FATF compliance: Seychelles’ government to survey NPOs for terrorist financing risk

A national risk assessment that started last year to identify nonprofit organisations at risk of financing terrorism is moving to the second phase to be done through a survey. The chief executive of the Financial Intelligence Unit, Richard Rampal, told reporters on Tuesday that the exercise is not only to determine if the sector, in general, faces the risk of…

A national risk assessment that started last year to identify nonprofit organisations (NPOs) at risk of financing terrorism is moving to the second phase to be done through a survey.

The chief executive of the Financial Intelligence Unit (FIU), Richard Rampal, told reporters on Tuesday that the exercise is not only to determine if the sector, in general, faces the risk of financing terrorism but to look at mitigating measures in line with international recommendations.

“For the NPOs identified to be at risk, FIU is the entity that will supervise them. The intention is to assist the NPOs that are at risk and work closely with them so that they are not used as an avenue for terrorists to route their funds through. We will supervise, ask for reports and do inspections at the associations for us to be better able to support them,” he explained

Rampal said that FIU “does not have any statistics at the moment that shows that our NPOS are being used for financing terrorism. This exercise will help us collect information so that we can make policy decisions that will mitigate the risks.”

The Secretary of State in the finance ministry, Patrick Payet, said that the first phase done last year was to identify all entities that fall under the NPO sector and the second phase will be more in depth.

“In our review of the first phase we have seen that we need more engagement from the NPOs and we also need more information. This time we are also including a better representation of different groups of NPOs and adding questions that will help identify if NPOs understand the risk they can have for financing terrorism,” said Payet.

The chief executive of the Citizens Engagement Platform of Seychelles (CEPS), Alvin Laurence, said the exercise will be done through a survey.

“The different associations will be contacted by telephone to ensure a high level of confidentiality and transparency. The questions that will be asked will include where they get their funding and who verifies upon receipt and how the funds are used. All the answers will be recorded and a national analysis will be done to show if that sector in Seychelles is at risk for financing terrorism,” said Laurence.

He explained that a nonprofit organisation is a group set up for a particular purpose and the funds they get should not go into the pocket of an individual but are used for the benefit of society.

The NPOs under the CEPS umbrella include associations, federations and foundations.

“It also includes faith-based organisations which are those not registered as a religion but have their own practices and this is one of the sectors that is looked at closely because there is collection and utilisation of funds,” he added.

Laurence highlighted the importance of the NPOs and said that to continue with the good work and in the development of the country, it is important that these organisations continue to get financial support.

“This is not automatic, however, there are criteria and regulations to follow and this has to be done through good governance. This is why organisations affiliated with CEPS and the NPOS that we worked with have to do the exercise to show that the way we operate, the way we receive funds and how we use them do not put civil society at risk and also the country at risk,” added Laurence.

Payet said the exercise is important for Seychelles as it is one of the recommendations made by the Financial Action Task Force. One of its 40 recommendations requires that countries take a risk-based approach to the supervision of the NPO sector. Seychelles he said is currently non-compliant with this recommendation.

“If Seychelles remains non-compliant with the recommendation made by the FATF, we can be placed on the EU’s blacklist and this will affect the integrity of our financial sector. The last time we were blacklisted it directly impacted our financial sector,” he said.

Seychelles, an archipelago in the western Indian Ocean, was blacklisted because the European Union was concerned with the territorial tax system adopted in December 2018. Seychelles was removed from the tax haven blacklist in 2021 after the island nation amended its legislation to bring it in line with international standards.

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