Euro SIFMANet: Illicit Finance and Sanctions Implementation
Overview
SIFMANet is a collaborative network, led by the Centre for Financial Crime and Security Studies at RUSI, in collaboration with RUSI Europe, and supported by the National Endowment for Democracy. The network aims to bolster the response of EU member states to the national security threat posed by illicit finance to democracies and to provide viable policy recommendations.
The Russian war in Ukraine has shattered the stability of Europe and brought to the fore the role of finance in international security. Yet very rarely is the national security threats posed by illicit finance to our societies considered, allowing it to subvert European democracy and threaten the rule of law.
SIFMANet will bring together European civil society and academic experts to engage with governments and their private sectors in boosting the ability of the EU to think about and respond to illicit finance beyond the criminal dimension.
SIFMANet Summit – 8-9 March 2023
The European Sanctions and Illicit Finance Monitoring and Analysis Network (SIFMANet) held its two-day SIFMANet Summit in Brussels on 8–9 March 2023. The summit convened key stakeholders from across the EU to assess the progress in the enforcement of sanctions by member states. The consensus approval of 10 restrictive measures packages since February 2022 is a success for the EU. However, a sanctions regime is only as effective as its adequate implementation. After six in-country engagements, SIFMANet members and representatives from the public and private sectors of several member states, as well as the European Commission, gathered to discuss the challenges identified and chart a way forward to strengthen sanctions enforcement mechanisms and propose further tools to maximise the impact of sanctions on Russia.
On Day 1, RUSI’s Centre for Financial Crime and Security Studies (CFCS) and RUSI Europe hosted a closed roundtable discussion with over 30 policymakers, business representatives, law firms, civil society organisations and researchers from across the EU to discuss the status quo and opportunities for its improvement in 2023. The debate addressed the needs of both the public and private sectors, and the key stakeholders in charge of sanctions implementations voiced the challenges they face at an operational level. The resources and capabilities to enforce sanctions vary across member states. Latvia’s financial intelligence unit (FIU Latvia) described how its commitment to the effective enforcement of sanctions requires additional support from the EU, primarily in terms of customs controls. Among the challenges identified, both public and private sector representatives recognised a shortage of financial and human resources dedicated to sanctions. However, the private sector – especially the non-financial sector – required greater support to offset its lack of experience in implementing sanctions. The roundtable closed with a discussion on the challenges for 2023. From the continued presence of Western components in Russian military systems to the legal difficulties to seize frozen assets, participants agreed that much work remains to ensure the effective implementation of sanctions and damage to Russia’s military capabilities.
On Day 2, the summit was opened to the broader public to gather further insights from a whole-of-society perspective. Two panel discussions assessed the current status of EU sanctions and discussed the way forward for a more comprehensive and impactful sanctions regime. The first panel gathered representatives from the European Commission, the Ministry of Foreign Affairs of the Czech Republic and a representative from an international law firm to discuss the leading role of the Commission in drafting the sanctions packages. Panellists highlighted the need to focus now on the implementation of sanctions, understanding the weaknesses in national enforcement capabilities and how to overcome them. The second panel convened speakers from the French Ministry of Foreign Affairs, a representative from the Finance Latvia Association and a sanctions expert. Participants agreed that the way forward must be based on a willingness to become more flexible, revisit the measures in place and learn to accept the changes that are required.
The SIFMANet Summit was a unique opportunity to understand the current state of affairs in the sanctions implementation efforts across the EU. Addressing the specific weaknesses identified across public and private sectors at national level and the need for greater EU-driven harmonisation to overcome deficiencies, the summit concluded with the presentation of the SIFMANet recommendations. The recommendations set out the key findings of the network, charting the way forward on how to make sanctions work.1
The recommendations can be found here.
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Project partners
The Polish Institute for International Affairs (PISM)
The Polish Institute of International Affairs (PISM) is a leading Central European think tank that positions itself between the world of politics and independent analysis.
Prague Security Studies Institute
The Prague Security Studies Institute (PSSI) is dedicated to identifying and analysing a range of security-related challenges facing the post-communist states and allied partners worldwide, with a focus on countering economic and financial hybrid warfare and threats to the space domain.
Center of Excellence in Anti-Money Laundering, Lithuania
The Centre of Excellence in Anti-Money Laundering (AML Centre of Excellence) combines the efforts of public and private sectors in strengthening the framework on anti-money laundering and counter terrorist financing (AML/CTF).
IRIS, France
The French Institute for International and Strategic Affairs (IRIS) is one of the main independent European Think Tanks on geopolitical and strategic issues.
Latvian Institute of International Affairs (LIIA)
LIIA is Latvia’s oldest research center, and it is the country’s best known and most internationally recognized think tank specialising in international affairs.
Globsec, Solvakia
GLOBSEC is a global think-tank based in Bratislava committed to enhancing security, prosperity and sustainability in Europe and throughout the world.
Stockholm International Peace Research Institute (SIPRI)
SIPRI is an independent international institute dedicated to research into conflict, armaments, arms control and disarmament.
Hybrid CoE
Hybrid CoE is an international, autonomous network-based organization promoting a whole-of-government and whole-of-society approach to countering hybrid threats. Participation in the Centre’s activities is open to all EU and NATO countries, and the number of Participating States has grown to include 32 states today.
Jacques Delors Centre, Hertie School, Germany
At the Jacques Delors Centre, academic research goes hand in hand with the development of concrete ideas for future-oriented EU policies. In our think tank work, our analyses provide an independent, non-partisan view of European policy processes and decisions.
Aims and objectives
As a vibrant network of various European research institutions, SIFMANet intends to address identified shortcomings and unanswered challenges that EU member states face. It aims to:
Promote the effective implementation of EU sanctions on Russia by bolstering the under-resourced and over-stretched capacity of member states.
Highlight the importance of applying a national security lens to the threats posed by illicit finance to the EU and connected states and their democratic systems.
Create a network of EU academic and research institutions that work together to ensure sanctions and illicit finance remain central to the EU security and policy agenda, as part of the wider EU focus on defending democracy.
Project outputs
As part of its engagement efforts, SIFMANet will convene a series of awareness-raising roundtable discussions in EU capitals. The project will also produce a series of outputs in the form of op-eds, commentaries and podcasts.
The network will convene events in Brussels to propose viable solutions gathered as SIFMANet Principles, the final written proposal for more effective sanctions and illicit finance responses by EU member states.
Project contacts
Director of Centre for Financial Crime and Security Studies, RUSI
Research Analyst
Programme Manager, CFCS RUSI Europe