The South African non-profit sector and its vulnerabilities to economic crime

Bernice Bissett, Philip Steenkamp and Duane Aslett

Journal of Money Laundering Control, 2023, vol. 26, issue 6, 1179-1193

Abstract: Purpose - In a post-pandemic society, non-profit organisations (NPOs) have become vital. A safe environment for such organisations to function in is therefore important. In spite of efforts to safeguard this sector, rampant abuse exists. This paper aims to provide an in-depth analysis of the South African non-profit sector and its vulnerabilities to economic crime, specifically money laundering and terrorist financing. Design/methodology/approach - Secondary sources such as legislation, case law, textbooks and peer-reviewed publications are used in identifying the vulnerabilities in the South African non-profit sector. Common denominators are identified from these sources to provide a basis for the highlighted vulnerabilities. Findings - The South African non-profit sector is most vulnerable, leaving the sector susceptible to economic crimes. This is highlighted in the 2021 Financial Action Task Force Mutual Evaluation Report. Governance structures in the sector cannot protect it effectively and concomitant regulations have become inadequate. It is necessary for the South African Government and Parliament to review existing laws and regulations to ensure enhanced governance over these NPOs. Originality/value - This paper contributes to a research gap on existing vulnerabilities within the South African non-profit sector relating to money laundering and terrorist financing. The paper provides a comprehensive layout of the South African non-profit sector, highlighting areas at risk of exploitation and identifying key vulnerabilities within the sector.

Keywords: Economic crime; Forensic accounting; Non-profit organisations; Non-profit sector; South Africa; Money laundering; Terrorist financing; Terrorism (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jmlcpp:jmlc-10-2022-0146

DOI: 10.1108/JMLC-10-2022-0146

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