Many Australian charities operate in, or send funds to, conflict zones and other unstable regions. These are challenging environments, not only for service delivery but also for establishing and implementing governance structures and financial controls.

Charities have a vital role to play, but we must remain mindful of the risks they face at home and abroad. Charities therefore need to ensure they understand their risks and manage them accordingly.

The Australian Charities and Not-for-profits Commission (ACNC) and AUSTRAC, in collaboration with our industry and government partners, have prepared this assessment to better understand the risks faced by the NPO sector.

The assessment has identified that Australian NPOs remain vulnerable to the risk of money laundering and terrorism financing and industry needs to be aware of these risks. While proven instances of money laundering and terrorism financing in the NPO sector remain low, this illicit activity could severely damage public trust and confidence in NPOs, and harm the communities they are working to assist.

This assessment will improve the NPO sector’s own risk awareness and help NPOs to protect themselves from fraud and criminal activity. In light of the assessment’s findings, we encourage NPOs to improve their safeguards by implementing good governance and controls.

Identifying and reducing money laundering and terrorism financing risks will continue to be a priority for the ACNC and AUSTRAC. The findings of this risk assessment will enable us to refine the risk-based approach we take to the regulation, supervision and monitoring of the NPO sector.

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