Overview

In 2013 an Australian national who was an alleged ISIL facilitator departed Australia for Syria. Prior to their departure, the individual solicited a significant amount of donations through an unregistered charity.

The charity purported the funds would provide humanitarian assistance to Syrian war refugees. Through the fraudulent charity’s Facebook page, donors were invited to make direct deposits and electronic transfers into the individual’s personal bank account held with an Australian major bank.

The account was closed by the Australian major bank after the individual publicly supported a terrorist organisation. The individual denied that the funds were used to support terrorist organisation.

Source: Case study extracted from the FATF publication "CROWDFUNDING FOR TERRORISM FINANCING"

Compliance Insight

Donations Solicited through Unregistered Charities: To reduce the risks associated with unregistered charities, it is important to ensure that all charitable transactions are associated with organizations that are registered with the local regulatory authority and are in good standing. Checking the status of the charity with local regulatory bodies can help prevent donations to unregistered or fraudulent charities, thus protecting against potential fraud and misuse of funds.

Donations Directed to Personal Bank Accounts: Collecting donations linked to charity or organisation through personal bank accounts poses a high risk of fraud and financial crimes. It is suggested to verify the medium through which the customer receives funds and ensure that all donations are directed to the official bank account of the registered charity. This practice reduces the risk of misuse and fraud, enhancing the integrity of charitable transactions.

Social Media Activity Indicating Extremist Support: To address concerns related to social media activity indicating support for terrorist organizations or extremist ideologies, it is advisable to implement a policy for reviewing social media posts for significant perceived risks. Additionally, training staff to identify and assess these risks as part of the due diligence process can help mitigate the potential misuse of donated funds for illicit purposes.