Proliferation Financing (PF) Risk is the potential for financial institutions, businesses, and individuals to be involved in activities that support the development or acquisition of weapons of mass destruction (WMDs). It specifically refers to providing the funds, financial services, or materials needed to manufacture, possess, or transfer WMDs like nuclear, chemical, or biological weapons and their delivery systems, thereby undermining international security.
Key aspects of Proliferation Financing Risk:
What it funds:
PF directly supports the proliferation of WMDs (including nuclear, chemical, and biological weapons), their means of delivery (like missiles), and related materials.
How it works:
This can involve direct financial transactions with entities involved in WMD programs or indirect funding, such as businesses generating revenue that is then used to finance weapons programs.
Who is affected:
Any entity within the financial system, including banks, businesses, and individuals, can be at risk if they unknowingly facilitate PF through their financial services or transactions.
Why it's a concern:
PF risk is a significant concern because it enables countries or non-state actors to acquire WMDs, which poses a threat to global peace and security.
