What AML Professionals Should Know About Improvised Explosive Devices

Anti-money laundering (AML) professionals in the U.S. have an important role to play in reducing the risk of terrorist attacks involving improvised explosive devices. Given the persistent threat posed by jihadist groups and the metastasis of violent white nationalism, the risk of future attacks cannot be dismissed.

In 2007, the U.S. Congress directed the Department of Homeland Security (DHS) to “regulate the sale and transfer of ammonium nitrate by an ammonium nitrate facility to prevent the misappropriation or use of ammonium nitrate in any act of terrorism.” 1

Ammonium nitrate is used for lawful purposes in agriculture, construction, mining and even medicine, but it has also been used for nefarious purposes worldwide. A case in point was the 1995 bombing of the Alfred P. Murrah Federal Building in Oklahoma City, an act of domestic terrorism that killed 168 men, women and children.2

Despite having been conceived over a decade ago, the Ammonium Nitrate Security Program is still under development. The latest regulatory action occurred on June 3, 2019, when DHS invited public comment3 on a redacted report4 that studied the extent to which commercially available products containing ammonium nitrate can be weaponized. Assuming that affected industries and their lobbyists are amenable to new regulations, the report is a step toward establishing regulatory thresholds that would trigger registration and reporting requirements.

Going beyond the scope of ammonium nitrate, DHS also asked the National Academies of Science, Engineering, and Medicine to study the availability and distribution of a longer list of precursor chemicals that can be used to create improvised explosive devices. Published in 2017, the resulting report5 mapped the supply chains of these chemicals and identified a “pronounced lack of visibility and oversight in retail-level, non-agricultural transactions, especially those involving e-commerce, suggesting ample opportunity for malicious actors to acquire precursor chemicals.”

A Role for AML Professionals

As the regulatory process inches forward with respect to improvised explosive devices, AML professionals are in a unique position to analyze the regulatory paper trail and derive insight that informs the way certain customers and transactions are analyzed.

For corporate customers in the agricultural, construction and mining industries, AML professionals can examine the degree to which these customers employ controls to prevent theft and diversion of high-risk precursor chemicals. As an illustration, the Bureau of Alcohol, Tobacco, Firearms and Explosives partners with the agricultural industry on a program6 that recognizes the risks of ammonium nitrate and encourages industry members to voluntarily report suspicious activity to the agency. Because suspicious activity reporting is one of the pillars of an AML program, AML professionals are in a good position to ascertain whether agricultural customers take their voluntary reporting goals seriously.

For individual customers, AML professionals can pay close attention to retail transactions, particularly internet transactions that involve high-risk chemicals and incendiary devices, such as exploding target kits.7 If open-source research reveals that such customers have previously engaged in criminal activity—or if their social media profiles suggest an affinity toward extremist ideologies like white supremacy or extremist groups like the Islamic State group and al-Qaida—this should be grounds for enhanced due diligence at the very least.

Nearly a quarter century after the Oklahoma City bombing, federal agencies are still grappling with the threat of improvised explosive devices. At a time when the number of domestic terror arrests8 are rivaling those relating to foreign terror threats, the risk of future attacks is real and AML professionals have an opportunity to fill the gaps.

Rajdeep Jolly, Esq. CAMS, principal, Jolly & Johnson Consulting LLC, Bethesda, Maryland, USA, info@jollyandjohnson.com

Daryl Johnson, principal, Jolly & Johnson Consulting LLC, Bethesda, Maryland, USA, info@jollyandjohnson.com

  1. “Notice of Availability of Redacted Ammonium Nitrate Security Program Technical Assessments Report,” Office of the Federal Register, June 3, 2019, https://www.federalregister.gov/documents/2019/06/03/2019-11493/notice-of-availability-of-redacted-ammonium-nitrate-security-program-technical-assessments-report
  2. Lois Romano, “Prosecutors Try to Tie Nichols To Purchase of Bomb Material,” The Washington Post, November 7, 1997, https://www.washingtonpost.com/wp-srv/national/longterm/oklahoma/stories/nichols1107.htm
  3. “Notice of Availability of Redacted Ammonium Nitrate Security Program Technical Assessments Report,” Office of the Federal Register, , June 3, 2019, https://www.federalregister.gov/documents/2019/06/03/2019-11493/notice-of-availability-of-redacted-ammonium-nitrate-security-program-technical-assessments-report
  4. “Redacted Ammonium Nitrate Security Program Technical Assessments Report,” Regulations.gov, June 3, 2019, https://www.regulations.gov/document?D=DHS-2008-0076-0150
  5. “Reducing the Threat of Improvised Explosive Device Attacks by Restricting Access to Explosive Precursor Chemicals,” The National Academies of Sciences, Engineering, and Medicine , 2017, http://dels.nas.edu/Report/Reducing-Threat-Improvised-Explosive/24862
  6. “Ammonium Nitrate Security,” Bureau of Alcohol, Tobacco, Firearms and Explosives, https://www.atf.gov/explosives/ammonium-nitrate-security
  7. Mike M. Ahlers and Rene Marsh, “Exploding targets: shooting aid or a ‘bomb kit for dummies?’” CNN, September 9, 2013, https://www.cnn.com/2013/09/06/us/guns-exploding-targets/index.html
  8. Alexandra Hutzler, “FBI DIRECTOR CHRISTOPHER WRAY SAYS A MAJORITY OF DOMESTIC TERRORISM CASES ARE MOTIVATED BY WHITE SUPREMACIST VIOLENCE,” Newsweek, July 23, 2019, https://www.newsweek.com/domestic-terrorism-white-supremacy-violence-fbi-director-1450748

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