Institutionalization of risk management framework in Islamic NGOs for suppressing terrorism financing. Exploratory research
| DOI | https://doi.org/10.1108/JMLC-02-2013-0006 |
| Date | 07 January 2014 |
| Published date | 07 January 2014 |
| Pages | 96-109 |
| Author | Radiah Othman,Rashid Ameer |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation |
Institutionalization of risk
management framework in
Islamic NGOs for suppressing
terrorism financing
Exploratory research
Radiah Othman
School of Accountancy, College of Business, Massey University,
Palmerston North, New Zealand, and
Rashid Ameer
Faculty of International Studies, International Pacific College, Tertiary Institute,
Palmerston North, New Zealand
Abstract
Purpose – The aim of this paper is to propose solutions for improving internal controls and
transparency to alleviate concerns of international community over alleged linked with terrorist
groups.
Design/methodology/approach – The authors explore the counter-insurgency theoryand political
process model to explain the current state of counter-terrorism activities aimed at Islamic NGOs after
9/11.
Findings – The authors believe the idea of money flow disruption to be of greater importance than
freezing the accounts to suppress terrorism financing.
Practical implications – Islamic NGOs established for philanthropic and humanitarian aid in third
world Muslim countries have been accused of being involved in terrorism financing. This revelation is
to the disadvantage of the donors who do not channel their donations for such activities. The authors
propose risk management framework useful at operational level to detect and prevent welfare
activities financing warfare activities.
Originality/value – The proposed risk management framework is to complement various regional
and international initiatives championed by Asia/Pacific Group on Money Laundering and Financial
Action Task Force to combat money laundering and terrorist financing.
Keywords Risk management,Internal control, Islamic non-governmentorganization,
Terrorism financing
Paper type Viewpoint
1. Introduction
In most of the developing countries, NGOs are seen as addressing the issues of
development and poverty. Most of the services provided by these organizations include
childcare, healthcare, adult literacy, social welfare and other services that some
governments are incapable of providing. Some NGOs are purely of foreign origin, while
in third world countries some are local but funded from abroad (Jamil, 1998). Foreign
NGOs have also been active in relief and rehabilitation work in natural disasters.
NGOs with a humanitarian and social justice focus are seen as helping ethnic minority
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1368-5201.htm
Journal of Money Laundering Control
Vol. 17 No. 1, 2014
pp. 96-109
qEmerald Group Publishing Limited
1368-5201
DOI 10.1108/JMLC-02-2013-0006
JMLC
17,1
96
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