Prevention of money laundering and terrorist financing through money collection campaigns

Money collection is a major source of income for many non-governmental organisations.  The whole society benefits from non-profit organisations’ being able to raise funds to finance their operation in different ways. Money collection campaigns are one way for non-profit organisations to raise money.

However, there are also considerable risks involved in the running of money collection campaigns, extending even to organised crime and terrorist financing. 

Abuse of charities’ good reputation and people’s genuine desire to help is unfortunately common. Different forms of charitable work can be deliberately and systematically exploited for criminal purposes. This is why third-sector operators are also particularly exposed to criminal activity.

In practice, money collection campaigns of non-profit organisations can be used for criminal purposes, for example, by criminals masquerading as legitimate third-sector operators.  Criminal organisations can also attempt to use the work of legitimate charities for illegitimate purposes, such as money laundering or terrorist financing. This makes money collection and the work of associations in general vulnerable to those seeking to launder money or to finance terrorists. 

It is important to note that, in terms of terrorist financing, even small sums of money from different sources can make a big difference. Small amounts trickling in from multiple different sources can quickly build up a large sum for criminals. It is also good to remember that even modest amounts of money can do great harm in the wrong hands.

Importance of enforcement to prevent money laundering and terrorist financing

The authorities have a number of ways in which they can prevent money laundering and terrorist financing. Preventing money laundering and terrorist financing is also one of the objectives of enforcement. 

Enforcement of the rules governing money collection is designed to protect the organisers of legitimate money collection campaigns and their access to funding. Enforcement can help to detect criminal activity and therefore prevent abuse. Enforcement also helps to prevent the exploitation of charitable money collection and the use of legitimate money collection campaigns as means to finance illegal activity.

The Financial Action Task Force (FATF), which is an intergovernmental body operating in connection with the OECD with the aim of combating terrorist financing and money laundering, conducted a peer review of Finland in 2007 and published a mutual evaluation report. A second review was carried out in 2018, and a new report was published in 2019. Among the FATF’s findings on both occasions was that non-profit organisations in Finland had not been given sufficient instruction in combating terrorist financing. 

The links on this website lead to publications of the FATF, which contain information about, among other things, terrorist financing and efforts to combat terrorist financing. The publications also provide instructions for third-sector operators on best practices to prevent the exploitation of non-profit organisations for terrorist purposes.