NPOs Prone To Money Laundering, Terrorist Funding
Lesedi Mkhutshwa | Monday May 27, 2019 12:49
He was speaking at the Societies Pitso for NPOs, which was held recently at Adansonia Hotel to address issues of registration of a society, compliance to the societies act, ML/TF, tax evasion and records management.
The event is the second of its kind nationally and comes after the Financial Action Task Force (FATF), a global anti-money laundering organisation, placed Botswana under high-risk countries.
When giving a keynote address Ngaka said the government is concerned about ML/TF, which in most cases target organisations, which play a significant role in national development and communities.
He said ML/TF often target faith-based organisations such as churches, football clubs, human rights organisations and other NPOs to clean their dirty money.
He elaborated that some of these ML/TF are afraid of using border points of entry or depositing huge amounts of money in banks as they will be detained for questioning by the relevant authorities.
Therefore, Ngaka added that for the ML/TF to make the illegal money licit, they would use churches by giving them the money as part of their offerings, plant a seed or tithe and football teams are also vulnerable, as they would be given expensive football kits.
He said a lot of money from church offerings would then be mixed with illegal money attained from drugs or other illegal activities and deposited at the banks as part of the church turnarounds so that the dirty money can be untraceable. Ngaka said some false prophets are no longer afraid to use neither the word of God nor place of worship to deceive followers after receiving ML/TF.
He further said some NPOs’ behaviour, especially church leaders, has made it easier for them to be used as a front for terrorist organisations that raise and transfer funds or as legitimate enterprises that indirectly support the aims of terrorist organisations.
Ngaka also raised that NPOs lack of institutional capacity and resources to operate. He noted that funds from donors or members are sometimes poorly managed thus in order to ensure effective and proper management of resources, good governance becomes an important aspect of every NPO.
Ngaka said other challenges identified include lack of leadership accountability, lack of authority by the leadership, lack of accountability by the members to keep their leadership accountable for their action or inaction.
He also said that overall this has resulted in disintegration, internal conflict, mismanagement, abuse of office and general participation in decision making processes by all stakeholders.
He pointed out that Botswana as a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESSAMLG) is expected to submit reports on compliance with FATF recommendations.
He said that in light of the developments his Ministry undertook a risk assessment amongst registered NPOs so that they could identify measures that would control any dealings of money laundering and terrorism as well as to protect their societies against any infiltration and to avoid them being used as conduit transition points of ML/TF.
He said that according to TATF report many of the NPOs have been noted not to comply with some of the financial intelligence requirements.
He said that failure to take appropriate interventions would render Botswana blacklisted in the international financial transactions by world economies.
For her part the second city mayor, Sylvia Muzila said NPO leaders should refrain from accepting any illegal financial donors and make sure it is always legal money before accepting it. She said that nowadays there is escalating numbers of NPOs, especially churches, which are at risk of being victims of ML/TF. Muzila added that some NPOs would accept illegal money knowingly because they are stranded and would want to cover up for their expenses.
She said in most cases fire churches are used for illicit ML/TF dealings.
“For instance some fire churches would accept a lot of money from donors and preach that the church has been blessed with P50 million.
The pastor will be aware that the money is from ML/TF,” she said.
“Beware followers of such mysteries and make sure that when you call the name of Jesus to thank God for church blessings for miracle money, it should be pure (clean money) not illegal.” She urged NPOs to stay alert and assist in fighting ML/TF for the betterment of the community against such crimes.