Money Laundering and Terrorism Financing Abuse in Non-Profit Organisations: Challenges in Humanitarian Aid

Non-profit organisations (NPOs) play a critical role in delivering humanitarian, social, and developmental assistance. However, their operational structure, funding sources, and global reach can be vulnerable to abuse for money laundering and terrorism financing (ML/TF) purposes. This paper examines the risks and countermeasures associated with ML/TF abuse in the NPO sector. This paper highlights the common reasons why NPOs are considered one of the ML/TF typologies and analyses the existing international bodies and instruments for anti-money laundering and counter-terrorist financing (AML/CFT) measures for the NPOs sector. This paper employs doctrinal legal research by analysing AML/CFT primary and secondary sources to examine preventive strategies that can hinder the NPOs sector from being abused for ML/TF crimes. The study concludes with recommendations for strengthening the NPO sector's resilience while safeguarding legitimate charitable activities, advocating for proportional, risk-based measures that balance financial integrity with operational viability. This paper provides policymakers and NPOs with practical insights on AML/CFT compliance while supporting the vital functions of NPOs as an essential humanitarian channel for delivering aid, without compromising ML/TF risks.