The nation’s anti-money-laundering regulator has warned the financial sector it must ensure dodgy not-for-profit groups are prevented from financing terrorism, after a report found Australian charities were at risk of being used to wash money, The Australian reports.
The report, released by Austrac, placed the country at the highest-risk level of eight countries in Southeast Asia for “consequences” flowing from its vulnerabilities in not-for-profit organisations — a ranking equal worst with Indonesia — due to the likelihood that money carved out of local charities would be sent to high-risk areas, such as Islamic State-controlled parts of the Middle East.
“Austrac is concerned about any vulnerability that might lead to exploitation of Australia’s financial system by criminals or terrorists,” Austrac deputy chief executive Chris Collett told The Australian.
“The cash-intensive nature of the not-for-profit sector creates vulnerabilities. NPOs that send or receive funds from high-risk countries are also vulnerable to money being diverted for terrorism purposes.”
The report, co-authored by financial intelligence agencies in Australia, New Zealand, Indonesia, Brunei, Malaysia, The Philippines, Singapore and Thailand, has been published to inform the financial services industry of emerging threats.
Austrac warned that NPOs vulnerable to exploitation often received their main source of funding from public donations and existed to “support a particular ethnicity or religion”, while their funds flowed “to and from a high-risk country”.
The report also noted that one global NPO had appointed a man who was a member of al-Qa’ida affiliate Jemaah Islamiah as the manager of one of its branches in Indonesia.
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