OG96 CHARITIES AND TERRORISM

In this section...

OPERATIONAL GUIDANCE

CHARITIES AND TERRORISM

OG 96 – 29 August 2007

Purpose

This guidance sets out our position on charities and terrorism, and advises how to handle cases where we suspect a terrorist organisation is involved.

Functional responsibility

For action

All operational divisions

For information

All operational divisions

Contents

1. Background
2. Principles underlying our handling of allegations of charities' involvement with terrorism
3. The duties of trustees and ways in which terrorist and other criminal groups seek to use charities to further their own ends
4. Case handling issues


The Law	Refer to a lawyer	Refer to an accountant

1. Background
	The Terrorism Act 2000 came into force on 19 February 2001 and was followed by the Terrorism Act 2006 which extended the previous Act and made way for implementation of other international conventions to which the United Kingdom is party. Both Acts have implications for us in relation to all aspects of our casework. We have made a number of public statements on charities and terrorism, and our position is set out on our website.
	Under Part II of the 2000 Act, the Secretary of State has the power to proscribe any organisation which he believes 'is concerned in terrorism'.
	An organisation is 'concerned in terrorism' if it commits or participates in acts of terrorism, prepares for terrorism, promotes or encourages terrorism, or is otherwise concerned in terrorism either in the UK or abroad.
	'Organisation' is defined as including 'any association or combination of persons'. It is against the law to be a member of a proscribed organisation and it is also illegal to assist, raise money for, or send money to one, or anyone who is a member of such an organisation. The effect of proscribing the organisation means that those who support them or profess to be a member of them are committing a criminal offence.
	The second schedule of the 2000 Act lists proscribed organisations. Subsequent orders of Secretary of State have added organisations to the original schedule published.
	Also, we need to be aware of United Nations (UN) and European Union (EU) legislation that affects us. Both the UN and the EU have lists of designated people or organisations and by operation of EU and UK law financial sanctions may be imposed by HM Treasury's Asset Freezing Unit against those listed.
	Our international obligations require us to:
	deny all forms of financial support to terrorists;
	deny the provision of a safe haven to terrorists;
	share information about terrorist offences and threats with other governments;
	ensure that anti-terrrorist laws are of a sufficiently serious nature.
	The Asset Freezing Unit maintains a list of designated and proscribed people and organisations by the UN, EU and UK. This list can be found at HM Treasury's website.
	Section 4 of this OG offers advice on how to handle cases where we suspect a proscribed organisation has become involved with a charity or an organisation wishing to register as a charity.
	The full text of the Terrorism Acts 2000 and 2006 are available on the HMSO website.
	The provisions of the Terrorism Act 2000 were further augmented by the Anti-terrorism, Crime and Security Act 2001, the full text of which is also available on the HMSO website. The main effect of the latter Act on charities is to replace sections 24 to 31 of the Terrorism Act 2000 (seizure of terrorist cash). See section 4.3.
	Legal opinion is that the Anti-terrorism, Crime and Security Act 2001 does not impose any further duties/penalties on any Commission officers in their work.
	The incidence of charity involvement with terrorist organisations is very rare, but we should always be alert to the possibility that it can happen.

2. Principles underlying our handling of allegations of charities' involvement with terrorism
	The Commission's website contains a statement of our policy and approach to terrorist activity and charities. This policy and this guidance will be reviewed following the results of the Home Office and HM Treasury's public consultation on the "Review of the Safeguards to Protect the Charitable Sector (England and Wales) from Terrorist Abuse".
	Our approach rests on 3 key principles that we apply when considering charities with potential links to terrorism. These principles were applied before the events of September 11 2001 and have been applied since.
	We would not register an organisation that had support of terrorism as an object.
	Use of an existing charity’s assets for support of terrorist activity is not a proper use of those assets.
	Links or alleged links between a charity and terrorism are corrosive to public confidence in the integrity of charity.
	These three key principles have the following practical effects on our work:
	Any links between a charity and terrorist activity are totally unacceptable. ‘Links’ in this case might include fundraising or provision of facilities, but also includes formal or informal links to organisations ‘proscribed’ under the Terrorism Act 2000 and any subsequent secondary legislation. We will assess rigorously any allegation of links between a charity and terrorist activity, and where there are grounds for an inquiry it will be conducted as a matter of the highest priority.
	Where allegations of links to terrorism are made, or where suspicions otherwise arise, they should first be brought to the attention of the Assessment Unit who will liaise with the Head of Compliance and Support and the Counter Terrorism Team. These teams will liaise closely with relevant intelligence, security and law enforcement agencies to ensure thorough investigation of the allegations or suspicions.
	Active collaboration between charities and terrorist organisations is a police matter that may lead to very serious criminal charges. Where allegations are made to us or suspicions arise as a result of our work (eg monitoring or casework), we will inform the relevant law enforcement agencies immediately and co-operate fully with the criminal investigation.
	Where a charity’s activities may give, or appear to give, support or succour to any terrorist activity, we expect the charity’s trustees to take all necessary steps immediately to disassociate the charity from the activity.
	We expect trustees to be vigilant to ensure that a charity’s premises, assets, volunteers or other goods cannot be used for activities that may, or appear to, support or condone terrorist activities. Examples include the use of a charity’s premises for fundraising or meetings.
	Charities should take all necessary steps to ensure that their activities could not be misinterpreted. We expect trustees of charities to take all necessary steps to ensure that their activities are transparent, for example including transfer of assets abroad. We hold trustees accountable for ensuring that procedures are put in place to ensure that terrorist organisations cannot take advantage of a charity’s status, reputation, facilities or assets.
	We expect any person connected with a charity, whether a trustee, employee, volunteer, advisor or beneficiary to bring evidence of a charity’s possible links with terrorism to the Commission’s attention promptly.

3. The duties of trustees and ways in which terrorist and other criminal groups seek to use charities to further their own ends
	The involvement of registered charities in the funding or support of terrorist activities is thankfully an uncommon occurrence but any links between a charity and terrorist activity are totally unacceptable. Trustees must, therefore, be vigilant, for example to ensure that charities’ assets are not used to further terrorist aims, or that a charity’s activities might be misinterpreted as supporting terrorism. Trustees, too, have a responsibility to safeguard their charity from terrorist involvement.

	3.1 Duties of trustees 3.2 Ways in which terrorist and other criminal groups use charities to further their own ends 3.3 Further considerations for trustees to combat misuse of charitable resource

	3.1 Duties of trustees
	Trustees should be aware that section 19 of the Terrorism Act 2000 provides that a person who receives information in the course of a trade, profession, business or employment that leads him/her to believe or suspect that another person has committed an offence under sections 15 to 18 (which relate to money or other property being used for the purposes of terrorism) is guilty of an offence if s/he does not disclose this to a constable as soon as is reasonably practicable.
	Likewise, section 39 of the Act provides that a person who knows, or has reasonable cause to suspect that a constable is conducting, or proposes to conduct a terrorist investigation, commits an offence if s/he:
	discloses to another anything which is likely to prejudice the investigation; or
	interferes with material which is likely to be relevant to the investigation.

	3.2 Ways in which terrorist and other criminal groups use charities to further their own ends
	The involvement of registered charities in the funding or support of terrorist activities is thankfully an uncommon occurrence but any links between a charity and terrorist activity are totally unacceptable. We must, therefore, be vigilant, for example to ensure that charities’ assets are not used to further terrorist aims, or that a charity’s activities might be misinterpreted as supporting terrorism. Trustees, too, have a responsibility to safeguard their charity from terrorist involvement.
	Terrorists and other criminal groups use charities in many ways to further their own ends. This section does not aim to be an exhaustive list, as terrorists will find ever-new ways to further their aims. Charities which operate in communities and areas where a particular proscribed organisation is dominant may need to be particularly careful. Methods of using charities by terrorist organisations may include:
	using money raised by charities to fund terrorist organisations;
	using charities to smuggle people into countries illegally;
	using residential schools as military recruitment and training centres;
	using charities set up for providing facilities for young people for organisation and recruitment;
	using charities as a base to spread propaganda; or
	using charities for money laundering purposes.
	Trustees should be especially vigilant to ensure that their charity is not inadvertently assisting a terrorist organisation by allowing the charity to be used for money laundering purposes. This is one of the more difficult areas for trustees to deal with, as the type of activity listed in the first three bullet points below may be perfectly legitimate and lawful. Trustees are reminded that unsolicited donations could be suspicious, especially if they are unable to satisfy themselves about the credentials of the people involved, or the propriety of the donation or loan.
	If offered large donations from persons unknown to the trustees, the trustees may wish to make further enquiries before accepting the donation, and may refuse a donation if satisfactory replies to enquiries are not received.
	Donations conditional upon particular individuals or organisations being used to do work for the charity may be refused.
	Offers of donations in cash, for a certain period of time, the charity to receive the interest, but the principal to be returned to the donor at the end of the specified period, may be refused.
	Donations in foreign currencies, with the provision as above, but the principal to be returned to the donor in the form of a sterling cheque, should be refused.
	Trustees who become suspicious of a donor's intentions, particularly if they wish to refuse the donation, should seek our advice under s.29 of the 1993 Act, or ask for the authority of a s.26 Order. We could also refer them to the Institute of Fundraising publication Guidance Note: The Acceptance and Refusal of Donations. They may also wish to report their suspicions to ourselves and/or the police.
	Charities also need to be alert against fraudulent solicitations via letter, fax or email to charities and trustees inviting them to assist the recovery of a large amount of money, usually, but not exclusively, from a bank account originating in Africa, in return for a large share of the money thus recovered. The aim is to obtain the charity's bank account details or letterheads that can be used for fraudulent activities, or to obtain money from the charity under the pretence that it is needed to assist in the process of recovery.
	This action is the so-called '419' (after the relevant section of the Criminal Code of Nigeria), or advance-fee fraud. This activity is on the increase and it is evident that charities remain a prime target.
	Our current advice on this topic is that any such approaches should be ignored completely and that the recipient should make no contact with the sender. If any member of staff becomes aware that a charity or individual has received an approach, then we should advise them not to reply and to pass on details of the approach to their local police station. The Serious Organised Crime Agency (SOCA) collects this information from local forces on a regular basis.

	3.3 Further considerations for trustees to combat misuse of charitable resources
	We should encourage the trustees of charities which operate overseas to familiarise themselves with our guidance Charities working internationally which is available on our website.
	If necessary, we should advise trustees sending money abroad that we do not advocate using the hawala money transfer system. If however, the charity trustees assure us that it is the best way to transport cash in the circumstances prevailing at the time, we should accept it. We should remind them that all overseas money transfers and transfers of goods should be fully documented, with that documentation retained in the UK as part of the accounting records. Such documentation should include the names of the intermediary(y)(ies), the beneficiary, the commission paid, the gross and net value of the transactions and the countries of transaction. In this way, the trustees will be able to provide a clear audit trail to satisfy the public that the charity's funds are being used appropriately.
	If you would like further information about the hawala system of money transfer, refer to an accountant.

4. Case handling issues
	4.1 The role of the Counter Terrorism Team 4.2 Registration and charitable status 4.3 Reporting of suspicions

	4.1 The role of the Counter Terrorism Team
	The Counter Terrorism Team (CCT) forms part of the Intensive Casework Unit in Compliance and Support. This is the unit dealing with the Commission's high risk compliance work. Intelligence support is attached to the team. Caseworkers in other areas of Compliance and Support or Charity Services should report any cases that highlight potential misuse of a charity for terrorist purposes to the Assessment Unit.

	4.2 Registration and charitable status
	Cases where we have concerns that a new charity has connections with terrorist organisations should be passed to the Assessment Unit and the Counter Terrorist Team informed. Legal advice should also be sought.
	If on this basis we come to the conclusion that the institution is not legally charitable then registration should be refused, or if the institution has already been registered, it should be referred to the Removals section.

	4.3 Reporting of suspicions
	If there is any suggestion of a link between a charity and a proscribed organisation, it should be reported to the Assessment Unit. Payments being made from the charity’s funds to a proscribed organisation, or other apparent connections between the charity and a proscribed organisation, should always be treated as evidence of a risk to charity property. The Head of Compliance and Support will consider the most appropriate course of action; it will be our normal policy to open a section 8 inquiry in these circumstances. Remedial action may be taken under section 18 of the 1993 Act after the institution of a section 8 inquiry and/or we may consider the institution of civil proceedings under section 32.
	Section 10A of the 1993 Act as amended by the Charities Act 2006 gives us a power to report our suspicions to the relevant authorities. It is subject to s.10A(2), which states that the power to disclose is subject to any express restriction imposed on disclosure of information to the Commission. However, there are common law rules which establish that the confidentiality of information regarding misconduct or iniquity which in the public interest ought to be disclosed will not be protected (BSC v Granada [1981] 1 All ER 417 et al).
	If we become aware that a charity trustee, or someone else involved with a charity is being prosecuted for an offence under one or other of sections 15 – 18 of the Terrorism Act 2000 or under the provisions of the Terrorism Act 2006, we should obtain legal advice. If a person is convicted of such an offence in relation to charity property, any remaining property of that charity may be liable to forfeiture by order of the court. It may be possible for steps to be taken by us to ensure that such property is not forfeited.
	Schedule 1 of the Anti-terrorism, Crime and Security Act 2001 relates to the seizure and forfeiture of terrorist "cash". So far as is in practice relevant to charities, the forfeiture provisions apply to "cash" found at any place in the UK. These powers do not depend on anyone being convicted.
	Again, we should obtain legal advice if we become aware that any "cash" belonging to a charity has been seized under these powers, as it may be possible to take steps to ensure that the "cash" is not forfeited.

Index to further related information