Lina Alexandra Garzón’s Final Project tries to answer the question of what are the basic elements that any prevention system has to have in order to prevent asset laundering and terrorism financing through non-profit organisations. Her answer is divided in 6 ways to address the problem.
18 october 2018
Title: Prevention System for asset laundering and terrorism financing through non-profit organisations in Colombia
Author: Lina Alexandra Garzón Vargas
Currently the asset laundering and terrorism financing have spread and created troubles in economy and society values. At first sight only big economic structures like real sector companies or entities of the financial system are involved in this crime; however this also affects non-profit organisations.
Colombia’s current situation during the last few years, result of the military conflict and drug trafficking, calls for a major development of the internal regulation in order to prevent asset laundering and terrorism financing (AL/TF, from now on). Furthermore, the National Evaluation of the Risk of Asset Laundering and Terrorism Financing in Colombia from 2016 shows that one of the most viable sectors for criminal organisations as a means to commit this kind of crimes is that of the non-profit organisations; which highlights the absence of regulation and guidelines on the matter that help develop prevention systems within this vulnerable sector that can be improved for citizens as well as for the State.
What are the basic elements that any prevention system has to have in order to prevent asset laundering and terrorism financing through non-profit organisations?
When we stop and think about the features and the poor development of a prevention system the following question comes up: What are the basic elements that any prevention system has to have in order to prevent asset laundering and terrorism financing through non-profit organisations?
In order to identify the key elements and stages in a prevention system for AL/TF in non-profit organisations, current examples in other sectors of the country were analysed, as well as their regulation. If we take these systems as models it is clear that the following 6 stages are key:
The first one is the diagnosis. This alludes three main features: exhaustive knowledge about the organisation, its relevance inside the process and evaluation of the possible risk factors for it.
On the second stage, risk recognition risk factors have to be kept in mind and their possible unfavourable results, analysed and evaluated on the previous stage. The third stage is the search for risk measurement. In this stage all the risk factors are evaluated and a word in a risk scale is assigned to them.
A Risk Handling Plan has to be created
In order to take necessary measures for risk decreasing or removal (stage 4), already existing control measures in the entity must be identified in order to establish if they are effective enough. A Risk Handling Plan has to be created after that. This has to be complemented with a monitoring system following the principle of the opposing party. Besides, the information of third parties that could have an involvement with the organisation must be preserved. Said principle is upheld through consultation to registers published by international or national entities, in which legal or natural people who might be related with AL/TF are included. Consequently, from the correct use and performance of these tools emerges the duty to report any suspicious activities.
The organisation can conveniently provide information to the competent authorities
On the stage of disclosure and communication, the fifth stage, internal and external reports are needed in order to guarantee the delivery of information from the organisations to the competent authorities, the ability of their workers to report unusual information and the knowledge of the prevention mechanisms and system.
Last but not least, on the sixth stage, the Monitoring or Tracking, the idea is to see whether the objective is being accomplished or not and to determine the need for new models. This creates a cycle that has to be checked periodically.
Cyclical and wise monitoring of these six stages will guarantee that the organisation possesses the key elements for risk prevention before AL/FT crimes, showing effective responses on the possible event of materialisation of these crimes. This will make an appropriate mechanism for the fight of the State against these crimes and their disastrous results, that have a real impact on the political, social and economic sectors of the country.
