Counter-Terrorism and Funds Handling Policy
1. Title of Policy
IHO Global Counter-Terrorism and Funds Handling Policy.
2. Purpose of Policy
This policy sets out IHO Global’s commitment to comply with Australian laws relating to counter-terrorism and handling of funds through
procedures and processes to ensure that funds and resources are not being used directly or indirectly to support terrorist groups or activities.
IHO Global is a Public Company Limited by Guarantee and a Public Benevolent Institution, a charity registered with the Australian Charities and Not-for-profits Commission (ACNC). IHO Global undertakes activities that fall within the scope of its objects including welfare, relief and development activities in the Australian Territories and in developing countries.
4. Legislative Framework
The United Nations Security Council Resolution 1267 and succeeding resolutions mandate all states to freeze without delay the funds and other financial assets or economic resources of designated terrorist individuals and entities. Further, UN Resolution 1373 states:
For Australia to comply with its international obligations to the UN, the Australian government introduced legislation to make it a criminal offence to hold assets that are owned by terrorist organisations or individuals, or to make those assets available to them. Australian legislation prohibits dealing with listed terrorist organisations and/or proscribed persons or entities.
The Department of Foreign Affairs and Trade maintains a Consolidated List of all individuals and entities to which this terrorist asset freezing regime applies. For additional information on Australia’s international obligations, please see: Australia’s terrorist asset freezing regime.
In addition to the Consolidated List, the Australian Government also maintains information about groups that are proscribed as terrorist organisations under the Australian Criminal Code,Part 5.3.
A person finances terrorism when they:
- intentionally collect or provide money, and
- are reckless about whether the money will be used to facilitate or engage in a terrorist act.
It does not matter if:
- they provide or collect the money on behalf of someone else
- the terrorist act does not happen
- the money will not be used for a specific terrorist act or for more than one terrorist act.
It is illegal to finance terrorism under Division 103 of the Criminal Code Act 1995.
The National Security Australia website provides more detailed counter-terrorism information. If a group is listed as a
‘terrorist organisation’ it is an offence to:
- receive funds from or make available funds to the organisation
- provide support or resources to the organisation
- direct the activities of the organisation
- recruit persons to the organisation
- receive training from or provide training to the organisation
- provide support or resources to the organisation
IHO Global acknowledges and complies with the guidance given by DFAT’s Safeguarding your organisation against terrorism financing: A guidance for non-profit organisations.
5. Statement on Commitment
IHO Global is committed to handling donor funds with honesty, transparency and accountability in our financial operations. The internal financial control procedures and risk management processes implemented by IHO Global minimise the risk and ensure that funds are not misused, but are properly managed and disbursed.
IHO Global will use its best endeavours to ensure that overseas recipients of IHO Global funds will adopt policies and procedures that enable them to comply with relevant Australian anti‐terrorist legislation.
IHO Global adopt best practices principles to ensure that its activities are not associated with any terrorist individual or organisation and that its funds are not misused to further terrorism or support any terrorist activity.
The partners of IHO Global are required to sign a Memorandum of Agreement securing their acknowledgement and consent regarding their
obligation to comply with the counter-terrorism legislation as outlined in article (4) of this Policy.
- Best Practice Principles: are the principles designed to safeguard against terrorism financing which are published by the Australian Government in its guide entitled Safeguarding your organisation against terrorism financing. A guidance for non-profit organisations, which are set out in Schedule A.
- Consolidated List: list of terrorist individuals and entities subject to targeted financial sanctions under the United Nations Security Council’s Resolutions 1267 and 1373 and maintained by DFAT.
- Criminal Code: Criminal Code Act 1995 (Cth) as amended
- DFAT: Australian Department of Foreign Affairs and Trade.
- List of Terrorist Organisations: list of organisations proscribed as terrorist organisations under the Criminal Code and available on the National Security Australia website.
- Standard of Overseas Aid Fundraising Practice: the standards published by the Fundraising Institute Australia for conducting overseas aid fundraising activities within an ethical framework.
- UN Charter Act: Charter of United Nations Act 1945 (Cth) as amended.
- Partners: any organisation or person that IHO Global works with, or is involved with, about any relief or development programs or projects. Partner Due Diligence Checklist means the checklist set out in Schedule B.
- Personnel: Personnel are employed by IHO Global, whether full-time, part-time, casual or on a voluntary basis.
- NPO: Not-for-profit Organisation.
IHO Global is obliged to adhere to Australian laws and international laws to combat terrorism.
The Australian Government has enacted legislation to combat terrorism and to give effect to Australia’s international obligations to combat terrorism. In particular, the following legislation:
- Part 5.3 of the Criminal Code; and
- Part 4 of the UN Charter Act.
Under the Criminal Code, there are a range of offences relating to financing terrorism, including receiving funds from or making funds available to a terrorist organisation and providing support or resources to a terrorist organisation. The list of organisations proscribed by the Australian Government as terrorist organisations under the Criminal Code is available on the National Security Australia website at:
The Australian government has also enacted legislation under the UN Charter Act to meet its international obligations under the United Nations Security Council Resolutions 1267 and 1373 to freeze the assets of terrorists. The UN Charter Act makes it an offence to directly or indirectly make any asset available to a proscribed terrorist individual or organisation. The consolidated list of proscribed terrorist individuals and organisations subjected to the asset freezing regime is maintained by DFAT and available from DFAT’s website at:
The Australian government’s National Security Hotline for reporting any suspected terrorism related activity is Ph: 1800 1234 00
Failure to comply with Australian Government requirements could make IHO Global liable to significant penalties as well as severely affect the reputation of IHO Global.
8. Scope of the Policy
This Policy applies to all IHO Global personnel in connection with any relief, development and welfare activities undertaken by IHO Global.
9. Financial Control Under IHO Global Constitution
In accordance with the Constitution of IHO Global:
- 1 IHO Global shall maintain a fund to be known as the IHO Global Gift Fund to be used for the objects of IHO Global. A separate bank account is opened and maintained for the Fund and the assets of the Fund must not be used for any purpose other than for the objects of IHO Global. IHO Global must keep written financial records which:
- (a) correctly record and explain its transactions in relation to the Fund;
- (b) accurately record all receipts and outgoings in relation to the Fund; and
- (c) would enable true and fair financial statements of the Fund to be prepared and audited.
- 2 A Funds Committee is established to manage the Fund, which is made up of a majority of persons who have a degree of responsibility to the general community by reason of their tenure of some public office or their occupation or their standing in the community.
10. Procedures and Processes
IHO Global shall ensure that it has appropriate financial control and risk management mechanisms for the management and disbursements of donated funds to ensure that funds are properly accounted for and used for the specific purposes for which they have been given.
IHO Global shall take all reasonable practicable efforts to ensure that any funding provided by IHO Global are not used to support terrorist activity.
IHO Global acknowledges and adopts the Best Practice Principles to safeguard against terrorism financing.
IHO Global shall adopt the following processes and procedures for the management and distribution of donated funds. These processes and procedures ensure that funds are used for the purpose intended and ensure that it avoids dealing with individuals and organisations associated with terrorism.
- 1IHO Global personnel are made aware of thisPolicy and the Best Practice Principles through appropriate induction and training.
- 2IHO Global personnel are made aware of their obligations under Australian law relating to terrorist financing and of the level of risk that IHO Global may be exposed to in respect of terrorist financing.
- 3Should IHO Global engage in any fundraising campaign, itshall use its best endeavours to follow the standards articulated in the Standard of Overseas Aid Fundraising Practice.
- 4IHO Global carries out proper due diligence on all partner organisations including:
- Verifying their identity;
- Knowing what their business is, their track record, credentials and reputation in the sector;
- Assessing their capacity to undertake the specific project with IHO Global; and
- Assessing whether they have adequate internal financial control measures for the management and disbursement of funds and to minimise misuse of funds and resources.
In carrying out the due diligence on partner organisation, consider the issues and questions set out in the Partner Due Diligence Checklist.
- 5 In all partnership agreements include:
- (a) an expressed acknowledgement and undertaking by partner organisations to disburse funds received solely for the intended purpose of the project and for no other purpose and a right for IHO Global to terminate the agreement should the partner organisation fail to do so;
- (b) an obligation on partner organisations to keep separate financial records for the project funds received, keep accurate, and up to date financial records of all financial transactions concerning project funds which substantiate all expenditure, and make them available for inspection by IHO Global; and
- (c) a requirement on partner organisations to cooperate fully in any audit of funds provided by IHO Global for the project.
- 6 Take all reasonable measures to establish the identity, credentials and good standing of its partner organisation and beneficiaries where there is a reasonable risk of terrorist financing. In particular, checking the Consolidated List and List of Terrorist Organisations to ensure that partner organisations and intended beneficiaries are not on the lists.
- 7 Have in place proper internal controls to ensure that all funds are fully accounted for. Internal controls will ensure that funds are spent in a legitimate manner that is consistent with stated objects under IHO Global’s Constitution. It will ensure that the disbursement of funds is consistent with the purpose and objectives of the particular program or project.
- 8 Wherever possible, only conduct financial transactions through formal channels, using reputable banks and other regulated financial institutions.
- 9 Keep proper records of all financial transactions.
- 10 Monitor and verify end use of funds to partner organisations and beneficiaries.
- 11 Report to the Australian Federal Police or the National Security Hotline any suspicious activity or if any link is discovered between funds provided by IHO Global and a terrorist organisation or terrorist individual.
- 12 Immediately withdraw all support, including any funding, if IHO Global discovers that any partner organisation or any beneficiary of IHO Global funds is on, or is subsequently added to, the Consolidated List or List of Terrorist Organisations.
- 13 Make all partner organisations aware of IHO Global’s obligations under Australian law in respect of terrorist financing. Partner organisations are to be made aware of the need to adopt similar measures to ensure that the funds they receive from IHO Global do not go towards supporting any terrorist organisations or individuals.
- 14 In any partnership agreement with a partner organisation, include appropriate provisions requiring that the partner organisation use its
best endeavours to ensure that any funding provided by IHO Global is not used to support any organisations or individuals associated with terrorism.
- 15 Require partner organisations to provide accounting reports to show how IHO Global funds have been spent and distributed.
IHO Global’s Control of Funds and Counter Terrorism Policy will be reviewed on an annual basis, or as otherwise determined by the Board of Directors of IHO Global.
- Safeguarding your organisation against terrorism financing: A guidance for non-profit organisation, Australian Government, 2009.
- Compliance Toolkit: Protecting Charities from Harm, Tool 8: Know your Partner, Charity Commission, UK, 2011.
Best Practice Principles
- 1 NPOs must make all reasonable efforts to ensure that funds are not being directed to terrorist activities.
- 2 NPOs operating in Australia must comply with Commonwealth, State and Territory laws.
- 3 Australian NPOs should comply with the laws of any foreign countries that they operate in.
- 4 NPOs should understand the level of risk that their organisation may be exposed to in relation to terrorism financing, and where risk is evident, take necessary precautions.
- 5 NPOs should ensure that management, personnel and volunteers are aware of the level of risk that their organisation may be exposed to in relation to terrorism financing and, where risk is evident ensure that precautions are in place.
- 6 NPOs should know their beneficiaries.
- 7 NPOs should know the third parties they work with.
- 8 NPOs should know the third parties they work with.
Transparency and Accountability
- 9 NPOs should conduct financial transactions where possible through regulated financial institutions, such as banks or building societies.
- 10 NPOs should conduct background checks of management, personnel and volunteers.
- 11 NPOs should keep records of what assistance has been provided, who has received it, and the details of any third parties involved.
- 12 NPOs should conduct follow-up checks where possible to make sure that the assistance was delivered as intended.
- 13 NPOs should report suspicious activity to the Australian Federal Police.
Using Third Parties
Where funds are provided to a third party:
- 14 the NPO should make all reasonable efforts to ensure the third party is aware of, and seek assurance that the third party will comply with, all applicable laws. The NPO should make all reasonable efforts to ensure the third party is aware of, and seek assurance that the third party will comply with these Best Practice Principles.
Partner Due Diligence Checklist
|‘Know Your Partner’- key issues to think about|
Using Third Parties
Are you satisfied with the partner’s status and governance? Consider checking:
Carry out internet searches and review local media to identify if, for example, the organisation has any links with political activity.
Representatives and Structures
Who are the key senior personnel? Have you checked that they do not appear on the Consolidated List?
Is the organization’s size, management and operational structure fit for purpose?
Can you be reasonably sure the organisation is able to deliver the services required?
How easy is it to contact the organisation’s senior representatives and other key staff?
Practical Working Relationship
What do you know about the partner? Have you worked with them before?
Does your experience of working with the partner in the past raise any concerns?
Are its aims and values compatible with those of IHO Global?
Are there likely to be any language, communication or cultural problems?
How can these be overcome?
Is the partner already working with other organisations? Will this present any problems?
Are there arrangements in place to enable you to monitor the Charitable services provided?
Are you confident about any third parties involved in monitoring and feedback?
Accounting and Internal Financial Controls
Are the partner’s financial controls generally adequate and reliable?
Are its financial policies and procedures documented?
What recording and audit systems are in place, and are these suitable for the type of work being under taken and the scale of funding involved?
Will IHO Global be able to inspect the partner’s financial records?
Are there any concerns about banking local arrangements and the movement of funds? If so have these been addressed satisfactorily?
Does the partner have adequately trained and qualified staff to manage funds, maintainaccounts and report back to IHO Global?
How closely do the partner’s senior staff monitor its more junior staff?
External Risk Factors
What special risk factors apply to the area in which the partner organisation will operate? Will the IHO Global be able to deal with these?