Anti-terrorism and
anti-money
laundering policy
Document manager:
Executive Director
Document name: Anti-terrorism and anti-money laundering policy Approved by Board of TrusteeJanuary, 2023
Version 2.0
Contents
4.
RELATED POLICIES AND PROCEDURES............................................................................... 3
Document manager: Executive Director
Document name: Anti-terrorism and anti-money laundering policy Approved by Board of Directors January, 2023
Version 2.0
1.
Objective
Malaika Social Organization is determined to prevent its funds from being
used directly or indirectly for
terrorist activities and to prevent that the proceeds of crime can be washed
through Malaika Social
Organization.
Funds
that are diverted to terrorist organizations or used for criminal acts are
funds that do not reach the intended projects, programs and
beneficiaries and, therefore, the most vulnerable will suffer.
Further to this, suggestions that an NGO is linked to terrorism or money
laundering in any way can be damaging
to its reputation and undermine the trust and support of beneficiaries,
partners, the wider public and donors.
The objective of this policy is to prevent Malaika Social Organization
funding terrorism, breaching sanctions and being used as
a vehicle for money
laundering.
2. Scope
The policy also applies to all staff members and consultants of
Malaika Social Organization at Global Office and Country/cluster Offices. All implementing partners, donors and suppliers
are subject to the
measures to prevent financing terrorism and/or money laundering.
Whilst we work in high risk locations for terrorism, Malaika Social Organization works with
local partner organizations, the
majority of whom we have known well over a long period of time. We believe that, by working in this way,
there is a relatively low risk that our funds will inadvertently find their way into the hands of those who will
use them for violent purposes. However, given the impact of any proven or alleged terrorist funding,
Malaika Social Organization took several measures in its process to select
partner organizations, suppliers and donors to further reduce
this risk.
The prevention of funding terrorism and money laundering is in The
Netherlands legally laid down in the “Wet ter voorkoming van witwassen en financieren van terrorisme” (Wwft). This law is not directly applicable for Malaika Social Organization. However
through transferring funds through banks
and working with chartered accountants, the law does apply indirectly for Malaika Social Organization.
3.
Dissemination
The Anti-terrorism and anti-money laundering policy is openly available on Malaika Social Organization’s
external websites and her internal website (Intranet). All updates will be so
directly communicated to all Malaika
Social Organization staff, partners, donors and consultants. Critical checks in the policy are part of the
primary process descriptions, that are part of the onboarding program
of all new staff members.
The Anti-terrorism and anti-money laundering policy is mentioned in all
legal agreements with partner organizations, donors,
consultants and suppliers including a link to the full document.
4.
Related policies,
process descriptions, procedures and tools
This policy should be read in connection with the following
Malaika Social Organization policies, process descriptions, procedures and tools:
Policies:
□
Integrity Policy
□
Fraud Policy
□
Code of Conduct
for staff
□
Code of Conduct
for third parties
□
Donation policy (in preparation)
□
Procurement policy
□
Partner Alliance policy
□
Enterprise Risk Management policy
Process descriptions:
□
2a Partner Contracting (subprocess of Project
process)
□
2b Partner Monitoring process (subprocess of Project process)
□
3a Partner Final Reporting (subprocess of Project process) Tools:
□
Partner risk assessment
□
Factiva check
5. Definition
A
terrorist act is an act, or a threat to act, that meets both these criteria:
□
Terrorism intends to coerce or influence the public or any government by intimidation to advance a political,
religious or ideological cause.
□
Terrorism causes one or more of the following: death; serious harm or danger to a person;
serious damage to property; a serious risk to the health or safety of
the public; and serious interference with, disruption to, or destruction of critical infrastructure such as a telecommunications or electricity
network.
Advocating,
protesting, dissenting or taking industrial action are not terrorist acts where
the person doing the activity does not intend
to cause serious
harm to a person or create a serious risk to public safety.
Money
laundering is the process by which the proceeds of crime are channeled through
financial systems in an effort to disguise their illegal
origin and returned to the launderer in an indirect manner.
6. Prevention
Malaika Social Organization has the following measures in place to reduce
the risk of accidentally and deliberately funding of terrorism or being
used for money laundering:
Due Diligence
on partners, suppliers and donors: Malaika Social Organization has a
partner alliance policy, procurement
policy and donation policy in place that prescribe the limitations to the type of
organizations with whom we cooperate. For all new partner organizations a
partner risk assessment is performed, indicating the different risks of working
together with this partner. Based on the assessment risk mitigating
measures are taken to reduce
the identified risks.
To make sure that
Malaika Social Organization doesn’t
enter into financial
relations with terrorist
or criminal organizations, new
partners,
suppliers and donors and their executive board members go through a Factiva
check. Non- institutional donors
never decide to which organizations or individuals their funds are paid. In
case the Factiva check
reveals potential risks in
relation to terrorism or money laundering, additional research
will be done. Only when additional
research gives guarantees, cooperation with the organization can be
considered.
Code of
Conduct: Malaika Social Organization enforces a Code of Conduct
among its staff and its contract partners.
Staff and contract partners sign up to the Code of Conduct on joining the organization or signing a contract with Malaika Social Organization. The Code of Conduct specifically mentions that staff and
contract partners should contribute to preventing unethical and criminal activities.
Audit Committee: Malaika
Social Organization’s Audit Committee (committee of the Supervisory Board) assists the Supervisory Board in
fulfilling its responsibilities by independently reviewing financial statements and the effectiveness of our internal
controls. This Committee
monitors the effectiveness of the external
and internal audit functions and assists the Supervisory Board in
fulfilling its responsibilities for determining the nature and extent of the
risks it is willing to take in achieving its strategic objectives
Procedures: Malaika
Social Organization has Global Quality
Management System with procedures
for support functions in the areas of finance, procurement, administration and
asset management, which are required
to be followed by all of the Country/cluster offices and Global Office.
Segregation
of duties: Responsibilities in key financial processes are separated
among several employees rather than entrusted to one employee. Signatures and/or system workflow
approvals are required at different
stages in any financial transaction process in order to avoid unauthorized transactions.
“Three lines of defense”-internal control
system: Malaika Social Organization has an internal control
system that follows
the “three-lines-of-defense”-approach. The first line is the policies, processes
and procedures for the management of operations. The second line is the risk management processes which seek to
identify gaps and exposures. The third line is the internal audit function,
which independently monitors these first two lines.
Budget
management: Budget versus actual expenditure reports are prepared
and reviewed with senior management
on a monthly basis per project and organizational unit. Every 4 months an extensive consolidated report is shared
with the Supervisory Board. Budgets are maintained on the accounting system.
Proper books
and records: Malaika Social Organization maintains a multi-currency
accounting system that allows
tracking of income and expenditure with unique referencing to projects, funding sources and external third parties in the
system. All income and expenditure is linked to donor/source coding and all program expenditure is
linked to specific projects and partner coding. In addition, Malaika Social Organization retains all
supporting documentation (receipts, invoices and supporting documents) in line with legislative
requirements.
Cash and Bank management: Controls include regular
cash counts and monthly bank reconciliations, authorization levels to carry out financial
operations, segregation of duties, signatures/system approvals. In addition,
when used, cheques require two signatures, and all bank transfers require dual signatures.
7.
Detection
Annual
external audit and external project audits: Malaika Social Organization
undergoes an annual external audit of
its financial statements and approximately 60% of all projects are subject to an external audit. All transactions that are suspicious related to funding
terrorism or money laundering,
require specific attention from the external auditors, notification to
authorities and further investigation by the
auditors according to the Wwft.
Banking
system: Malaika Social Organization transfers 95% of its funds
through Tanzanian and international
Banks that fall under the sanction regulations of the UN. As a consequence, all
transfers Malaika Social Organization
makes are screened and transfers to high risk countries are explicitly checked
and need detailed
information on purpose
and destination of the transfer.
In case of insufficient
documentation, transfers will not be accepted by the banks. Tanzanian banks are
also obliged to notify tax authorities in case of suspicious transactions related to money
laundering.
8.
Monitoring & reporting
Integrity Committee: All incidents of possible
criminal activities that are proactively and/or retroactively
noticed within Malaika Social Organization, will be reported to the Integrity
Committee. Suspicions of financing terrorism and/or money laundering will be
dealt with by the Integrity Committee and follow the same routing as
suspected fraud, including possible sanctions. Refer to paragraph 6 and 7 of Malaika Social Organization’s Fraud Policy.
9. Responsibilities
The Board of Directors is the owner of this Anti-terrorism and anti-money laundering policy and approves the policy.
The Executive
Director is responsible for keeping this procedure up to date and review the policy at least
on an annual basis.
Compliance & QMS, External Relations & Business Development, Corporate Finance and Internal Audit
are consulted when updating the policy.
All staff will be informed
through Malaika Social Organization’s Intranet
on updates of the policy.
Page 6 of 6
Document manager: Executive Director
Document name: Anti-terrorism and anti-money laundering policy Approved by Board of Directors January, 2023
Version 2.0
