ACNC To Assess Risk of Terrorism Financing by NFPs

The charity regulator is working with two national finance agencies to assess the risk of money laundering and terrorism financing facing the not-for-profit sector in Australia.

The Australian Charities and Not-for-profits Commission (ACNC), the Australian Transaction and Reports Analysis Centre (AUSTRAC) and the Australian Taxation Office (ATO) are undertaking the national risk assessment of charities and not-for-profit organisations.

The ACNC said the assessment, which includes a national survey of charities and not-for-profit organisations, would look at the key vulnerabilities and risk indicators of high-risk organisations.

According the ACNC charity register, more than 4,000 Australian charities operate overseas.

“The vast majority of charities operate with integrity and have sound governance practice; however we know, from both international and Australian experience, that some charities can be vulnerable to financing terrorism and money laundering, particularly if they are operating in high-risk regions and do not have sound procedures in place,” ACNC assistant commissioner David Locke said.

“In 2015, the ACNC produced guidance to help charities operating overseas, and we ran workshops with colleagues from across government to help charities to understand the risks and how to protect their charities.

“We have now partnered with AUSTRAC and the ATO to carry out a comprehensive risk assessment of the not-for-profit sector.”

Locke said the ACNC was keen to identify what the actual risk of money laundering and terrorism financing was, and to identify strategies to tackle these issues.

“For us to have a true and accurate picture though we really need a great deal of assistance from the sector,” he said.

“We’re asking people to complete an anonymous online survey to help us assess the risks, identify areas of concern, and highlight opportunities where we can provide support.

“If you are involved in a charity working, or sending funds overseas, or you advise such a charity then I would urge you to assist. It doesn’t take long and it will ensure that the voices and experiences of the sector are represented in this important piece of work.”

The survey is available here and is open until 11 December.

The ACNC said as well, the risk assessment would improve Australia’s adherence with international standards identified by the Financial Action Task Force (FATF), an intergovernmental body that developed and promoted policies to protect the global financial system against money laundering, the financing of terrorism and the proliferation of weapons of mass destruction.

In January 2016 the Indonesian Government intercepted more than $500,000 in charitable donations that were raised in Australia and allegedly transferred to Jakarta.

At the time Indonesia’s Financial Transaction Reports and Analysis Centre (PPATK) worked with AUSTRAC to capture the money, which was reportedly raised by one Australian man.

PPATK chairman Muhammad Yusuf told Indonesian media that between 2010 and 2015 authorities identified 45 money transfers, totaling 5 billion rupiah (A$500,000) in donations, which were allegedly being used to support terrorists and their families.

“We have identified that the money [from Australia] came from alms and donations from individuals in the country. Some of them were aware of what the money was for but some were not because they just gave away the money believing that it was for charity,” Yusuf said at the time.