Assessment of Money Laundering and Financing of Terrorism Risks in a Nonprofit Organization

Abstract

Nonprofit organizations (NPOs) handle enormous sums of cash and routinely transfer monies across countries. NPOs have historically functioned under fewer formal regulatory controls and a less rigorous administrative and financial management style. Criminal and terrorist misuse is said to be more likely in the industry. The abuse of nonprofits by terrorist entities has a long history, business, and financial indicators. They are often utilizing in industries where prevention is critical. Indicators can improve forewarning, allowing for the mitigation of dangers before they materialize or detecting existing misuse. Numerous elements were founded in the case studies that showed that an NPO was being abused or was at high risk of being abused. These elements have been compiled in this chapter to assist all stakeholders, including nonprofits, government actors, financial institutions, and designated non-financial businesses or professions (DNFBPs), in identifying and investigating potential cases of abuse within a specific NPO the more significant NPO sector. While the list of indicators provided here is extensive and global in scope, it is not exhaustive; there are likely to be additional indications peculiar to certain settings found within specific national jurisdictions, as per FATF Recommendation 1 (national risk assessment).