AML Regulations and Religious Worships

Corporations around the world are involved in the circulation of large flows of dirty money daily; in many investigations around the World, the role of religious institutions in the flow of illegal money has also been discovered. Making a brief introduction regarding the History of Religions, religious expansion understood as freedom of worship is due to the missionaries who brought the Faith to every corner of the World. The cult is characterized by many variations and forms of religious confessions such as the macro category of "religions," present both in the East and in the West: e.g., the Muslim Religion, the Islamic Religion, the Catholic Religion with the different types of "Churches": the Orthodox Church or the Evangelical Church and the Lutheran Church. 


Keeping life based on religious principles and money together is challenging, especially when personal and economic interests are more significant or more convenient than the virtues or norms imposed by a religious denomination. 


In particular, in some investigations in the United States, cases have emerged in which prominent figures of Catholic movements or evangelists, with so-called "Pastors," received to their knowledge or sent money of illicit origin and justified as a donation or inheritance.


The Absence of Ad-Hoc Guidelines

Mainly the risk is found in the activities that the organization or religious body carries out for profit or not, for a community. According to certain religious norms, the faithful are required to make regular contributions to finance the evangelical or pastoral activities of the religious body. Religious bodies and confessions all over the World do not have specific rules that can limit or mitigate the AML risks since, in the economic field, there is a standard agreement of lawful use (moral norm) of money, hinting for example, in the Gospel or in the Sharia to the profiles of justice and correctness towards one's neighbor (one thinks for example of the virtues of poverty in the Christian cult or the discipline of not creating economic damage imposed in the cult by the Islamic Finance). We could define that the main states of religious character where practices of control and mitigation to AML/CFT financial risks have been initiated are: The Vatican City State and the United Arab Emirates but remain important concerns in the areas of the East, subject to the Islamic cult (higher risk towards threats to economic activities intended to finance terrorism). 



With the exception of the two countries mentioned above, which are constantly monitored by the FATF or Meneyval authorities, there are no specific regulatory indications for AML/CFT procedures that can mitigate the illicit reuse of money; there are no controls or special Due Diligence checks for pastors, bishops or imams, nor accounting or fiscal controls on the companies directly managed by them. This, therefore, allows great freedom to circulate large amounts of money, justifying it for religious purposes or works.   



The Need For a "Religious" Compliance System 

Large corporations, whatever business they are in, are required to consider, prevent and mitigate their financial risks, with the functions of identifying, monitoring, and mitigating the risks of their company are; this is done through the Risk Management and Compliance systems/offices, under the direction of the CEO. Similarly, it could be envisaged for religious bodies, for denominations of an operational-territorial nature, or denominations of a community nature; e.g., Jesuits, Franciscans, Dioceses, parish priests, and evangelical groups: to establish internal guidelines and people with specific training in fraud and anti-money laundering charged with monitoring the proper collection of money and the use of money (a kind of MLRO). So, also, have the people in charge of verifying, with the support of local and financial authorities, the source of a dubious donation. E.g., some years ago, I was told that in Spain, in Madrid, a man was going to various parishes offering to lend money with the repayment of the money increased by convenient interest. The man granted the unsuspecting victim, the parish priest of a parish, a loan of 30,000 euros with the repayment of 40,000 euros in two years, perhaps a typical Ponzi scheme. Finally, it was discovered after some cases of fraud that it was an illegal activity with the purpose of cleaning money from criminal activities. 


The role of awareness-raising is crucial: e.g., in Ghana, the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) has created educational projects to convey to local populations, through religious leaders, fair and equitable use of the economy from the threat of money laundering and financial crimes. 


Fraud committed by religious leaders can be both intentional and unintentional. It can often be attributed to the failure to put in place internal controls, lack of knowledge, the means of the proper monetary authority. Religious institutions can often receive large sums of money from beneficiaries that are conducted in an unregulated environment without using due diligence measures. In more deliberate cases, much of the fraud that occurs in churches are taught in minimal amounts that can go unnoticed (drop by drop, a lake can be created).



Written by Dimitri Barberini

 
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