Terrorism: charities may be told to vet partners

Counter-terrorism guidelines to be issued by the Charity Commission later this year are likely to encourage charities working overseas to check their trustees and beneficiaries against the Government's list of proscribed individuals.

The list, drawn up by the Treasury, contains the names of people whose assets have been frozen for reasons connected with terrorism. A commission spokeswoman said the list would be used as part of a charity's duty of care to know more about its foreign partners.

The news comes before a meeting next month between the commission, intelligence agencies and sector representatives to discuss guidelines to help charities reduce their risk of terrorist involvement.

In an exclusive interview with Third Sector, a Scotland Yard terrorist finance expert said the meeting would provide a chance for charities to discuss security concerns and suggest improvements in self-regulation.

Detective Inspector Paul Newham, a senior member of the National Terrorist Finance Investigation Unit, said that his team usually launched about 12 investigations a year into UK charities. He said it would be "fairly straightforward" for charities to check their partners against the Treasury list.

A May 2007 Treasury and Home Office report on protecting charities from terrorist abuse suggested religious charities were particularly at risk of terrorist involvement.

But Newham said: "I don't think this is about targeting faith-based charities or cultural groupings. It's not our approach.

"This is about working in partnership with the sector - the whole of the sector is vulnerable."

Newham warned that the commission's limited international capacity raised difficulties when it was investigating funds from UK charities after transfer abroad.

"It's a potential weakness that people receive aid for one reason and then the purpose for which it was received cannot be adequately audited later," he said. "It's clear there aren't as many controls abroad."

Currently, the only body dealing with international charity-related protocols is the Financial Action Task Force, an inter-governmental policy body that was established by the G7 countries in 1989.

An FATF report that was published in March said: "The sheer volume of funds and other assets held by the charitable sector means that the diversion of even a small percentage of these funds to support terrorism constitutes a grave problem."



A case in the North Caucasus highlighted the role a charity played in collecting money and transferring it to militia units. It is outlined in a recent report from the Financial Action Task Force, based at the Organisation for Economic Cooperation and Development, about charities being used to distribute funds for terrorism.

Money raised in what the report calls "a region with a high level of activity by extremist groups" was transferred to a local company and a foreign citizen based in Russia, and then to the charity. An analysis of its expenditure showed different ways of moving funds: direct transfers to a 'welfare unit' in a known militant organisation; cash withdrawals couriered to the North Caucasus; and onward transfers to apparently legitimate charities in the same area.

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