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Authorities are investigating 50 NPOs for alleged money laundering and terror financing links as part of a national crackdown.
Picture: iStock
About 50 dubious non-profit organisations (NPOs) in SA are on the government’s radar for terrorist funding and money laundering.
“They are suspected of being used by foreign terrorist-supporting groupings to come here and recruit people, undermining the sovereignty of the country,” the department of social development’s acting director-general Peter Netshipale said.
It is part of government’s crackdown, following Financial Action Task Force (FATF) Recommendation 8 on NPOs.
Govt crackdown on NPOs
The department is the registrar and regulator of the non-profit sector.
“Recommendation 8 of FATF talks about the department supervising the work of non-profit sector in the country.
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“As the regulator for NPOs we are given a role to supervise and weed out suspected organisations in the sector, through a risk assessment guideline.
“In doing our work, we involve law-enforcement institutions like the SA Police Service, state intelligence and the Special Investigating Unit (SIU),” Netshipale said.
“As a department, we have the role of making the NPOs aware of the law and to always watch where the money is coming from – curbing money laundering and terrorist funding.
NPOs used to launder money
“The big problem is that some NPOs are utilised to launder money. There are instances where people deposit R7 million into an NPO bank account – only to withdraw it from the other side and not pay tax,” Netshipale said.
The Protection of Constitutional Democracy Against Terrorist and Related Activities Act defines a range of crimes relating to acquiring, owning, trading, using and making available any property or funds intended for use in support of terrorist activities.
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Terror financing is defined as the raising, moving, storing and use of legitimate and illicitly acquired funds for purposes of supporting and individual terrorist, organisation or operation.
“If you look at the national risk assessment that was done on terror financing, the phenomenon is not so widespread in South Africa,” said Ismail Momoniat, National Treasury’s deputy director-general overseeing the implementation of FATF recommendations.
“If you look at the national risk assessment that was done on terror financing, the phenomenon is not so widespread in South Africa.
Medium-risk country
“The assessment identified South Africa as a medium-risk country.
“In today’s world, we are expected to put up mechanisms to do risk assessments on not just NPOs and to conduct investigations where we identify threats.
“Among other roles, we should investigate and prosecute on terror finance cases.
“Law-enforcement agencies are supposed to act when there is any breaking of the law – one of the issues that FATF is assessing and what we had to report on.”
Momoniat hoped SA would be out of greylisting by October.
Hope that SA will be out of greylisting by October
“We have very few cases on terror financing. When you see the scale of corruption, the biggest problem is money laundering, with crime being about money in most cases.“You have syndicates and organised crime.
“Our FATF action item is for serious and complex cases of money laundering – the bigger problem that we face,” Momoniat said.
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“The NPA and the Hawks (the Directorate for Priority Crime Investigation) have been making good progress. “I hope outstanding cases will be ticked off by June, followed by an onsite visit.”
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