Becoming Suspicious Across Borders: Algorithmic Extraterritoriality and AI-Driven Financial Surveillance

To better assist users with completing challenging tasks, AI agents mediate communications, access data, and interact with different APIs. Many employers (and even nation-states) already provide their users with this technology. However, widespread adoption of AI agents creates a new risk to abuse access to user data for another goal: surveilling users. These users might not even have the ability or permission to control the actions and data accesses of the surveilling agents. We introduce and formalize the problem of agentic surveillance: the ability of an AI agent to analyze available information, craft a report, and send it out using available tools. To evaluate surveillance capabilities across different models, we create SurveilBench, a dataset of various reporting scenarios focusing on three domains: corporate, education, and police. We find that some models exhibit emergent (i.e., unprompted) tendencies to help surveillance, but they also report the attempts to surveil users to the government. Finally, we repurpose prompt injections for evading surveillance and develop three evasion techniques that hide from, deceive, or induce over-escalation in surveillance agents. We conclude that agentic surveillance can already be easily implemented and, therefore, call for a comprehensive technical, ethical, and legislative framework to protect users.

Cross-border insider threats pose a critical challenge to government financial schemes, particularly when dealing with distributed, privacy-sensitive data across multiple jurisdictions. Existing approaches face fundamental limitations: they cannot effectively share intelligence across borders due to privacy constraints, lack reasoning capabilities to understand complex multi-step attack patterns, and fail to capture intricate graph-structured relationships in financial networks. We introduce FedGraph-AGI, a novel federated learning framework integrating Artificial General Intelligence (AGI) reasoning with graph neural networks for privacy-preserving cross-border insider threat detection. Our approach combines: (1) federated graph neural networks preserving data sovereignty; (2) Mixture-of-Experts (MoE) aggregation for heterogeneous jurisdictions; and (3) AGI-powered reasoning via Large Action Models (LAM) performing causal inference over graph data. Through experiments on a 50,000-transaction dataset across 10 jurisdictions, FedGraph-AGI achieves 92.3% accuracy, significantly outperforming federated baselines (86.1%) and centralized approaches (84.7%). Our ablation studies reveal AGI reasoning contributes 6.8% improvement, while MoE adds 4.4%. The system maintains epsilon = 1.0 differential privacy while achieving near-optimal performance and scales efficiently to 50+ clients. This represents the first integration of AGI reasoning with federated graph learning for insider threat detection, opening new directions for privacy-preserving cross-border intelligence sharing.

We present a compliance-first architecture for AI in regulated finance that treats regulation as an orientation layer rather than a deterministic ruleset. A matrix of regulatory intent and exposure provides a compact classification handle, which a governed policy compiler then maps into concrete prohibitions, obligations and runtime budgets. Prohibitions constrain feasibility and block externalisation, while obligations extend tasks with artefacts that must meet explicit admissibility criteria. Committee activation remains policy-driven and proportionate, preserving efficiency while ensuring supervisory oversight. Evidence, decisions and reason codes are bound to a permissioned DAG with deterministic timestamping, enabling replay, provenance checks and clear attribution of failure. Clause-level legal indexing with effective dates and capability-based agent routing ensure portability across DACH and the wider EU. The result is assurance by construction: compliance is embedded in execution and verifiable by auditors without sacrificing proportionality or transparency.