Project onPreventing Abuse of the Non-Profit

Sector to Finance Terrorism

Special meeting of theCounter-Terrorism Committee

United Nations, New York2012-11-20

The Need for Technical Assistance

• Growth of the NPO sector

• FATF Recommendation 8

• Lack of knowledge and understanding on the threat of terrorism financing abuse of the NPO sector

• A need to identify and implement solutions

Project Goals

• Develop a common understanding of sound regulatory approaches to counter the risk of terrorism financing to the NPO sector

• Identify how states can best balance different policy objectives to achieve effective regulation

• Things to balance:– Transparency and Privacy– Accountability and Proportionality– Enforcement and Self-Regulation

Events

London Meeting – January 2011Bangkok – March 2011Auckland – November 2011Nairobi – March 2012Buenos Aires – November 2012Qatar – January 2013

New York Meeting – March 2013

Nature of the Problem

• If terrorist groups are abusing the NPO sector, where are the doorways into the sector?

1. Finances2. Operations3. Material Resources4. Personnel

• Important to understand how the NPO sector is exploited in order to develop and use appropriate regulatory tools to combat its abuse

Areas of NPO Sector Vulnerability

Case Study

Former VP and current President

Former President and current Accountant

1) Some of the other organizations which Organization A issupplying funds to are believed to be connected to terrorist groups

2) Accounts used for money laundering

3) Persons 1 and 2 had both been involved in a money laundering conspiracy

1) Audit conducted reveals one of Organization A’s accounts is used for money laundering

2) Audit also reveals that unreported funds have been transferred through a special accounts

3) Information from the intelligence community reveals that Organizations B and C have terrorist links

Key Findings

• Need for a risk-based approach

• Need for a collaborative approach– Between government ministries– Between jurisdictions– Between governments & NPOs

• Need for training– Risk assessment– Outreach– Investigative techniques

The NPO sector is part of the solution…Not the Problem!

Next Steps• New York Experts Meeting (March 2013)– Insights into the Application of R.8– Broadening the Understanding of the Risk

• Further Regional Events– South Asia– Western Africa– Southern Africa

• Training– Identify and Develop Training Materials– Facilitate Regional and Bilateral Training events

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