Global campaign to suppress terrorist financing needs effort of all

COLOMBO: The US Department of Justice organised a conference on preventing the abuse of charities for terrorist financing, money laundering and other serious crimes in Colombo from April 4-6.

The conference provided a forum for South Asian law enforcement professionals and fiscal authorities to share experiences and tactics in combating the abuse of charitable organisations with officials of the US Department of Justice, US Federal Bureau of Investigation, United Kingdom Charities Commission, and Australia's Asia Pacific Group on Money Laundering.

The Conference emphasised that the international campaign to suppress terrorist financing requires a sustained effort by all sections of society to promote the success of those forces working to build an effective response to abuse of charities within the legal framework.

The conference discussed international standards and best practices developed to address the prevention of money laundering and terrorist financing through the Non-Profitable Organization (NPO) sector and regional efforts to support effective implementation of the international standards for NPOs.

The conference deliberated on existing legal mechanisms and examined that extent to which the NPOs are monitored and supervised to prevent criminal misuse.

The conference commended Sri Lanka Government's efforts for the recent enactment of legislation for the Prevention of Money Laundering and the Financial Transactions Reporting Act together with the Suppression of Terrorist Financing Act which paved the way for Sri Lanka to be compliant with the international standards, which would deter criminals from using Sri Lanka territory and its financial institutions for anti money laundering activities.

Participants from Sri Lanka emphasised that as a country which has long confronted the serious challenge posed by terrorism, Sri Lanka's current focus was on effective measures to combat financing of terrorism particularly through front organisations abroad who raise funds for ostensibly charitable purposes and subsequent diversion for terrorist purposes and called for international cooperation to combat money laundering in this area.

It was also reiterated that the charitable sectors are more prone to abuse by terrorists and terrorist organisations and the Conference highlighted the importance of accountability and transparency of activities of so-called charities, the front organisations of terrorist outfits, with purported charitable objectives but provide sparse details of how funds are actually spent.

The conference also recognised that charitable activities conducted in Europe and US by some of the well established and prominent charities nurture terrorism rather than charitable purposes and the funds collected will be made available only to those who sympathise with the terrorist causes.

The conference also deliberated on recent cases involving terrorist financing and explanations given by charities for alleged misuse.

Matters relating to the monitoring of international relief aid for natural disasters in the wake of the tsunami in Sri Lanka and the earthquake in Pakistan were discussed. The importance of due vigilance in monitoring large influx of funds designated for relief to ensure that funds are not diverted for criminal purposes but channeled to those in need was emphasised.

The conference also paid attention to the recent survey conducted by the Central Bank on the foreign remittances received for tsunami relief activities by the 256 NPOs, where it was revealed that these non-profitable charity organisations received funds amounting to Rs. 40.1 billion by way of credits to their bank accounts from various foreign and local sources during 2005 and nearly 79 per cent of funds received in those bank accounts had been withdrawn, which is hardly proportionate to the work carried out by them.

The lack of adequate accountability and transparency was highlighted in this regard.