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Terrorist organizations obtain their financial resources from both illegal and legal sources. In this context, non-profit or non-governmental organizations (NPOs / NGOs) can pose a potential threat. These organizations, such as registered associations, foundations and non-profit limited liability companies, can be misused by criminals for the purpose of financing terrorism or can be founded and used specifically for this purpose:

• NGOs can be infiltrated by extremist-minded individuals who embezzle funds and make them available specifically to terrorist organizations.
• NGOs can unwittingly finance terrorism by paying money to unrecognized terrorist organizations in an effort to support aid projects in areas controlled by these organizations.
• NGOs can also be deliberately created and used to raise funds for terrorist organizations and disguise the activities of these organizations.
• In addition, NGOs can be used specifically to collect donations of money and goods and to organize events in pursuit of terrorist goals. The fact that these organizations are legally classified as non-profit organizations increases the trust placed in them.

Concealing the true intentions of such "charitable" organizations, which in reality serve terrorist purposes, has enabled criminals in the past to enter war and crisis zones under the guise of aid convoys, for example. In this regard, the sectoral risk analysis of the Federal Ministry of the Interior states that "a humanitarian project in the target area of a terrorist organization can legitimize the journey of a money courier with the funds he is carrying or so-called aid convoys for the transport of material goods".

The risk of an NGO being unwittingly misused for terrorist financing depends heavily on various factors. Within the large NGO sector, vulnerability is mainly concentrated in organizations with certain types of activities in specific environments. For example, NGOs that provide financial support or direct humanitarian aid, particularly in areas with high levels of terrorist group activity, are significantly more vulnerable than those that primarily engage in lobbying and campaigning. However, if cases become public in which, for example, donations have been misappropriated to finance terrorism, the damage goes far beyond the NGO involved.

For companies that work with NGOs as part of their ESG activities, for example, there is a risk that the funds provided could fall into the wrong hands for the reasons described above. This not only entails the risk of terrorist financing. There may also be implications with regard to sanctions and embargoes if funds or material resources flow to sanctioned persons or organizations.

To combat the financing of terrorism, German lawmakers are focusing on prevention measures and criminal prosecution.

The measures to prevent terrorist financing go hand in hand with the mandatory measures to combat money laundering and future sanctions compliance. Depending on the status of the obliged entity, different requirements for the prevention of money laundering and terrorist financing must be met. These include, among other things, the reporting of identified suspected cases. In order to meet the requirements of the German Money Laundering Act (GwG) and the new EU legislation in this area, responsibilities must be defined and employees must be trained and appropriate processes for identifying and reporting suspected cases must be set up.

In principle, NGOs are not subject to the obligations under money laundering law, which is why it cannot be assumed on the part of the donors that the respective NGO has implemented sufficient preventive measures in this regard. Nevertheless, there is a risk for NGO managers and employees of being prosecuted for money laundering (Section 261 StGB), terrorist financing (Section 89c StGB) or other criminal offenses if they are actually involved in criminal activities.

Business partners, but also recipients of donations or other support services, should therefore be continuously examined and evaluated for risks of money laundering and terrorist financing.

Irrespective of the obligations arising from the AMLA, companies are also obliged to comply with financial sanctions and embargo measures. This aspect is of great importance in the fight against terrorist financing, as many terrorist organizations and individuals associated with them are subject to sanctions in order to make their financing more difficult. NGOs should therefore also regularly and continuously monitor their transactions and business relationships in this regard.

ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø's Forensic division supports you in meeting your obligations to prevent money laundering and terrorist financing and to comply with sanctions. This includes carrying out an appropriate risk analysis, setting up effective processes and measures and conducting internal investigations.

We also offer you a forensic data analysis of your transactions and business relationships in order to identify anomalies and potential sanctions and embargo violations.

If you are already working with NGOs or are planning to do so, we will support you with comprehensive open source research and analyze your existing and planned business relationships to identify the associated risks of terrorist financing and money laundering.