Financial Crime World

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Terrorist Financing Risks and Mitigation Strategies in South Africa

Pretoria - The South African government and private sector partners have launched a new report on terrorist financing risk assessment in the non-profit organisation (NPO) sector, aimed at mitigating identified risks.

Report Launch

The report was launched yesterday and today, in line with Financial Action Task Force (FATF) global standards to combat money laundering and terrorist financing, as well as South Africa’s follow-up action plan to address grey listing by the FATF in 2023.

Assessment of Terrorist Financing Risks

According to Acting Director of the Financial Intelligence Centre (FIC), Pieter Smit, understanding and regularly assessing the particular terrorist financing risks to which NPOs are exposed is key to effectively combating their abuse and exploitation.

“The assessment will augment our understanding of the risks of terrorist financing faced by NPOs in South Africa. The findings will help us formulate measures to prevent or mitigate the abuse of NPOs for terrorist financing purposes,” Smit said.

Identified Risks

The risk assessment identified five main terrorist financing threats that have the potential to exploit NPOs, including:

  • Nature of exploitation: Terrorist groups may use NPOs as a cover for their activities.
  • Inherent vulnerabilities: NPOs may be targeted due to their lack of resources and capacity to implement effective risk management measures.

Recommendations

The report makes recommendations for a more targeted approach to dealing with NPOs at a higher risk of terrorist financing and inherent vulnerabilities identified. Convenor of the technical team, Bernice Bissett, said the assessment is a collaborative effort between government partners, public and private sector organisations, NPOs, and umbrella organisations.

“We can be very proud as a country, and as stakeholders and members of the South African NPO sector, as I believe this is just the start to the collaboration between the various private and public sector partners with the NPO sector,” Bissett said.

Partnership and Collaboration

The report was developed in partnership with the European Union Anti-Money Laundering/Counter Terrorist Financing Global Facility (EU AML/CFT Global Facility) using a methodology provided by Greenacre Group. EU AML/CFT Global Facility team leader, David Hotte, congratulated South Africa for successfully completing its terrorist financing risk assessment of the NPO sector, hailing it as a crucial stride towards a more informed and balanced approach in mitigating potential risks.

Availability of Report

The report is now available for download on the FIC website. For more information, please e-mail [email protected], [email protected] or [email protected].