Friday, 3 April 2015

Charitable Donations Could Be Diverted To Support Terrorism, Regulator Warns

The charities regulator has warned non-profit organisations of the risk that donations may be used to fund terrorism, after a report found a “handful” were engaging in the practice.

The Australian Charities and Not-for-profits Commission (ACNC) said assets could be misused, or groups could be infiltrated by supporters of terrorism.

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

The Raising Funds to Support Terrorism report, released recently by the anti-money laundering body Austrac, found that the risks of misuse of charitable money was high, but the incidence of it was low.

“The risks associated with the misuse of charities and not-for-profit organisations [NPOs] are high as these organisations offer the capacity for groups to raise relatively large amounts of money over time,” the report said.

“However, this risk should be considered in the context of the relatively low incidence of terrorism financing in Australia, and the low value of funds suspected to have been raised in Australia to date.

“While charities and NPOs are one of the more significant Australian terrorism financing channels, they have not featured in a large number of Australian terrorism financing cases. Rather than representing a sector-wide risk, terrorism financing in Australia has been limited to a handful of charities and NPOs,” it said.

Austrac has issued a particular warning for Australians wishing to donate to help Syrians.
“Charities and NPOs which operate in crises and war zones overseas are at risk of being infiltrated and exploited by terrorist groups in these areas. Funds sent to Syria and neighbouring countries for humanitarian aid are at increased risk of being used for financing terrorism if they are sent through less-established or start-up charities and NPOs,” the report said.

“Those wanting to send funds to Syria for family and humanitarian purposes are advised to do so by donating to a United Nations humanitarian agency or to an Australian humanitarian organisation.”

The ACNC has released new guidelines for charities on how to avoid being inadvertently exploited. The checklist arms charities with information on how to tell if the their assets are being misused, or they have been infiltrated by someone supporting terrorism activities.

Pascoe said the risk was particularly concerning for Australia, as ACNC data showed about 17% of registered charities operated overseas.

“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 executive director of the Australian Council for International Development, Marc Purcell, said the checklist was a good reminder for organisations to remain vigilant, saying it “should be of interest” to all council members.

Last week Westpac cut off all transfers to Somalia, due to fears that money was being funnelled to terrorist organisations such as al-Shabaab.

Westpac was the last of the big four Australian banks to end transfers to the country. Somali community leaders said the move would drive more people to terrorist groups, as they would be unable to afford food, shelter and other essentials usually paid for by family overseas.
The Guardian