ACNC warns charities sending funds overseas

The charity regulator’s warning to overseas aid charities follows recent measures to strengthen Australia’s defences against money laundering and financing terrorism. Approximately 6,100 registered Australian charities on the Australian Charities and Not-for-profits Commission (ACNC) Charity Register indicate they have charitable purposes and activities overseas.

ACNC Commissioner Susan Pascoe AM said that while the ACNC had not existed long enough as an agency to come to a view on the extent of charity terrorism financing risk in Australia, international experience had shown that the most effective way to get money across borders was to use a charity or NGO.

“The ACNC Act has a specific provision which requires the regulator to consider whether charities are engaging in, or supporting, terrorist or other criminal activities. Every registration application the ACNC receives is checked carefully against lists by government agencies,” says Pascoe.

“All charities are vulnerable to fraud and theft, regardless of where their charitable activities are carried out, if they do not have appropriate safeguards and processes in place.

“However, charities may be at greater risk when sending money overseas of their charitable funds being diverted or otherwise misused for criminal activities, money laundering and financing terrorism, even if their intentions to help are in line with their charitable purposes.

“The simplest way to avoid this from happening is for charities to ‘follow the money’ to ensure they are not duped or become complicit. Charities should also be aware of their legal obligations when providing financial aid overseas, particularly in countries where there is conflict and civil unrest.”

Pascoe said the ACNC’s creation, and specifically the ACNC Charity Register and compliance function, contributed to Australia’s compliance with Financial Action Task Force’s (FATF) Recommendation 8.

The recommendation requires FATF members 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 plays an intelligence gathering role in respect of terrorism financing and works with other agencies such as the Attorney General’s Department and the Australian Federal Police when appropriate,” says Pascoe.

“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.”

Pascoe said the ACNC maintained constructive working relationships with key regulatory, intelligence and enforcement agencies in Australia. In addition, the ACNC had initiated an international network of charity compliance staff from common law countries to share information to help keep their respective communities safe.

Sarah Harding

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