Non-profit organisations at risk of terrorist infiltration and exploitation, AUSTRAC warns


November 07, 2018 17:29:41

Non-profit organisations operating in Australia and throughout South-East Asia are vulnerable to terrorist infiltration and exploitation, according to financial intelligence agency AUSTRAC.

In its first report on the subject, AUSTRAC — the Australian Transaction Reports & Analysis Centre — said links had already been identified between terrorist groups and NPOs in Australia.

“Australia has identified suspected links between NPOs and foreign terrorist groups, mainly ISIL [Islamic State] and its affiliates,” AUSTRAC said.

AUSTRAC classified the risk to Australian NPOs as “medium”, putting it on the same level as the Philippines, Malaysia and Thailand.

Indonesia was rated as the nation with the highest threat in the region, while New Zealand had the lowest overall rating.

“Radicalised individuals in Australia associated with violent extremism may be loosely linked to a small number of NPOs, but it is unlikely NPOs are funding or supporting any domestic terrorist activities,” AUSTRAC said.

The “Not for Profit Red Flags Report” was released at the Counter Terrorism Financing Summit being held in Bangkok and attended by financial intelligence units (FIUs) from throughout the region.

AUSTRAC said while NPO links to domestic, regional and international terrorist groups varied across regional countries and could be hard to determine, ties to Islamic State (IS) — both inspired and directed — were detected or suspected in several cases.

“NPOs are mainly victims of misuse, rather than set up as a sham or fake NPO for terrorism funding purposes. In several cases, terrorists or their supporters have infiltrated or manipulated an NPO,” AUSTRAC said.

Use of legitimate banks

AUSTRAC said two counter-terrorism funding investigations had been launched in Australia related to NPOs, while a further 27 suspicious transaction reports (STRs) had been made.

Indonesia dealt with almost 300 terrorism-funding investigations resulting in 39 convictions.

Generally, terrorism funding via NPOs primarily use established and trusted channels to raise and transfer funds.

“This usually involves legitimate banks and remitters. However, there are signs of some use of less visible channels such as crowdfunding and online payment platforms,” the report found.

“Indonesia sees growing social media misuse and considers it could displace NPOs as a key channel.”

The Marawi siege in the Philippines points to another possible development in terrorism-funding methods in the region according to AUSTRAC.

“Similar to ISIL when it controlled large areas in Iraq and Syria, control over the city of Marawi provides opportunities to raise revenue through looting cash and other assets,” AUSTRAC said.

“If Philippines ISIL-affiliated groups were to seize more territory, access to assets under their control may, at least temporarily, offset their need for external financial support.”

Service organisations targeted

AUSTRAC said high-risk NPOs were more likely to be “service style” organisations — involved in housing, social services, education, and health care — rather than “expressive” organisations involved in religious activities, sports and recreation, arts and culture.

Other key characteristics of high-risk NPOs include:

  • high cash intensity
  • public donations are the main source of funds
  • support a particular ethnicity or religion
  • based in provincial or capital cities rather than rural or border areas
  • operate in, or send or receive funds/goods to and from, high-risk jurisdictions

The study identified more than 890,000 NPOs operating in the region, not including unregistered or unregulated organisations.

The number of NPOs in each country ranges from 482 in Brunei to almost 337,000 in Indonesia.

As AUSTRAC points out, with assets valued at $5 billion in Malaysia and over $275 billion in Australia, the NPO sector is economically significant in a number of countries.






First posted

November 07, 2018 17:14:54

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