Hyderabad: Deputy commissioner (exemption) of Hyderabad and Andhra Pradesh I-T Department Sudha Korivi on Sunday appealed to non-profit organisations (NPOs) to maintain statements of funds flows and ensure transparency, warning of deploying the financial action task force (FATF) to prevent misuse of funds for activities, such as terrorism.
Korivi said that the FATF is an independent inter-government body with a mandate to protect the global financial system against money laundering and terror financing.
“FATF tries to address risk to NPOs, as they are vulnerable for a variety of reasons, such as NPOs enjoy public trust, have access to considerable sources of funds, and are often cash intensive. Some NPOs have a global presence in national and international operations and financial transactions. In some cases, terrorist organisations have infiltrated NPOs and misuse funds and operations to cover for or support terror activities,” Korivi said.
She asked NPOs to conduct due diligence on functionaries, such as trustees, directors, managers and accountants, and collect their complete details, including current address, ID proofs and past employment.
“NPOs must know about partners and their associations affiliations with other organisations. Find out who else might be supporting a person or cause being endorsed. NPOs must encourage transactions only through banking channels and regulated financial channels. Discourage cash transactions and keep a complete audit trail of transactions,” Korivi said.
“The FATF also tracks the complete details of donors, NPOs’ areas of activities, operations, and their backgrounds and antecedents. The task force also looks into books of accounts and supporting related documents of financial transactions,” Korivi said.
Besides, officials stated that deduction under Section 80G will not be available for the Jawaharlal Nehru Memorial Fund, the Indira Gandhi Memorial Trust and Rajiv Gandhi Foundation.
