The tech sector headlines over the past few weeks have been dominated with discussions about privacy policies of Facebook, Google and Yahoo both in Europe and the US. Why doesn’t anything controversial like this ever happen in the B2B e-Commerce sector? You might be surprised to learn that consumer and business privacy issues do arise in B2B. And you would probably be even more surprised to learn that the issues are so significant that they make the front-page of the New York Times. And you would be in disbelief if I told you that these data privacy concerns are considered strategic issues by the European Parliament, US Federal Bureau of Investigation and Central Intelligence Agency. In this post, I want to highlight an example of how B2B networks are being used to track money-laundering activities of Al Queda terrorist cells through a system called TFTP.
What is TFTP?
If you are a B2B e-Commerce practitioner or regular reader of this blog you might have guessed that TFTP is yet another proprietary Managed File Transfer protocol that is creating barriers to frictionless commerce. Unfortunately, you would be incorrect. TFTP refers to the Terrorist Finance Tracking Program that was initiated by the Bush Administration shortly after the September 11th attacks. The objective of the program is to identify and cutoff the international sources of financing that terrorist cells in the US are dependent upon to their conduct operations locally. Nine of the hijackers responsible for September 11th funneled money from Europe and the Middle East to SunTrust bank accounts in Florida. What is the relationship between TFTP and B2B e-Commerce? For almost nine years, the TFTP program has been leveraging data about international finance transactions that is transmitted over the SWIFT network.
is a specialized business process network which connects all the major financial institutions around the globe for the purpose of exchanging information related to payments, securities, foreign exchange and letters of credit transactions. SWIFT is not a bank and does not process payments, exchange currencies or facilitate securities trades. Instead SWIFT is an information network that allows its customers, primarily financial institutions, to send instructions about which payments to execute; how to settle securities trades; and cash positions in bank accounts. SWIFT does not refer to itself as a B2B e-Commerce network. However, I classify them as one due to the fact that their primary business is the exchange of standards-based messages and structured files between different institutions.
SWIFT is the biggest financial network on the planet with connections to over 9000 financial institutions in over 200 countries. With every major financial institution on the planet connected to it, SWIFT routes in excess of $6 Trillion daily between institutions. Although, SWIFT supports a wide variety of transaction types, the network’s strong suit has always been activities related to cross-border, high-value payments. Consequently, SWIFT possesses a rich source of international financial transaction data that would be of great interest to US government agencies seeking to track terrorist money flows.
And that is exactly the nature of the relationship that has existed between the US TFTP and SWIFT since a few weeks after the September 11th attacks. The US government claims that by mining data from SWIFT transactions it has been able to identify thousands of terrorist related funding activities, including several high profile arrests. Of particular interest to the US are transactions originating in the United Arab Emirates or Saudi Arabia destined for the accounts of US businesses and individuals with known terrorist affiliations. For example, SWIFT data provided a link which helped to locate Riduan Isamuddin, believed to be responsible for a 2002 bombing of a Bali resort, in Thailand in 2003.
More in a future post…