Australian Charities Funding Terrorism Warning

The national charity regulator, the ACNC, has issued a warning after a new report revealed that some Australian-based charities and Not for Profits have been exploited by terrorist groups to raise money to fund their activities.

A new report by the Australian Transaction Reports and Analysis Centre (AUSTRAC), Terrorism Financing in Australia 2014 does not name specific organisations but said "a handful" of charities and NFPs had been used to disguise international funds transfers to high-risk regions.

AUSTRAC listed charities and NFPs as the key channel used to raise funds for terrorism financing in or from Australia.

“Funds raised for overseas humanitarian aid can be commingled with funds raised specifically to finance terrorism,” the report said.

“Funds sent overseas by charities with legitimate intentions can also be intercepted when they reach their destination country and siphoned off for use by terrorist groups.

“Some donors may willingly provide donations to support [terrorist] groups, while other donors, and the charities themselves, may be coerced, extorted or misled about the purpose of funding.”

The report used the example of funds sent to war zones in Syria and neighbouring countries for humanitarian aid as being at increased risk of being used for financing terrorism if they are sent through less-established or start-up charities and NFPs.

The Australian Charities and Not-for-profits Commission (ACNC) confirmed that charities could be misused to raise and distribute funds for terrorism.

ACNC Commissioner Susan Pascoe said charitable organisations mostly operate with integrity and sound governance practice, however they are particularly vulnerable to financing terrorism.

“While overwhelmingly charities operate honestly and professionally, there is nonetheless the risk of misuse for illegal or improper purpose,” Pascoe said.

“The [AUSTRAC] report stated that charities are key channels for terrorism financing, and that there is an emerging trend of charities being used to raise funds for groups engaged in foreign conflicts.

“This is a particularly concerning issue for Australia, as ACNC data has shown that around 17 per cent of registered charities operate overseas, with many conducting much needed humanitarian activities in war-torn countries.”

Pascoe said charities needed to be aware of the dangers surrounding international terrorism and how they can be taken advantage of.

“The heightened risk means all charities must take reasonable precautions and exercise due diligence to ensure that funds are not inadvertently directed towards terrorism. The ACNC has worked across Government and with the sector to help charities protect themselves against this threat,” she said.

The ACNC has published a checklist to provide steps to help charities minimise the risk of funding or supporting terrorism.

Executive Director of the Australian Council for International Development (ACFID), Marc Purcell, supported the ACNC’s terrorism financing checklist.

Purcell said that the checklist and guidance would also act as a timely reminder to all charities that vigilance in their financial dealings must be a mainstay of their operations.

“ACFID views the ACNC’s checklist as a useful companion to our Code of Conduct and should be of interest to all of its members,” Purcell said.

“ACFID’s code aims to improve international development outcomes and increase stakeholder trust by enhancing transparency and accountability of signatory organisations.”

Charities seeking more information can call the ACNC on 13 ACNC (13 22 62) or visit acnc.gov.au.

Members of the public with concerns about a charity’s conduct should visit acnc.gov.au/charityconcern to lodge a formal complaint.