Counter-terrorism financing and Non-profit organisations (NPOs)
There is evidence of non-profit organisations (NPOs) being used, either knowingly or unwittingly, to collect and distribute financial assistance to terrorists.
While a number of NPOs will consider that the likelihood of being used to assist terrorism is quite small, all NPOs may be subject to criminal penalties if they do not take proper precautions to prevent their organisation being used in such a manner.
Recent changes to the Criminal Code have introduced tougher criminal penalties for individuals and organisations involved in the movement of funding for a terrorist organisation, individual, or act.
Importantly, these penalties may apply even where an organisation is unaware that they were involved, but did not take reasonable precautions to prevent this movement of funds to occur.
It is also important to note that penalties for terrorism financing reflect the severity of the terrorism offence, ranging from financial penalties to life imprisonment.
Why is this important?
The Australian Government is committed to preventing terrorism in Australia. (Visit ‘What Governments are Doing’ to see how governments are working to fight terrorism and increase the security of all Australians.)
Australia is also a part of international efforts to combat terrorism.
This includes obligations to implement international standards to combat terrorism financing, which stem from our membership of the Financial Action Task Force (FATF). FATF Special Recommendation VIII requires member countries to “combat the misuse of non-profit organisations for the purpose of terrorism financing”.
It is important that Australia contributes to reducing opportunities for terrorism financing globally. As other countries put systems in place to protect their non-profit sector, terrorists will look to those countries where lack of awareness means that the non-profit sector is more vulnerable to abuse. Australia does not want its non-profit sector to become an easy target.
Critically, it is widely recognised that the NPO sector plays a vital role in the Australian economy, providing important and often essential services to the community. Any misuse of NPOs for the purpose of terrorism financing not only facilitates terrorist activity, but can undermine the good work of NPOs and have a serious impact on public trust.
Why are NPOs at risk?
Terrorist organisations can take advantage of NPOs to infiltrate the sector and misuse NPO funds and operations for terrorist activity.
International research has shown that NPOs are vulnerable to misuse for the purpose of terrorism financing for the following reasons
- NPOs enjoy the public trust
- NPOs can have access to considerable sources of funds, and
- NPOS are often cash-intensive.
Furthermore,
- some NPOs have a global presence that provides a framework for national and international operations and financial transactions, and
- some NPOS regularly work within or near those areas that are most exposed to terrorist activity.
What is being done to reduce the risk to NPOs?
The Australian Government has developed a strategy, informed by international experience, to reduce the risk of NPOs being used to financially assist terrorists. This strategy has two important components:
- Outreach to the sector – raising awareness and providing relevant, up-to-date information on terrorism financing risks.
- Voluntary, Best Practice Principles – to be developed in consultation with the sector to assist NPOs protect themselves.
What are the best practice principles?
The Government recognises the importance of ensuring that any regulation does not disrupt or discourage legitimate charitable activities.
The Australian Government has developed a draft document, ‘Voluntary, Best Practice Principles for Non-Profit Organisations – Counter-Terrorism Financing’. This draft presents a starting point for further discussion.
How will consultation take place?
Copies of the Draft Principles for NPOs on Counter-Terrorism Financing (CTF) can be downloaded here or requested by mail (see contact details below).
Comments can be sent by email or by mail (see contact details below) with the words ‘Draft Principles for NPO on CTF’ in the subject header.
Comments should be submitted no later than Close of Business, Friday 18 July 2008.
Email: aml.reform@ag.gov.au
Mail:
Draft Principles for NPOs on CTF
Strategic Policy Coordination Branch
Attorney-General’s Department
Robert Garran Offices
National Circuit
BARTON ACT 2600
