Terrorism financing risk is medium

A new report that analysed more than a quarter of a million NFPs that send funds – or operate – overseas has classified as ‘medium’ the risk of money-laundering and terrorism financing.

Produced in partnership with the Commonwealth’s financial-intelligence agency AUSTRAC, Australia’s non-profit organisation sector: money laundering and terrorism financing risk assessment is the first survey of its kind in Australia.

The risk assessment measured vulnerabilities that could be exploited for criminal activity or to promote and support terrorism.

The survey was released by assistant minister to the treasurer Michael Sukkar, justice minister Michael Keenan, ACNC commissioner Susan Pascoe, and AUSTRAC deputy CEO Gavin McCairns.

About 54,000 of the NFPs surveyed fell under the jurisdiction of the ACNC as registered charities.

Key intelligence and data for the assessment was sourced from 23 agencies, including Commonwealth, state and territory law-enforcement bodies, and non-profit regulators, including the ACNC, academic research, and from the sector itself through a national survey and a series of roundtables.

The report highlighted factors that increased an NFP’s money-laundering and terrorism-financing risk, which will help the ACNC target its compliance and education policies.

Charities sending funds and operating overseas should take the time to read the report to ensure that they understand the risks.  In fact, understanding risks associated with sending funds abroad was highlighted as one of the best ways to protect a charity against the threats surveyed.

ACNC commissioner Susan Pascoe said: ‘Charities are crucial in getting funds into conflict zones and other unstable regions, and this is not without heightened risk.’

‘All charities, whether they operate domestically or internationally, must understand money-laundering and terrorism-financing risks and ensure they have robust risk-based governance practices to prevent criminal misuse.’

Acting AUSTRAC CEO Peter Clark said it was vital that government, industry and the NFP sector continued working together to keep the sector safe from criminal abuse and terrorism financing.  ‘This risk assessment will assist our reporting entities who deal with NPOs to assess their level of vulnerability, strengthen their controls, and report suspicious activity to AUSTRAC,’ said Mr Clark.

The report shows that Australian NFPs can better manage money-laundering and terrorism-financing risks by understanding them and having strong governance and internal controls and good accountability.

The assessment also identified common characteristics of NFPs at higher risk of being misused for terrorism financing.

Australia’s non-profit organisation sector: money laundering and terrorism financing risk assessment can be found on the AUSTRAC and ACNC websites.

Download your copy of the report at https://acnc.gov.au/nfprisk

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