Typologies studies by the Financial Action Task Force, (FATF), an intergovernmental body, have identified a number of instances throughout the world in which the mechanism of fundraising i.e. the collection of resources from donors and its redistribution for charitable purposes has been used to provide a cover for the financing of terror. Often the abuse of non-profit organisations (NPOs) occurred without the knowledge of the donors or even members of the management and staff of the organisation itself due to impropriety by employees and/or managers diverting funding away from the legitimate beneficiaries.
Donors to non-profit organisations may expect that the organisation to which they are contributing is well managed and has in place effective controls and oversight. Experience in the Turks and Caicos Islands indicates that the likelihood of a non-profit organisation falling victim to crime ranging from petty misappropriation of funds to the financing of terror is relatively slim. However despite the relatively low risk of occurrence if such an event did take place the effect on that particular non-profit organisation, and its beneficiaries could be catastrophic. Indeed the impact of one proven case involving a non-profit organisation is potentially significant for public trust and confidence in the organisation and the sector as a whole.
The Turks and Caicos Islands Government is committed to meeting international standards in the fight against money laundering and combating the financing of terrorism. It is important for the international reputation of the Turks and Caicos Islands that the country does not fall behind in its compliance with evolving international standards. The Non-Profit Organisation Regulations 2014 address the guiding principles recommended by the FATF. Such principles include financial transparency, accountability, and a Know Your Beneficiary and associated NPOs approach.