Responding to Illicit Finance is Central to National Security
"All elements of our security are supported by our ability to tackle illicit finance – the flows of funds from criminal activity that underpin threats to the UK including terrorist networks, serious and organised crime groups, and hostile state actors." So says the 2025 UK National Security Strategy, a sentiment which has been at the heart of our Centre for Finance and Security at RUSI since I founded the programme in 2014.
But what does this mean in practice and how should the government put fine words into action?
Current systems focus on confiscating criminal proceeds, deputising banks to police suspicious transactions, and imposing growing identity checks on the public. Yet malign states still enter our financial system as part of efforts to subvert our prosperity, democracy and security.
The illicit finance community has spent years disrupting the corrupt, criminals and kleptocrats, but has overlooked how finance – and our open financial system – is being used against us by hostile states.
Readers might point to the intense use of sanctions against Russia after its full-scale invasion of Ukraine. The G7's use of economic power has been impressive, but it was an urgent response to illegal aggression, not part of an integrated strategy to use financial levers as national security tools.
As our political and military leaders debate the defence and security needs of the country, the need for a coherent economic warfare strategy – encompassing the financial dimension of malign state activity, the deployment of sanctions, and the design of offensive disruption of the financial and economic activities of our adversaries – is nowhere to be seen.
Lessons from the past
The UK once understood that economic warfare required integrating intelligence, strategy and execution.
The UK's Ministry of Economic Warfare (MEW) was created in September 1939 to weaken the Axis powers' capacity to fight. It mobilised trade, finance, intelligence, diplomacy and military action through a single economic strategy, combining blockade administration with an 'Enemy Branch' that analysed Axis industry, trade, transport, resources and financial connections. In effect, the MEW was an economic intelligence service focused on adversaries' commercial, industrial and financial activity, drawing on expertise from banking, insurance, commerce, industry and commodities, and working with the Foreign Office, HM Treasury, the armed forces, banks and private companies.
Today, the UK's policies, institutions and strategy have not caught up with rhetoric or reality. Activity is fragmented: sanctions sit principally with the FCDO; money laundering with the Home Office and HM Treasury; and economic security with the Department for Business and Trade. Intelligence agencies examine hostile state activity, but a dedicated financial lens is absent. There may be activity, but there is no coherent doctrine.
While recreating the MEW may be premature, for today's policymakers its core operating principle is instructive – using financial and economic intelligence to inform policy and operational activity must be integrated into the UK's national security strategy.
From rhetoric to readiness
First, the UK must treat hostile-state finance as a distinct national security challenge. The financial system is not merely being exploited by criminals: Russia, Iran and others use networks of officials, organised criminals, businesses, proxies and professional enablers to fund sabotage, political interference, sanctions circumvention, technology procurement and covert influence. Conventional anti-money-laundering systems will not suffice.
Second, financial intelligence must be integrated into national security decision-making. The UK needs a standing mechanism linking the intelligence agencies, the National Crime Agency, the Foreign Office, HM Treasury, regulators and relevant private-sector expertise, with an explicit national security focus. Financial intelligence should sit alongside human, signals and open-source intelligence, identifying the architecture behind hostile activity, mapping enablers, and determining where the UK and partners can intervene. It should also examine structural vulnerabilities, including property around critical infrastructure, hostile-state wealth entering the UK, high-risk jurisdictions, sectors and payment systems, and the evolving state–crime nexus.
Third, the UK must use its economic strengths more strategically. London remains a major financial centre, with global influence in insurance, law, accounting, maritime services, asset management and financial technology. These are not just commercial assets; they are sources of intelligence, leverage and disruption.
In sum, it is time the government developed a strategy that defines objectives, assigns institutional responsibility and connects sanctions, financial intelligence, law enforcement, trade, investment screening and private-sector partnership.
Tom Keatinge is the founding Director of the Centre for Finance and Security (CFS) at RUSI, where his research focuses on the intersection of finance and security including the financial dimension of a range of security threats.
