Red flag indicators of suspicious financial activity are valuable tools for detecting potentially illicit behaviour linked to terrorism financing (TF), money laundering and other crimes. This report provides a set of red flag indicators related to non-profit organisations (NPOs) at high risk of misuse for TF in South-East Asia, Australia and New Zealand.
These indicators should particularly help reporting institutions, as well as national authorities and NPOs, to better identify and mitigate suspicious activity potentially linked to TF in the region.
This report reflects input from the financial intelligence units (FIUs) of the eight countries involved in producing the Non-profit organisations and terrorism financing: regional risk assessment 2017(‘NPO assessment 2017’).1 The indicators are informed by case studies and intelligence from regional FIUs, law enforcement and NPO regulators. Financial institutions that handle NPO finances and have obligations to report suspicious activity also provided input.
As a group, the eight FIUs collected and analysed a large body of information to identify primary and secondary red flag indicators. Primary indicators are likely to be present in cases where NPO misuse for TF has occurred. Secondary indicators point to more general suspicious activity that requires other information, or enhanced due diligence, to support suspicions of NPO involvement in TF (or potentially other crimes including money laundering). In the absence of information to the contrary, primary and secondary indicators when combined should strengthen the grounds for filing a suspicious transaction report (STR)2 with the national FIU.
To maximise its value, this report should be read in conjunction with the NPO assessment 2017. This is important for understanding the general risk context that exposes some NPOs in the region to potential TF misuse.