Charities and non-profits

Automated and manual transaction monitoring shall identify unusual or suspicious activity using risk-based scenarios and thresholds.

Financial institutions may not keep anonymous accounts or accounts in obviously fictitious names and must, by a principle set out in law, undertake customer due diligence when establishing a business relationship, carrying out an occasional transaction above USD or EUR 15,000 or a payment or value transfer covered by INR.16, when money laundering or terrorist financing is suspected, or when they doubt previously obtained identification data: identify and verify the customer from reliable independent sources; identify the beneficial owner and take reasonable measures to verify that identity, understanding the ownership and control structure of legal persons and arrangements; understand and where appropriate obtain information on the purpose and intended nature of the relationship; and conduct ongoing due diligence and transaction scrutiny consistent with the customer's profile including, where necessary, the source of funds. The extent of each measure follows a risk-based approach; verification takes place before or during establishment of the relationship, or as soon as reasonably practicable after it where risks are managed and business would otherwise be interrupted; an institution that cannot complete CDD does not open the account or perform the transaction, or terminates the relationship, and considers a suspicious transaction report; the requirements apply to new customers and, on materiality and risk, to existing ones. The Interpretive Note sets the risk-based approach, enhanced and simplified measures, the specific measures for legal persons, arrangements and beneficiaries of life insurance, reliance on prior verification and the timing rules.

Countries identify the organisations that fall within the FATF definition of non-profit organisations, assess their terrorist financing risks, and apply focused, proportionate and risk-based measures that protect them from abuse by terrorist organisations posing as legitimate entities, as conduits for terrorist financing including to escape asset freezing, and through concealed diversion of funds intended for legitimate purposes, without unduly disrupting or discouraging legitimate NPO activity; the Interpretive Note covers outreach, risk-based supervision, effective investigation and information gathering and international cooperation, and warns against applying the measures to the whole sector.

Systems and controls for monitoring customer transactions for unusual or suspicious activity.