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AUSTRAC release NPO red flag indicators and announce a permanent external posting to China at the 2018 CTF Summit

Lots of exciting things happening this week from AUSTRAC with the 4th Annual Counter-Terrorism Financing Summit being held in Bangkok. They have just announced an external posting to China to add to existing postings in Indonesia, the Philippines and Malaysia. Yesterday also saw the launch of the Non-profit organisations & terrorism financing red flag indicators 2018 report which provides a set of red flag indicators related to non-profit organisations (NPOs) at high risk of misuse for terrorism financing in South-East Asia, Australia and New Zealand. AUSTRAC advises it should be read in conjunction with last year’s regional risk assessment, which was created with input from eight FIUs in the region and can be found here

Spoiler alert: the overall TF risk ratings remain largely unchanged and in line with the 2017 risk assessment of Medium. But this red flag report does provide some useful Primary and Secondary indicators for organisations to leverage when evaluating their NPO connections. It also calls out a ‘high risk’ subset, or series of factors that were present in the analysis of the case studies, 4 of which are presented in detail in the report. The subset includes:

  • more likely to be a service-style NPO
  • high cash intensity
  • public donations are the main source of funds—membership fees can also be important
  • support a particular ethnicity or religion
  • based in provincial or capital cities
  • operate in a high-risk country or have links to NPOs operating in a high-risk country
  • funds flows to and from a high-risk country.

If your organisation has an NPO vulnerability you should review this report and ensure your controls are up to date and reflective of the risks presented. Feel free to get in touch if we can help.

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