Though there is no known public evidence of terrorism financing abuse of Non Profit Organizations (NPOs) in Kenya, there is a plausible terrorism financing threat.
According to Terrorism Financing Risk Assessment for Non-Profit Organizations in Kenya released yesterday, the NPOs operating in or near areas with an active terrorist presence were potentially vulnerable.
“There are also concerns regarding NPOs whose activities or location exposed them to communities or individuals who may be sympathetic to terrorist groups or supportive to terrorism causes,” the report states.
The assessment, which was commissioned by the Government of Kenya, is to conduct a comprehensive review to understand the features and types of NPOs that may be at risk of terrorism financing abuse and the nature of the potential threat.
It is also in line with the requirements of Financial Action Task Force (FATF) recommendations.
The ongoing international campaign against terrorism financing has identified global typologies where terrorists and terrorist organizations may exploit NPOs through collection, consolidation, transfer, dissemination and use of funds raised, and providing logistical support.
The assessment also identified four possible mechanisms for terrorism financing abuse of NPOs including using them to raise funds to support terrorist groups and operations; to conceal the movement or distribution of terrorist funds; and diversion of legitimate NPO resources to terrorism actors, either intentionally, unintentionally, or under duress.
Other concerns include NPOs engaged in activities, which may bring them into contact with terrorist groups or supporters, those with unverified or unverifiable funding sources, and also those with foreign funding sources.
To better address potential terrorism financing risks, the Public Benefit Organizations Regulatory Authority (formerly NGOs Co-ordination Board) should develop mechanisms to identify the specific NPOs that have been identified as being potentially ‘at risk’ of terrorism financing.
The Business Registration Services (BRS) should also review current registration and reporting systems for Companies Limited by Guarantee (CLGs).
The report also recommends that the Religious Organizations Bill be enacted, and the Religious Affairs Commission advised on the contents of this assessment.
“Kenya should develop a comprehensive, sustained, and targeted programme of outreach and engagement with NPOs to mitigate potential terrorism financing risks. NPOs should also consider adopting additional self-regulation measures to counter potential terrorism financing risks,” the report states.
During the period the Financial Reporting Centre (FRC) reported two investigations of NPOs, but no detail was provided on whether these related to terrorism financing. The Office of the Director of Public Prosecution however stated that there has been no investigation of NPOs for terrorism financing offences in the last five years.
The government has put in place various measures to continuously monitoring financial inflows to protect our country from the harm of money laundering and terrorism financing.
In May this year, the FRC directed that funds and assets owned or controlled by terror suspects will be frozen without delay nor prior notice.
The government has also enacted and adopted several laws that allow authorities to freeze all assets and funds, even those not tied to a particular terrorist act or threat.
Following the enactment of amendments of the United Nations Security Council 1718 Sanctions list, all Reporting Institutions and any other person who is authorized to detect, freeze or seize the funds or other assets of a designated entity must freeze funds owned by special entities.
A ‘special entity’ is a person or organisation suspected to have committed, attempted to, or prepared to commit a terrorist act.
In a Notice dated April 16, the FRC Director General Saitoti Maika said the authorities must also immediately verify whether the details of a designated person or entity match with the particulars of any customer, and if so, identify whether the customer owns any funds or other assets in Kenya.
This is in line with the obligations of the Prevention of Terrorism Act of Kenya and various United Nations Security Council Treaties and Resolutions on the prevention of terrorism and terrorism financing.
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