Another IT governance headache: AI-enabled sanction evasion

The report defines proliferation financing as the use of funds or financial services to acquire, develop, or otherwise deal in weapons of mass destruction. It warns that North Korea and Iran are developing and deploying AI models to support sanctions evasion activities. AI can mass-produce high-quality fraudulent documents and automate administrative tasks involved in managing shell company networks. AI systems can analyze blockchain patterns in real time to adjust cryptocurrency mixing strategies and evade detection tools. Generative AI can also produce sophisticated fraudulent identification documents, which has supported phishing attacks against Western companies. The report forecasts that governments and the private sector must rapidly adapt identification and mitigation protocols over the next three to five years as adversaries shift from AI-assisted to AI-enabled evasion and proliferation financing.

"The report, Algorithms of Evasion: The Rise of AI-Enabled Proliferation Financing, from the Royal United Services Institute (RUSI), a UK-based defense and security think tank, defines PF as the use of funds or financial services to acquire, develop or otherwise deal in weapons of mass destruction (WMD). It states, "North Korea and Iran are now developing and deploying AI models to aid with sanctions evasion activities.""

"Key findings include the fact that AI is now capable of mass producing high-quality fraudulent documents, as well as automating what the report describes as "the administrative minutia of managing extensive shell company networks." AI powered systems, it states, can also "analyze blockchain patterns in real time to dynamically adjust cryptocurrency mixing strategies, effectively evading detection tools.""

"In addition, it says, "[tools such as generative AI] which can produce sophisticated fraudulent identification documents, for example, have helped North Korea perpetrate phishing attacks against Western companies.""

"Over the next three to five years, both governments and the private sector will need to rapidly adapt identification and mitigation protocols as adversaries move from AI-assisted to AI-enabled sanctions evasion and proliferation financing (PF), a new research paper warns."

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