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High risk of terrorism financing through charities: report

by August 10, 2016 General

Bali: Justice Minister Michael Keenan has urged Australians to ensure they are donating to legitimate charities after a report revealed there was a high risk of terrorism funding being channelled through non-profit organisations.

The warning comes days after the Department of Foreign Affairs and Trade suspended the funding of World Vision programs in the Palestinian Territories after Israel claimed the head of the charity in Gaza was bankrolling Hamas.

Mohammed al-Halabi, right, is seen talking to children in his work as Gaza program manager for World Vision. He has been ... Mohammed al-Halabi, right, is seen talking to children in his work as Gaza program manager for World Vision. He has been accused of funnelling the charity’s donations to the Palestinian Islamist movement Hamas. Photo: World Vision International

“We do make very large donations to charities and the nature of that money is that a lot of it goes overseas,” Mr Keenan said at a counter-terrorism summit in Bali.

“So clearly that is something that we need to be concerned about and we have seen an example highlighted in the Middle East as recently as this week that some of that money can be diverted to the wrong purposes.”

Mr Keenan said there were ways of verifying that charities were legitimate, suggesting the Australian Charities and Not-for-Profits Commission (ACNC) was a good first stop.

Paul Jevtovic, the chief executive of Australia’s financial intelligence agency, AUSTRAC, said not-for-profit organisations were often legitimately sending money to trouble spots around the world to help civilians who had suffered.

“Unfortunately intelligence tells us that some of these funds do not get to their intended destinations and are in fact hijacked by terrorist groups and used for propaganda and/or actually committing terrorist acts,” he said.

The world-first regional risk assessment of terrorism financing in South-east Asia ranked non-profit organisations as the second highest risk for raising terrorist funds.

“In Australia, two cases from the mid-2000s involved community-based non-profit organisations that raised close to $A1 million each, which was funnelled to foreign-based terrorist groups,” the report said.

“Australia has also experienced suspicious ‘pop-up’ non-profit organisations that appear to dissolve after raising funds for ‘humanitarian efforts’ in Syria and Iraq.”

The report, which examined Australia, Malaysia, Singapore, Indonesia, Thailand and the Philippines, found self-funding from legitimate sources posed the highest risk for raising terrorist funds in all countries except the Philippines.

The risk assessment was a collaboration between AUSTRAC and its Indonesian counterpart with input from the four other nations.

It said funds were mainly derived from legitimate sources such as income, sale of personal items, credit cards, loans or welfare payments.

Detection of self-funded terrorism activities is very difficult because the amounts of money are usually small and the sources legitimate.

The report found that in Australia and Malaysia, self-funding was primarily used for planning and staging small-scale attacks or to fund travel by would-be militants.

“We do know that very small amounts of money can finance terror attacks and we have sadly seen that here with the small sums that were moved into Indonesia to finance the attacks here in Bali,” Mr Keenan said.

“We need to do absolutely everything we can to make sure we have robust mechanisms to identify that funding so the countries in the region can work together.”

About 110 Australians and 568 Indonesians are currently engaged with terrorist groups in the Syria-Iraq conflict, mostly associated with Islamic State.

“The international forces driving extremist ideology and capabilities are becoming more sophisticated, with extremist narratives particularly from [Islamic State] resonating with small sections of the Australian community,” the report says.

Mr Keenan said Australia would also look at stored value cards, following revelations that jihadists used prepaid credit cards in the 2015 Paris attacks.

Strengthening the regulation of stored value cards was a key recommendation to come out of a review into Australia’s anti-money laundering and counter-terrorism financing legislation, which was tabled in Parliament in April.

The review also recommended reforms to Australia’s ability to track and disrupt the movement of cash across borders that may be used to fund terrorist activities, better sharing of information with the private sector and the regulation of e-currencies such as bitcoin.

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