Australian charities could be used to fund terrorism, the nation's anti-money laundering regulator warned Thursday.
A report released by the Australian Transaction Reports and Analysis Center (AUSTRAC) on Wednesday found Australia's non-profit sector was likely to be used to fund terrorism.
Chris Collett, deputy chief of AUSTRAC, said there was a high likelihood that Australia's non-profit organizations (NPOs) were being used to launder money before it was sent to terrorist organizations such as Islamic State (IS).
"AUSTRAC is concerned about any vulnerability that might lead to exploitation of Australia's financial system by criminals or terrorists," he told News Corp Australia on Thursday.
"The cash-intensive nature of the not-for-profit sector creates vulnerabilities. NPOs that send or receive funds from high-risk countries are also vulnerable to money being diverted for terrorism purposes."
The Commonwealth Bank of Australia (CBA), Australia's largest bank, was hit with 700 million Australian dollars (509 million U.S. dollars) in fines in 2017 after it breached anti-money laundering laws.
According to the report, one charity with strong links to a religious organization is under investigation by AUSTRAC after it failed to account for all its funds.
The report said most NPOs existed to "support a particular ethnicity or religion" but their funds flowed "to and from a high-risk country."