Kenneth Rijock

Kenneth Rijock

Friday, August 5, 2016

BANKS HANDLING ACCOUNTS OF AMERICAN NONPROFITS WITH POSSIBLE MIDDLE EASTERN FUNDING SOURCES SHOULD EXAMINE DONORS CAREFULLY



The growing affiliation, between African-American activist groups, and Palestinian organizations, raises the issue of potential risk, regarding their unwitting receipt of donations from front organizations that may be controlled by OFAC-sanctioned global terrorist organizations. A recent visit by one of these groups, to the Palestinian Territories, reminds us that donations which they may receive, from Middle Eastern sources, require close attention, lest the organization accept funds from a sanctioned entity, while not being aware of the circumstances. While such organizations have the right of association with any group or individuals, donations from abroad pose a threat.

 Financial institutions who bank these American activist groups should be aware that many nonprofits do not have a functional AML/CFT compliance program, nor a designated compliance officer, which raises the risk that funds donated may have possibly originated from a sanctioned entity, which requires that they be blocked. Compliance officers in The US should remember that such sanctioned groups as HAMAS have utilized front companies here.

Though not required by law or regulation, all nonprofits who accept donations, especially from abroad, should create, and maintain, an effective compliance program, both for their benefit, and for that of the financial institution where they maintain their accounts. These groups should be encouraged to create such a program, and given information regarding the resources available for that purpose.

 Banks who handle these nonprofits as clients should monitor incoming funds, and deposits, where the donor entity, or individual, is located in a region where there are a number of OFAC-designated organizations,

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