Sectoral Risk Assessment of Non-Profit Organisations
Non-profit organisations (hereinafter NPOs) play an essential role in the global economy by providing charitable services in the humanitarian, educational, religious, healthcare, sporting, cultural and research development sectors.
Despite the good works pursued by the vast majority of these organizations, it is well known that they are sometimes misused by terrorist groups and organizations. For this reason, the Financial Action Task Force (FATF) dedicates its Recommendation 8 (R. 8) and Immediate Outcome 10 (IO. 10) to preventing the financing of terrorism through NPOs. Thus, R. 8 establishes that countries must identify organizations that meet the FATF’s definition of NPOs and assess their terrorism financing risks. Furthermore, countries must establish targeted, proportionate measures aligned with the risk-based approach, without unduly disrupting or discouraging the legitimate activities of NPOs.
The first assessment of the sector’s risks was carried out in the 2020 National Risk Assessment, which included a specific section on NPOs. Although no specific analysis of the NPO sector was carried out in the 2024 Addendum to the National Risk Assessment, mention was made of the use of this sector to channel funds linked to terrorist organisations, where the fragmentation of transactions and the use of new technologies – such as instant messaging applications – are significant factors.
The publication of this document aims to provide a more in-depth sectorial risk analysis of these organisations, as well as to identify and understand the threats, vulnerabilities and risks of Terrorist Financing within the NPO sector in Spain
LINK: Sector specific analysis of terrorist financing risks through nonprofit organizations
The Ministry of Economy, Trade and Enterprise and the Treasury have organised a webinar with the aim of publicising the main findings of the risk analysis relating to non-profit organisations. Through this session, which will be entitled ‘The risk of Terrorist Financing in the third sector: misuse of NPO organisations and options for action’, the Government aims to help Third Sector organisations prevent themselves from being used for Terrorist Financing.