Copyright Lessons Learned Ltd 2016 Spurious NGOs (1) £ £ Use of spurious NGOs – how it works: Charitable and humanitarian organisations provide a useful vehicle for terrorist financiers, because the operations of such organisations are often in much the same geographical area as the terrorists’ own operations. Terrorist groups might infiltrate and use the banking facilities of legitimate charities [see separate slide presentation] …or they might set up a few charities of their own. Here’s how it works. Donors pay money (often via web-sites) to organisations presenting themselves as not-for-profit organisations apparently engaged in ‘good works’ in the world’s trouble spots. The money is donated on the pretext that it will be used for charitable purposes… But the shadowy, unseen owners and beneficiaries of these organisations are the terrorists. The money was never destined for charitable works, and is diverted instead to fund terror activities. Copyright Lessons Learned Ltd 2016

Copyright Lessons Learned Ltd 2016 Spurious NGOs (2) Key facts Web presence: funds collected via the web without the need for any real physical presence Impact on real charitable causes: potentially unfair suspicion regarding any small charities working in terror-torn regions Donors: often from a particular immigrant community Terrorist financier’s perspective Use of charitable ‘front’ as a ‘cover’ for the movement of terrorist funds Ability to promote their cause ‘under cover’ of supposed charitable aims Key facts Spurious NGOs will operate in much the same way as shell banks, i.e., they are ‘virtual’ entities that have no real physical presence at any specific location. As such, most of their fund-raising will be carried out by virtual means, e.g., via the web. The knowledge that such organisations exist does a great dis-service to legitimate, smaller and less well-known charities, since it makes people suspicious of these organisations’ intentions and may make them less willing to donate funds, because of doubts about how those funds might ultimately be used. These smaller NGOs will quite often target specific communities, e.g., immigrant populations, and the spurious NGOs run by terror groups may tend to do the same, appealing to those communities’ concern for their compatriots in their home country. Donors will often be unaware that the cause they are supporting is a terrorist cause rather than a humanitarian one. Terrorist financier’s perspective From the terrorist financier’s point of view, the NGO is simply a useful ‘front’ behind which to hide their real and sinister cause of raising funds for terrorism. Copyright Lessons Learned Ltd 2016

Copyright Lessons Learned Ltd 2016 Spurious NGOs (3) Possible ‘red flags’ Difficulties in identifying the ownership structure and true owners behind the organisation Lack of any real physical presence, e.g., a business address, land line, identifiable staff members, etc Mismatches between the pattern and size of financial transactions and the stated purpose and activity of the organisation Transaction features and behaviours shown on this slide should give rise to concern that charitable accounts may be spurious and nothing more than a front for terrorist fund-raising. Copyright Lessons Learned Ltd 2016