Illegal Int´l money transfer poses threat to NPO sector: Report

Illegal international money transfers and other criminal activities in the cross-border activities of non-profit organisations (NPOs) and the infiltration of criminals into legal activities posed threat to the organisations, according to the first national risk assessment of money laundering and terrorist financing for NPOs.

The assessment also was aimed at increasing awareness of the Finnish NPO sector among obliged entities specified in the Act on Preventing Money Laundering and Terrorist Financing, supervisory authorities as well as operators in the sector itself, said the Ministry of the Interior in a press release on Wednesday.

The risk assessment also made it easier for an individual NPO to identify the risk of money laundering and terrorist financing.

The risk assessment highlights, in particular, the importance of obliged entities taking a risk-based approach towards NPO customers.

The key vulnerabilities of the NPO sector relate to legislative problems in the exchange of information between public authorities, shortcomings in the transparency of NPO activities and deficiencies in the internal processes of NPOs.

From the terrorist financing perspective, the most significant risks in the sector can be found in unregistered associations into which the authorities have no window and which have a strong connection to organised crime.

Another significant terrorist financing risk is the increased use of unofficial payment channels and methods to transfer funds out of Finland used by certain religious and ideological associations identified by the authorities.

The third significant risk identified relates to urgent humanitarian aid provided by organisations other than the established humanitarian aid and development organisations specifically assessed in the risk assessment.

The Finnish NPO sector is very large and diverse with more than 110,000 registered associations and foundations.

The assessment also covers the activities of unregistered associations.

The risk assessment examines and analyses the entire NPO sector in Finland, taking into account the special characteristics of different NPOs as comprehensively as possible from the perspective of money laundering and terrorist financing risks.

The risk assessment focused on the operating environment of the sector and the identification of its threats, vulnerabilities and risks. It divides the broad NPO sector into 12 sub-sectors to facilitate more individual assessment of the actual risk level of individual NPOs.

The risk assessment also gives a great deal of weight to the sector’s own views when assessing money laundering and terrorist financing risks.

Finland’s national risk assessment is updated at least once every four years.