policy objectives. Recognize that you cannot have financial inclusion, speed and transparency without some degree of risk of lllegal money moving through a bank. If we totally de-risk, the illegal money is harder to find. - Law Enforcement should advocate for its priorities. ------~ .. ----~--~·--·--- ...... ------.------·-----.