What is proliferation?
Proliferation is the manufacture, acquisition, possession, development, export, transhipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery and related materials (including both technologies and dual-use goods used for non-legitimate purposes), in contravention of national laws or, where applicable, international obligations. It includes technology, goods, software, services or expertise.
What is proliferation financing?
Proliferation financing takes place when a person:
- makes available an asset,
- provides a financial service, or
- conducts a financial transaction,
and the person knows that, or is reckless as to whether, the asset, financial service or financial transaction is intended, in whole or in part, to facilitate any of the activities specified at paragraph 2.3.2 below, regardless of whether the specified activity occurs or is attempted.
The activities are as follows:
- the manufacture, production, possession, acquisition, stockpiling, storage, development, transportation, sale, supply, transfer, export, transhipment or use of:
- nuclear weapons;
- chemical weapons; iii. biological weapons; or
- materials related to nuclear weapons, chemical weapons, biological weapons or radiological weapons that are prescribed by regulations or restricted or prohibited under any enactment relating to export or import controlled measures; and
- the provision of technical training, advice, service, brokering or assistance related to any of the activities mentioned under paragraph 2.3.2.
Proliferation financing is very broad and refers to more than simply the payment for goods. Proliferation financing includes any financial service provided in support of any part of the process of procurement and financing of nuclear, chemical and biological weapons, even if such financing is not directly connected to the physical flow of the goods. Financing can include financial transfers, mortgages, credit lines, insurance services, trust and corporate services and company formation. Thus, proliferation financing can be described as both a financial crime risk and a sanctions risk.