Checklist: protecting your charity against terrorism financing

Apply governance standard 3: compliance with Australian law

Summary: charities must not commit a serious offence (such as fraud) under an Australian law or breach a law that may result in a penalty of 60 penalty units (currently $10 200) or more.

Does your charity check that it does not provide support to the individuals and organisations associated with terrorism, or contravene Australian sanctions laws?

Like all Australians, a registered charity must comply with Australian law. When an organisation registers as a charity, it agrees to meet all of its obligations to the ACNC, including ACNC governance standard 3 which requires compliance with Australian laws.

International obligations

Australia has an international obligation to combat terrorism financing as a party to the International Convention for the Suppression of the Financing of Terrorism and pursuant to UN Security Council resolutions on terrorism which are given effect in Australia through the Charter of the United Nations Act 1945 (Cth). Australia is also a member of the Financial Action Task Force (FATF). The FATF is an inter-governmental body which develops and promotes global standards for combating money laundering and terrorism financing.

Australian offences

Significant penalties apply under the Charter of the United Nations Act 1945 (Cth) and the Autonomous Sanctions Act 2011 (Cth) for contravening a range of sanctions measures. These sanctions measures include targeted financial sanctions which prohibit making assets of any kind available to a listed person or entity, or using or dealing with a listed person or entity’s assets. These offences have extra-territorial effect. This means if your charity makes funding or other assets available to a listed person or entity, whether overseas or in Australia, this could result in prosecution under Australian law.

Australia’s terrorist act offences and terrorist organisation offences are set out in the Criminal Code Act 1995 (Cth) (‘the Criminal Code’). The Criminal Code sets out the penalties (up to 25 years’ imprisonment) for providing support intentionally or recklessly to a terrorist organisation.

Lists of terrorist organisations, individuals and other ‘entities’ to check

List of terrorist organisations
The Australian National Security website provides an up-to-date list of the relevant names and aliases of listed terrorist organisations under the Criminal Code.

Consolidated list
The Department of Foreign Affairs and Trade maintains a list of all persons and entities subject to targeted financial sanctions or travel bans under Australian sanctions laws (Consolidated List). Listings for targeted financial sanctions are distinct from listings under the Criminal Code and impose separate legal obligations.

It is a serious criminal offence making assets of any kind, including funds, available to a listed person or entity, or to use or deal with a listed person or entity’s assets.

Financial transactions with Iran
In addition to the sanctions measures set out above, Australia has imposed particular restrictions on financial transactions with Iran in response to international concern about terrorist financing threats emanating from that country. Since 1 March 2012, transactions of $20,000 or more between Australia and Iran are prohibited without prior authorisation from the Department of Foreign Affairs and Trade. This is irrespective of whether the transaction is carried out through electronic funds transfer, transfer under other remittance arrangements, or through a bill of exchange, promissory note or letter of credit.

Questions to ask

  • Does your charity send money or have operations in a country in relation to which sanctions have been imposed, or in which listed persons or entities are known to operate?
  • Does your charity take reasonable precautions and exercise due diligence to avoid contravening Australian sanctions laws?
  • Are your charity’s responsible persons, staff and volunteers aware of the list of terrorist organisations and the Consolidated List, and do they understand the legal impact of listings?
  • Does your charity have appropriate controls in place to manage the risk that beneficiaries, partners, stakeholders, staff or other people associated with your charity are listed as a terrorist organisation or for targeted financial sanctions?
  • Do you have an understanding of the background and affiliations of your board members, employees, fundraisers, volunteers and partners?

Steps you can take