New Overseas Standards to Protect Australian Charities From Criminal Misuse

Australian charities working overseas will face new conduct standards aimed at preventing organisations from “being misused by a criminal organisation”.

The Treasury released draft regulations for the proposed external conduct standards on Monday, which charities registered with the Australian Charities and Not-for-profits Commission (ACNC) must comply with when operating outside Australia.

The exposure draft released by Treasury said: “Australian registered entities play an important role in providing development assistance, essential services and humanitarian aid to those in need around the world.

“Unfortunately, there is a risk that criminal organisations may take advantage of registered entities, by misusing funds and providing a cover for, or support of, criminal activities.

“The external conduct standards are intended to provide greater confidence that charitable funds sent, and services provided, outside Australia are reaching legitimate beneficiaries and are being used for legitimate purposes.”

“The standards are also intended to prevent a registered entity from being misused by a criminal organisation.”

News: Treasury has released the draft regulations for the proposed external conduct standards for registered charities operating overseas. Read more: https://t.co/oPtBUeQido pic.twitter.com/Cb66VuW3OZ

— ACNC (@ACNC_gov_au) August 13, 2018

The standards require charities to “take reasonable steps” to ensure resources given to third parties outside Australia – or within Australia for use overseas – are in accordance with an organisation’s purpose.

Charities working overseas must also ensure they comply with Australian laws relating to issues like money laundering, terrorism financing, child sex offences, slavery, and child trafficking.

Community Council for Australia (CCA) CEO David Crosbie told Pro Bono News CCA was currently seeking legal advice around the standards, but noted they would only impact a limited number of charities – as work in Australia or incidental international work was not covered.

“On the surface the proposed new conduct rules do not appear to be a major challenge,” Crosbie said.

“The key issue will be the increased compliance burden – how much extra administrative and reporting work is required to comply with the new rules – and the way incidental activities overseas are defined.

“We do not want to see another situation like the proposed ‘In Australia’ provisions that put in jeopardy the charitable status of arts and other organisations that occasionally toured internationally or ran special international events and training.”

Treasury is currently seeking submissions on the draft regulations until 21 September, and will hold meetings with interested parties to obtain feedback during this consultation period.

The federal government aims to have the standards operational by 1 July 2019.