Risk of Aus Charities Financing Terrorism

The charity regulator has warned that charities may be at risk of having their charitable funds that are sent overseas being diverted or otherwise misused, even if their intentions are in line with their charitable purposes.

The ACNC has called on charities sending money overseas to be vigilant and diligent in dealing with their partner organisations overseas.

“Recently, there has been a strong focus by the Federal Government on measures to strengthen Australia’s defences against terrorism both internally and externally,” ACNC Commissioner Susan Pascoe said.

ACNC figures show 15 per cent of registered charities who had lodged their 2013 Annual Information Statement with the ACNC operated overseas.

“The creation of the ACNC Register and compliance function contributes to Australia’s compliance an international Financial Action Task Force, to ensure that Not for Profit organisations cannot be misused to generate, be conduits for, or conceal resources intended to finance terrorist activity.

“The ACNC Act also has provision for the implementation of External Conduct Standards for charities.

“We have some anecdotal evidence regarding concerns that charitable funds may be sent overseas and used improperly.But we do not have any evidence of these activities,” Pascoe said.

“We are working with intelligence and enforcement agencies overseas through agreements that relate to charitable activities overseas and this is an ongoing issue where money can be frozen.

“We have initiated a network of compliance staff working in charity regulators in common law countries so information can be shared and our respective communities kept safe,” she said. 

ACNC Assistant Commissioner David Locke who has had experience in charity regulation in the UK says internationally it is recognised that charities can be vulnerable.

“There is evidence that the most effective way to get money across borders is to use a charity or NGO,” Locke said.

“We know from the UK experience that home-ground terrorist activities in that country have involved charities in all major atrocities from radicalised mosques to schools.

“We would be naive to assume that any country is immune to this. 

“It is up to local charities to carry out due diligence and to follow the money as they can be duped or become complicit,” he said.

“Our aim is to give the public confidence that funds sent outside Australia by charities are reaching intended beneficiaries and being used for legitimate purposes, and that funds and activities are not contributing to terrorist or other criminal activities,” Susan Pascoe said.

“Clearly, this watchdog role is one of the ways in which the ACNC maintains and enhances public trust and confidence in the charitable sector.

“Through the monitoring of compliance with regulatory obligations, and the provision of credible information on charities on the Charity Register the ACNC increases the transparency and oversight of all charities.

“We know that there are many many Australian charities doing incredibly good work overseas and we are not treating them with suspicion. However we need to make a coordinated effort to call on charities to be careful.” 

Information for charities about managing terrorist financing risks is available on the website.