Protecting Charities: New Measures to Safeguard Against Money Laundering and Terrorist Financing
In a move to strengthen governance capabilities and enhance public trust, the Office of the Commissioner of Charities (COC) and Charity Council have introduced a suite of new initiatives aimed at protecting charities from being misused for money laundering and terrorist financing.
Introducing the Screening and Consultancy Panel
- The new panel, established by the Institute of Singapore Chartered Accounting (ISCA) and the Office of COC, will offer due diligence screening services for charities at a subsidised rate.
- This screening service will help charities conduct checks against sanction lists, watchlists, and negative news reports to prevent exploitation for illicit purposes.
- Additionally, ISCA’s members and firms will review the screening results for charities if necessary.
Consultancy Services for Risk Mitigation
- The panel will also provide consultancy services to help charities identify and assess risk areas in their operations and funding sources.
- These services will assist charities in drafting procedures to mitigate potential risks of abuse for money laundering and terrorist financing.
Guidance Template and Playbook for Charities
- Law firm WongPartnership LLP will collaborate with COC to develop a guidance template on policies and procedures to safeguard charities against risks of abuse.
- Charities with overseas beneficiaries can access enhanced due diligence screening services from TT Foundation Advisors, Temasek Trust’s philanthropy advisory arm, starting early 2025.
- Minister for Culture, Community and Youth Edwin Tong announced a new playbook offering practical steps to support charities in adopting Environmental, Social, and Governance (ESG) practices.
Importance of ESG Practices
- ESG principles play a crucial role in safeguarding organizations against future risks and have gained significant importance among investors, policymakers, and key stakeholders.
- Charities demonstrating strong ESG commitments are more likely to attract donors and beneficiaries who prioritize social impact.
Analysis:
In today’s financial landscape, the protection of charitable organizations from money laundering and terrorist financing is of paramount importance. The newly introduced screening and consultancy panel, along with the guidance template and playbook, aim to enhance the governance capabilities of charities and build public trust.
By conducting due diligence screenings and identifying risk areas, charities can proactively mitigate the potential risks of abuse for illicit purposes. The emphasis on ESG practices not only safeguards organizations against future risks but also attracts stakeholders who value social impact.
Overall, these initiatives serve as a proactive approach to ensuring the integrity and transparency of charitable organizations, ultimately benefiting both the organizations themselves and the communities they serve.