The Federal Banking Agencies and US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) have issued a joint fact sheet to clarify how banks need to implement a risk-based approach to charities and other non-profit organizations (NPOs).
The US government does not think that the charitable sector presents constant or unacceptably high ML/TF risks. Even though some charitable organizations have been exploited for terrorist financing, most are legitimate and compliant with regulations.
The authorities further acknowledge that it is important to ensure that legitimate charities stay functional through legitimate and transparent channels. This is even more crucial during the ongoing COVID-19 pandemic. Therefore, banks must apply a risk-based approach to customer due diligence requirements when performing risk assessment of charities and NPOs.
Source: FinCEN