ASHM embraces a risk- based approach to managing compliance, ensuring adequate controls are implemented to combat, detect, and report potential money laundering and financing terrorist activities.
As at August 2017 AUSTRAC and the Australian Charities and Not-for-profits Commission (ACNC) assess Anti-Money Laundering (AML) and Counter Terrorism Financing (CTF) risks affecting Australian NPOs as Medium (this assessment remains valid for this 2021 policy review.) This is primarily based on suspicious matter reporting, the number of investigations into predicate crimes involving NPOs, and anecdotal insights from sector representatives regarding levels of criminal exploitation.
The key threats facing the NPO sector are fraud and theft of resources. General factors that increase any NPO’s vulnerability to money laundering or terrorism financing include:
- poor understanding of the risks of money laundering and terrorism financing
- poor due diligence on key personnel, volunteers, partners and beneficiaries
- inexperienced staff
- lack of formalised training and ongoing professional development
- poor record keeping
- weak internal controls
- poor transparency and accountability of the end-to-end funding cycle
- beneficiaries or operations in countries with poor AML/CTF regimes
- beneficiaries or operations in conflict or post-conflict regions
- beneficiaries or operations in dispersed ethnic communities in Australia, with strong links to high-risk countries (specific to terrorism financing only).
The purpose of the Policy is to confirm ASHM’s commitment to dealing with AML and CFT risk and to outline the key rules that underpin this commitment.
Money Laundering is the process of concealing the existence, illegal source or application of income from criminal activity and the subsequent disguising of that income to make it appear legitimate. Money laundering is just as serious as the underlying crimes that generate the money that is laundered.
Terrorism financing refers to activities that provides financing or financial support to individual terrorists or terrorist groups.
ASHM generally receives funding from government bodies, well known international agencies or companies with which it has previously done business.
Any money received from sources that do not fit this profile will be investigated in accordance with acknowledged ‘Know Your Customer’ procedures. Specifically, in such cases, checks will be performed against the Criminal Code list of terrorist organisations and the DFAT consolidated list of individuals and entities subject to targeted financial sanctions, as per the following:
(List updated 19 April 2021)
All checks against prohibited entity listing will be documented as part of ASHM’s due diligence checks for new contracts. Where relevant, partner organisations will also be informed of the requirement to perform similar checks.
ASHM will maintain strong controls over its expenditure, as documented in its Fraud Management and Segregation of Duties policies, to ensure it knows where funds are being dispersed and that payments related to approved activities are supported by a contract which has undergone due diligence processes.
Finance staff are trained on AML/CTF risks and threats to assist in identifying any unusual transactions.
Any unusual activities, receipts or payment requests which might indicate AML/CTF activity will be escalated immediately to ASHM CFOO and thence to relevant regulatory bodies for further investigation.
ASHM will adhere to any AML/CTF directives imposed on it by relevant regulators.
ASHM performs police checks on all new employees.
Whilst ASHM provides services in countries with poor AML/ CTF regimes, all staff are based in Australia and the supervision and management of all service contracts, as well as its banking and finance operations, are performed in Australia.
ASHM Board – Approved 17 June 2021