alert icon Registered charities (and organisations seeking registration as a charity) that operate overseas will soon have to comply with the External Conduct Standards. The Standards are expected to come into force in late July, 2019.

What the External Conduct Standards are

The External Conduct Standards are a set of standards that govern how a registered charity must manage its activities and resources outside Australia.

The Standards require charities to take reasonable steps to ensure appropriate standards of behaviour, governance and oversight when undertaking activities or providing funding overseas.

They are intended to promote transparency and provide confidence that resources sent, or services provided, overseas reach legitimate beneficiaries and are used for legitimate charitable purposes. The Standards also seek to protect vulnerable people overseas.

Which charities must comply

Charities that operate outside Australia are required to comply with the External Conduct Standards.

Importantly, ‘operating outside Australia’ is not limited to major programs or projects. A charity is generally considered to operate outside Australia even if its overseas activities are just a minor part of its work or if it only sends a small amount of money overseas. This is true even when such activities are conducted through a third party.

Basic Religious Charities must comply with the External Conduct Standards if they operate outside Australia, even though they don't have to comply with the ACNC's Governance Standards. Charities that do not operate outside Australia are not subject to the External Conduct Standards - however, these charities still must comply with the Governance Standards.

The External Conduct Standards

There are four External Conduct Standards that cover certain aspects of a charity's overseas operations.

Standard 1: Activities and control of resources (including funds)

This Standard covers the way a charity manages its activities overseas, and how it is required to control the finances and other resources it uses overseas.

alert icon Read more about External Conduct Standard 1.

Standard 2: Annual review of overseas activities and record-keeping

This Standard covers the requirements for a charity to obtain and keep sufficient records for its overseas activities.

alert icon Read more about External Conduct Standard 2.

Standard 3: Anti-fraud and anti-corruption

This Standard covers the requirements of a charity to have processes and procedures that work to combat fraud and corruption in its overseas operations.

alert icon Read more about External Conduct Standard 3.

Standard 4: Protection of vulnerable individuals

This Standard covers the requirement for a charity to protect the vulnerable people that it works with when conducting its overseas operations.

alert icon Read more about External Conduct Standard 4.

How the ACNC regulates the External Conduct Standards

The ACNC regulates the External Conduct Standards according to our regulatory approach. We will take action if we have information that indicates a charity has seriously or deliberately breached the External Conduct Standards.

We expect each charity that is required to comply with the External Conduct Standards takes the time to understand the Standards and how they affect its operations. We also expect that each charity required to comply takes steps to ensure its meets the Standards.

A charity does not need to submit anything to the ACNC to show it meets the External Conduct Standards but it must be able to provide evidence of meeting the Standards that they can provide if requested.

alert icon Read more about our regulatory approach.

External Conduct Standards and Governance Standards

The External Conduct Standards will apply in addition to the existing ACNC Governance Standards.

The External Conduct Standards operate in a similar way to the Governance Standards, as both impose reasonable levels of oversight that must be met, rather than specific steps which must be taken by charities.