In 2015, British authorities caught Hezbollah-linked operatives stockpiling more than 6,000 pounds of explosives on the outskirts of London, new reports revealed last month. The British deserve praise for unearthing the London bomb factory. But they did not destroy the underlying commercial or financial structures that allowed the group to buy and stockpile such materials.

For too long, counterterrorism operations have focused narrowly on disrupting attacks. Without aggressive prosecution of those who carry out the groups’ financial transactions, the illicit networks that provide financial and logistical support for Hezbollah are likely to remain intact.

The United States has begun taking steps in the right direction. Last month, Paraguayan authorities extradited the businessman Nader Mohamad Farhat to face money laundering charges in Miami. Until May of last year, he ran one of the largest currency exchanges in the Argentina-Brazil-Paraguay Tri-Border Area. According to a U.S. Justice Department press release announcing the indictment of his co-conspirators (the cases have since been merged), Farhat participated in “an international money laundering scheme relying on the complexities of global trade … to launder millions of dollars for transnational drug traffickers and other bad actors.”

Farhat’s case could lay bare the intricacies and magnitude of money laundering in the region—which serves as a hub for such activity—including for the Lebanese terrorist group Hezbollah, to which Farhat is allegedly connected. U.S. prosecutors indicted him on drug trafficking and money laundering charges, not material support for terrorism. However, the U.S. State Department envoy on counterterrorism, Nathan Sales, made it clear at a public event commemorating the 25th anniversary of the bombing of the Jewish Community Center in Buenos Aires (which is believed to have been carried out by Hezbollah, though a Palestinian front group initially claimed responsibility) that he believes Farhat is a “Hezbollah supporter.”

The FATF has the ability and the mandate to fight a much more robust war against international money laundering.

Prosecuting Farhat is the right approach. Washington should be working with its partners to use the legal tools at its disposal, including the Financial Action Task Force (FATF)—an international intergovernmental watchdog tasked by its member states (37 countries comprising the most important global financial centers in the world) with tightening compliance standards to crack down on illicit finance. The FATF has the ability and the mandate to fight a much more robust war against international money laundering, not just to target white-collar criminals but to stop the flow of money to Hezbollah and other terrorist groups.

The FATF defines trade-based money laundering as “the process of disguising the proceeds of crime and moving value through the use of trade transactions in an attempt to legitimise their illicit origins.” Such schemes typically entail the deliberate over- and undervaluation of commercial merchandise, and corresponding misrepresentation of it, so that it becomes a conduit for the transfer of value. Companies involved may be moving real merchandise or may be simply generating a paper trail to justify banking transactions. They may be moving counterfeit goods while declaring the much higher value of their authentic equivalents. Given their systematic misrepresentation of the actual worth involved, the perpetrators of such schemes almost invariably engage in tax evasion as well. The bottom line is that the merchandise moved is a cover to transfer value back to criminals who cannot receive payments through the formal financial system.

The United States can leverage its influence inside the FATF to encourage countries to adopt more stringent controls over their banking sectors and over merchandise at ports of entry. Such controls would reduce the amount of dubious transactions and increase inspections of suspicious cargo. For example, it can devote more financial resources and additional personnel to support the U.S. Immigration and Customs Enforcement’s Trade Transparency Unit (TTU) in its international partnerships, which aim to do a better job at combating trade-based money laundering. These TTU partnerships involve the exchange of trade data with foreign countries that enter the partnerships. Data exchange is a crucial step to spot invoice discrepancies (e.g., different weights declared, at either end of the shipment, for the same cargo) and anomalies (e.g., impossibly low prices for the merchandise declared). This model, which the United States has been promoting through the FATF, will greatly increase access to trade data by law enforcement agencies and port authorities, such as customs officials, who can then more easily spot, monitor, and investigate anomalies in trade flows.

The Tri-Border Area is a convenient region for trade-based money laundering. It is a well-known center for contraband and the sale of counterfeit goods, and its illicit economy has an estimated value of $18 billion a year. Yet many of the companies involved are American, which exposes the U.S. financial system to considerable reputational risk.

U.S. law is part of the problem, since, much like offshore jurisdictions and unlike most European countries, it does not require basic information about company ownership to be public and easily available. In legal terms, it is difficult to determine the beneficial ownership—or who really benefits from the activities—of privately held companies. Trade-based money laundering schemes exploit this secrecy, since they often rely on multiple front companies traceable to a single owner to generate the paper trail necessary to move value across jurisdictions.

Numerous leaks in recent years—such as the Panama Papers and the Offshore Leaks—have made it clear how the screen of beneficial ownerships conceals opaque corporate structures, tax fraud, and the ill-gotten gains of numerous oligarchs and dictators. The leaks’ bottom line: The best cure for potential fraud is transparency.

The best cure for potential fraud is transparency.

Offshore jurisdictions have thrived on the opacity they offer to clients wanting to shield their financial assets and corporate activities from scrutiny—not just from the public at large but from law enforcement and tax authorities as well. Pressure from international organizations such as the FATF, backed by the political and economic weight of the United States and other Western allies, has led many offshore tax havens to slowly make their secretive jurisdictions more transparent. The European Union’s blacklisting criteria of offshore centers, for example, has led countries to adopt international good governance criteria for automatic and on-request information sharing with public authorities about account holders. This measure is essential to combat tax evasion and money laundering.

Although U.S. policymakers and regulators have encouraged transparency in order to combat illicit finance, there is still more that can be done to strengthen this approach in state and federal law. Federal prosecutors should more frequently and aggressively target financial crimes, and judges should impose longer sentences for offenders involved in material support for terrorism and drug trafficking. And that may require Congress, too, to revisit legislation in order to stiffen punishment for financial crimes.

The United States should also consider sanctioning corrupt politicians who refuse to tackle drug trafficking and terrorist finance in their own backyards under the Global Magnitsky Act. As Marshall Billingslea, the U.S. Treasury Department’s assistant secretary for terrorist financing, told an audience in Estonia in May, “If we target the oligarch, if we target the high-net-worth individual in that given country and sever them from the international financial system, in so doing we can induce systemic change within the society.”

The United States has already sanctioned a president, a vice president, and a foreign minister in Venezuela on charges of corruption, racketeering, and drug trafficking. Other leaders should be on notice that their role as enablers of crime may have made them rich, but it also makes them vulnerable.

By focusing on illicit networks and trade-based money laundering, the United States and its allies can move from disrupting planned attacks to depriving terrorists of the means to carry them out. The benefits of this approach would extend into other domains as well. It would protect consumers and manufacturers alike by stamping out the counterfeit goods so prevalent in trade-based money laundering schemes. It would weaken the cartels and criminal gangs that are undermining law and order throughout the Western Hemisphere, a key cause of clandestine immigration. It would punish corrupt politicians, sending a signal of hope to countries seeking to climb out of kleptocracy. In short, it is a more sustainable—and more effective—way to fight terrorism and corruption.

Emanuele Ottolenghi is a senior fellow at the Foundation for Defense of Democracies. Twitter: @eottolenghi