On July 16, U.S. Secretary of State Marco Rubio spoke at a summit bringing together representatives from more than 60 countries to discuss political terrorism. Like the Islamic State and al Qaeda, Rubio said, “Antifa militants and their comrades” now posed a “transnational threat,” and global powers should use the same tools used to fight jihadist groups to stop them. A key part of this strategy, he said, would be keeping these groups from using the global financial system.
This is not the first time that the Trump administration has used financial counterterrorism mechanisms for political purposes. More than a dozen officials from the International Criminal Court (ICC), including judges and prosecutors, and the United Nations’ special rapporteur on the occupied Palestinian territories have been put on a list of sanctioned individuals considered the gold standard for screening out nefarious entities. Those unlucky enough to be put on that list have found themselves cut off from a digital economy that pervades nearly all aspects of life.
“As a sanctioned person, I no longer have access to American products and services, even in Europe,” ICC Judge Beti Hohler told a European Parliament committee earlier this year. “My Apple ID, iCloud, Amazon, Airbnb, PayPal, and other accounts have all been blocked or canceled. These cancellations happened overnight without advance warning.”
The Trump administration is exploiting a vulnerability in the global financial system that is often used by authoritarian regimes to target political opponents. A growing list of governments have found that they can make the lives of their enemies abroad miserable by putting them on lists used by financial institutions globally to weed out actual criminals and terrorists. The financial institutions using these lists, increasingly wary of being accused of failing to vet their customers, have inadvertently played along, adopting an overly cautious approach that sometimes ensnares the wrong people.
Banks have been vetting customers for decades, but the real impetus for more thorough screening came after the 9/11 attacks. American investigators found out that the hijackers had used ordinary bank wire transfers to move hundreds of thousands of dollars between accounts in places like Saudi Arabia, Germany, and the United States.
“That’s what this whole system was set up to prevent,” said Stephen Reimer, an associate fellow at the Royal United Services Institute who has advised governments on countering terror financing. “We can’t have this level of blatant use of the formal banking system to finance 9/11. We can’t have that anymore.”
In 2024, Reimer’s research found 126 distinct targets of authorities from 34 countries who had been caught up in this system because they were political opponents. Much of this targeting was made possible because of laws made at the behest of the Financial Action Task Force. This global body has pushed countries to closely monitor payments by individuals, corporations, and nonprofits or be put on lists that would cut them off from the financial world.
In the United States, the Patriot Act put the burden on banks to practice customer “due diligence,” threatening hefty fines for those who failed to flag suspicious customers or transactions. In 2024, banks filed 4.7 million suspicious activity reports with the Financial Crimes Enforcement Network (FinCEN), the federal agency tasked with financial monitoring, and the FBI used thousands of the reports as part of investigations into international terrorism, drug enforcement, corruption, and other financial crimes.
Countries set up financial intelligence units—new agencies modeled after FinCEN—specifically tasked with ensuring compliance and sharing data. Meanwhile, an entire industry popped up to provide commercial databases for financial institutions that would help them decide whether someone was too risky to do business with. The services went beyond simply checking U.S. sanctions lists; flagging whether someone was a “politically exposed person,” such as a high-level government officer; or whether someone had “adverse media” mentions, meaning they had not been officially sanctioned but news stories seemed to cast suspicions on them.
The largest such provider of screening services is World-Check, a database used by nearly every major bank and hundreds of government agencies worldwide. Today, World-Check has nearly 6 million entries in its database. Several major companies now offer similar services, including New York-based Dow Jones Risk & Compliance and Georgia-based LexisNexis Risk Solutions.
One lawsuit in a California court against World-Check illustrates the service’s reach. It was filed by three Turkish Americans accused by Ankara of ties to Fethullah Gulen. After the 2016 coup attempt in Turkey, Ankara set out on an ambitious effort to root out Gulen’s followers from civic life and track down those outside the country. By 2021, according to the U.S. State Department, Turkey had indicted nearly 100,000 people inside the country on broadly defined terror charges, and it also targeted Gulen followers living abroad.
In 2021, the plaintiffs, all living in the United States, found themselves on a list of designated terrorists maintained by Turkish authorities. The list was soon ingested by World-Check, and when businesses looked up the names of the plaintiffs, they got a hit, with the ominous label “terror related; frozen and seized assets; absconder or fugitive.” According to the lawsuit, the listings caused a string of businesses—including eBay, Amazon, Wells Fargo, J.P. Morgan, Bank of America, and Mastercard—to freeze the plaintiffs’ accounts. After much wrangling, World Check did put a note in its database that these designations were being challenged by the individuals, but some of those businesses continued to block the plaintiffs.
David Leppan, who founded World-Check in 2000 and sold it to Thomson Reuters in 2011, said that banks using it and other databases are part of a “compliance frenzy” that needs to be reined in. Instead of trying to vet accusations against individuals, data brokers have sought to be as comprehensive as possible in their listings.
When describing the company’s initial approach, Leppan said it was “not about getting it right” but instead “about getting it out there.” The mindset was “to have the biggest database, not the best database.” Leppan, who now runs his own due diligence consulting, said compliance databases began catering to banks that seemed more and more risk-averse, wanting not just to know if a customer was a politically exposed person or on a U.S. sanctions list, but also if they were convicted of certain crimes or if they had simply been implicated in criminal activity, anywhere in the world, but never tried.
When World-Check got started, Leppan began by manually compiling lists of questionable individuals from a handful of the most reputable sources. He recalled the first entry was Asif Ali Zardari, a Pakistani politician who had been implicated in a string of money laundering schemes that earned him the title “Mr. Ten Percent.” Leppan also added names from the U.N., the U.S. Treasury Department’s Office of Foreign Assets Control, and analogues from agencies in places like the United Kingdom and Australia. His thinking was that ignoring a name on these sanctions lists would do the most damage to an international business.
From the beginning, there were contradictions that had to be navigated. For instance, the United States did not want any business with Cuban entities, but other countries were fine with it. Governments don’t agree on who a wanted criminal or terrorist is, leaving banks with global footprints to figure out whose word to take and which rules to comply with. Yet this decision almost always ends up with taking the least risky path of blacklisting as many potentially problematic customers as possible.
Barlyk Mendygaziyev is one of the people who paid the price for this approach. A Kazakhstan-born U.S. national living in North Carolina, Mendygaziyev has long been targeted by Kazakhstan for his membership in pro-democracy groups there. The U.S. State Department has repeatedly included his targeting in its annual rights reports on Kazakhstan, and lawmakers in Congress have specifically written to the Trump administration about his case. Yet Mendygaziyev discovered that Kazakhstan has tried to use anti-money laundering mechanisms in recent years to obtain financial records for him and his family in the United States, and it sought to have Bank of America and Wells Fargo shut down their accounts.
“My case proves that American banks are not making decisions based on evidence,” he said. “If the U.S. banks don’t comply with money laundering regulations, they can lose their license and face massive fines. The current U.S. financial system lets foreign dictators reach into American soil to punish their own critics and competitors.”
The United States lacks laws like Europe’s Global Data Protection Regulation, which helps those wrongly blacklisted to clear their names. But there is a push in Congress to expand consumer protection laws that could address the issue, said Lyudmyla Kozlovska, a Ukrainian rights activist who has advised European lawmakers and testified in Congress on how to reform the compliance industry.
Kozlovska, along with the Open Dialogue Foundation that she heads, said that she has been the target of several transnational campaigns over the years by authorities in Poland, Moldova, and Kazakhstan, where her group has supported pro-democracy activism. She said that cases like that of Mendygaziyev show the United States needs to be more careful about who financial institutions and government regulators share information with abroad.
Dmitry Navosha, a Belarusian journalist who lives in Europe, has spent three years trying to have his name cleared by compliance databases. He runs several media platforms across Europe and has drawn the ire of governments in Russia and Belarus. In 2023, a Belarusian court convicted Navosha and other journalists of illegally publishing private data, saying they were behind a leaked dossier of government officials allegedly involved in torturing prisoners. Soon after, Navosha said financial services providers and banks closed accounts linked to him and refused to do transactions like allow money transfers, making it impossible for him to pay his reporters across the world.
Over three years, Navosha said he has had some success in convincing banks and compliance data companies to remove the “terrorist” designation that Russian and Belarusian authorities labeled him with. To convince compliance officers of their mistake, Navosha has a litany of proof that he is a victim of politics, including things like State Department reports.
“While unpleasant, it wasn’t devastating. When one bank refuses service, you look for others and explain the context,” he said. The more complicated issue, though, is when transactions get blocked, which he said is a Kafkaesque struggle of tracing which bank and financial service company in the chain of transactions is responsible. “I am certain that [Belarusian President Aleksandr] Lukashenko and [Russian President Vladimir] Putin are satisfied with their discovery of how to globalize domestic repression,” Navosha said.
In February, Washington sanctioned the government of Nicaragua for misusing the global regulatory system to “persecute political opponents.” Nicaraguan President Daniel Ortega’s regime has long been a target of the Trump administration, and its abuse of the global regulatory system has indeed been egregious. The irony, of course, is that Ortega’s efforts to debank dissidents look an awful lot like the methods that Trump and Rubio have embraced.
In 2023, Nicaragua put hundreds of dissidents and journalists on global terrorism and money laundering watch lists after expelling them and stripping them of their citizenship. Among these was Félix Maradiaga, an academic and politician who ended up in the United States. Having attended graduate school in the United States, he thought that he would not have a hard time adjusting. He even had bank accounts that were still active. But soon after his arrival, Bank of America, Wells Fargo, and J.P. Morgan told him that they were closing his accounts. “We know that you’re not a terrorist,” he recalled bank representatives telling him, “but your government is labeling you as this, and it is too expensive for us to do compliance.”
Maradiaga now teaches at the University of Virginia and helps run World Liberty Congress, a global coalition of dissidents that combats transnational repression. “I get to see activists from around the world,” he said. “I realized that a lot of activists do not have the time, the energy, the access, the connections to fight back.” Indeed, even the most high-profile targets of financial transnational repression, like the ICC judges, have had little luck. “Living with U.S. sanctions means living in constant uncertainty,” Hohler told European lawmakers in February. “We are discovering new obstacles every week.”
