NPOs’ money laundering and terrorism financing risks

Money on clothes line

Australian non-profit organisations (NPOs) face a ‘medium’ level of risks for both money laundering and terrorism financing, a new report warns.

The report, released by Australia’s financial intelligence agency, AUSTRAC, and the Australian Charities and Notfor- profits Commission (ACNC), states that while proven instances of money laundering and terrorism financing in the NPO sector remain low, this illicit activity could severely damage public trust and confidence in NPOs, and harm the communities they are working to assist.

‘Charities are crucial in getting funds into conflict zones and other unstable regions, and this is not without heightened risk,’ says ACNC Commissioner Susan Pascoe, noting that all charities needed to understand these risks and have robust risk-based governance practices to prevent criminal misuse.

According to the report, the key threats facing the NPO sector are fraud and theft of resources, with a low level of money laundering and tax evasion also detected.

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