DONOR DUE DILIGENCE, EDUCATION, DONOR STATEMENTS, AND FINANCIAL REPORT TRANSPARENCY AS A PREVENTION OF MONEY LAUNDERING IN ISLAMIC PHILANTHROPY

Abstract

This study aims to explore the potential for money laundering in Islamic philanthropic institutions and how to prevent it. This study uses a descriptive-qualitative method with a literature study approach. Islamic philanthropic activities consist of three activities: collection, management, and distribution. The results show that the potential for criminal acts of money laundering in Sharia philanthropic institutions is in fund collection activities. The potential for money laundering arises from donors with a donation value of more than IDR 500 million, with the condition that the donor does not provide information regarding the source of the funds, so it is not known whether the origin of the funds comes from legal or illegal activities. This study provides recommendations for preventing money laundering through the implementation of donor due diligence, education regarding money laundering warnings to the public, blank donor statements stating that the funds deposited are not from money laundering activities resulting from criminal acts or other illegal sources, and maintaining transparency in financial reporting for the collection and distribution of funds. This study contributes to helping Islamic philanthropic institutions solve problems related to money laundering crimes and formulate effective prevention models for anticipating money laundering crimes.

Keywords

• islamic philanthropic institutions
• money laundering
• prevention