Overseas aid charities and terrorist financing

The ACNC has identified the misuse of funds for terrorism financing as a risk where charitable funds are sent overseas, even if their intentions are to help in line with their charitable purposes.

It is important that charities use due diligence and have proper processes in place to ensure that their charitable funds are safe from misuse and are being used for their charitable purpose.

The Department of Foreign Affairs and Trade (DFAT) has issued Best Practice Principles for non-profit organisations.

The principles include:

  • NPOs should know their beneficiaries.
  • NPOs should know the third parties they work with.
  • NPOs should regularly check that beneficiaries and third parties are not listed individuals or organisations.
  • NPOs should conduct financial transactions where possible through regulated financial institutions, such as banks or building societies.
  • NPOs should conduct background checks of management, staff and volunteers.
  • NPOs should keep records of what assistance has been provided, who has received it, and the details of any third parties involved.
  • NPOs should conduct follow-up checks where possible to make sure that the assistance was delivered as intended.
  • NPOs should report suspicious activity to the Australian Federal Police.

DFAT maintains a ‘Consolidated List’ of persons and entities which are subject to a targeted financial sanction imposed by a resolution of the United Nations Security Council. It is an offence under Australian law to use or deal with an asset owned or controlled by, or to make an asset available to, a person or entity included on this list.

The Attorney-General’s Department maintains a ‘List of Terrorist Organisations’ which have been proscribed by the Government as terrorist organisations under Division 102 of the Criminal Code Act 1995.

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