Banking Non-Profit Organizations (NPOs)—How Financial Institutions can Avoid Wholesale De-Risking NPOs by Mitigating Money Laundering and Terrorist Financing Risks Posed by the Sector

Author: Chris Galloway, CAMS-FCI

The main focus of this paper is to present a risk framework that FIs can adopt in order to provide services to legitimate NPOs and to outline the following AML/CTF areas and how they relate to NPOs:

  • Building a Risk-Based-Approach – How FIs can avoid a one-size-fits-all approach to risk rating NPOs.
  • Risk Mitigation for NPOs – What internal controls, generic risk mitigation and risk focused measures are applicable when conducting business with NPOs?
  • Ongoing Monitoring for NPOs – What transaction monitoring strategies apply to NPO business on a product, geographic or client level?
  • Enhanced Due Diligence (EDD) for NPOs – What EDD tasks can be used to obtain information to further mitigate or explain activity?

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