Report highlights exposure to terrorist financing

Growing international concern about South Africa’s role in the financing of terrorists and terrorist acts in the region contributed to the country being greylisted by the Financial Action Task Force (FATF) in February 2023. A Business Day report says one of the findings of a 2021 report by the FATF was that local authorities had a poor understanding of terrorist financing and that the risk of terrorist financing through SA was not being adequately addressed. It was in response to this, as well as growing concern that SA was not only used as a conduit but also a source of funding for terrorist groups that the Financial Intelligence Centre (FIC), in partnership with SARS and the Department of social Development, compiled a report that assesses the exposure of non-profit organisations (NPOs) to terrorist financing risk. This report – published last week – forms part of SA’s follow-up action plan to address greylisting by the FATF. ‘Understanding and regularly assessing the particular terrorist financing risks to which SA NPOs are exposed remains the best measure to effectively combat their abuse and exploitation,’ said the acting director of the FIC, Pieter Smit. The assessment would enhance authorities’ understanding of the risks of terrorist financing faced by NPOs. ‘The findings will help us formulate measures to prevent or mitigate the abuse of NPOs for terrorist financing purposes,’ he said. The assessment, which included a survey of 301 NPOs, identified five possible terrorist financing threats: Islamic State and its affiliates in Africa; al-Shabaab and its affiliates in Africa (including al-Sunnah Wa Jama’ah; Nigerian terrorist groups (including Boko Haram); domestic right-wing extremists; and al-Qaeda. The report recommends that SA implement a more targeted approach to dealing with higher-risk NPOs.

Full Business Day report