When the philanthropist is a terrorist : a comparative approach towards anti-money laundering procedures concerning voluntary organisations

Abstract

The general perception of a Voluntary Organisation, is the operation of an organisation by individuals who volunteer and work without remuneration. With this perception in mind, one cannot fathom how such organisations can be the target of money laundering activities and funding of terrorism and neither can one understand how donations could ever be the product of illicit funds. Therefore, it is clear that VOs should be given adequate tools to combat ML and the FT. The main legal instruments regulating anti-money laundering and funding of terrorism are Chapter 373 of the Laws of Malta and Subsidiary Legislation 373.01, the latter implementing European Directives. However, it is not clear whether these main legal instruments apply to VOs, moreover since duties of administrators in relating to AML and FT are laid down in Article 22B of the VOs Act, Chapter 492 of the Laws of Malta. In this context, having AML provisions laid down in different legal instruments creates a vagueness as to which regulation applies. This study evaluates what is currently being done and discusses what should be done within VO to prevent ML and FT, as well as to prevent instances where such Organisations are subject to abuse. Such an assessment is based on the concept of subject person and who should perform the due diligence process within the VO, the importance of the role of the administrator and his duties and responsibilities in the organisation, the concept of donations and whether they should accept certain donations, amongst other issues. The local situation was then compared to the situation in Italy, as an EU Member State and the United Kingdom, and how such matters are tackled in the latter jurisdictions and identifying possible measures which could be followed and implemented locally.