Risks Associated with Money Laundering and Terrorist Financing


Non-Governmental Organizations and Charities

Objective. Assess the adequacy of the bank’s systems to manage the risks associated with accounts of nongovernmental organizations (NGO) and charities, and management’s ability to implement effective due diligence, monitoring, and reporting systems.

1. Review the policies, procedures, and processes related to NGOs. Evaluate the adequacy of the policies, procedures, and processes given the bank’s NGO accounts and the risks they represent. Assess whether the controls are adequate to reasonably protect the bank from money laundering and terrorist financing.

2. From a review of MIS and internal risk rating factors, determine whether the bank effectively identifies and monitors higher-risk NGO accounts.

3. Determine whether the bank’s system for monitoring NGO accounts for suspicious activities, and for reporting of suspicious activities, is adequate given the bank’s size, complexity, location, and types of customer relationships.

4. If appropriate, refer to the core examination procedures, “Office of Foreign Assets Control,” page 152, for guidance.

Transaction Testing

5. On the basis of the bank’s risk assessment, its NGO and charity accounts, as well as prior examination and audit reports, select a sample of higher-risk NGO accounts. From the sample selected, perform the following examination procedures:

  • Review account opening documentation and ongoing due diligence information.
  • Review account statements and, as necessary, specific transaction details.
  • Compare expected transactions with actual activity.
  • Determine whether actual activity is consistent with the nature of the customer’s business.
  • Identify any unusual or suspicious activity.

6. On the basis of examination procedures completed, including transaction testing, form a conclusion about the adequacy of policies, procedures, and processes associated with NGO accounts.


< Previous Page
Non-Governmental Organizations and Charities
Next Page >
Business Entities (Domestic and Foreign)