Requirement under section 19 of the Terrorism Act 2000 to report certain terrorist financing offences
The Charity Commission, the independent regulator of charities in England and Wales, is issuing this alert to charities as regulatory advice under section 15(2) of the Charities Act 2011 – it is particularly relevant for trustees of charities and charitable appeals which are operating in countries or areas where terrorist groups or organisations exert control, are known to operate or where there is a risk of terrorism.
Following a small number of recent cases involving the loss of charitable assets (both goods and funds) to proscribed terrorist groups overseas the Charity Commission (‘the commission’) has published this alert. The commission has done this in collaboration with its partner SO15’s National Terrorist Financial Investigations Unit (‘SO15 - NTFIU’) - Metropolitan Police (Counter Terrorism Command). This alert is being published so as to raise awareness amongst charities - including their trustees, employees and volunteers - of reporting requirements under counter-terrorism legislation.
The commission is alert to the risks charities and their staff face when working in unstable and dangerous countries and locations and recognises the potential risk of loss to terrorist groups; it is for this reason that all charities working in areas where there is a risk of terrorism need to assess and manage the risks whilst always acting reasonably and in the best interests of their charity.
Trustees must remain alert and vigilant to the risk to their charity’s operations as a result of proximity to terrorist groups or organisations. This alert is being issued specifically as a result of criminal investigations conducted by SO15 - NTFIU into failure to comply with the requirements of section 19 of the Terrorism Act 2000 (‘TACT’). These investigations took place as a result of referrals by the commission to SO15 - NTFIU after the concerns were identified through its investigative and enforcement work.
The commission has identified through its work that knowledge and understanding is low amongst a number of charities – both large and small – in respect of the reporting requirement under section 19 of TACT. The commission, in issuing this alert, is raising awareness of the legal requirement to report suspicions or beliefs regarding terrorist financing offences with charity trustees so that they do not breach UK counter-terrorism legislation.
Section 19 of TACT creates an obligation for a person who, during the course of their employment ‘believes’ or ‘suspects’ another person has committed an offence under section 15-18 of TACT, which are terrorist financing offences. Such persons must report it as soon as is reasonably practicable, along with the relevant information to a ‘constable’.
Reporting to a ‘constable’ can include reporting to an officer of the NCA (see endnote 1). Employment includes unpaid employment and/or volunteering, and therefore applies to charity trustees and other volunteers as well as paid employees. A person found guilty of the offence under section 19 of TACT shall be liable on conviction to imprisonment to a maximum of five years or to a fine or both.
There are a number of ways in which charities can report their suspicions or beliefs so as to comply with their legal obligations under section 19 of TACT, such as:-
Sections 15-18 of TACT relate to terrorist financing offences and include, but are not limited to, terrorist fundraising, entering into a funding arrangement and use of money or other property for the purposes of terrorism. Sections 15-18 of TACT have extra-territorial effect - consequently it does not matter whether the incident, giving rise to the offence, occurred in the UK or overseas. The requirement to report under section 19 of TACT only relates to suspicion or belief that an offence under section 15-18 has been committed.
The intended use or diversion of charitable funds for terrorist purposes is completely unacceptable and undermines public trust and confidence in charities. This will be treated as evidence of misconduct and mismanagement in the administration of a charity. Counter-Terrorism legislation is in place to enable law enforcement to tackle abuse and negligence where it exists and where charities or individuals have acted intentionally or irresponsibly.
Trustees must therefore ensure that their charity does not commit any offence under UK counter-terrorism legislation and that they comply with their charity law duties and responsibilities.
Reporting concerns to the commission
The commission expects trustees to ensure that any suspicions or beliefs reported to a ‘constable’ under section 19 of TACT are also reported to it under the commission’s Serious Incident Reporting framework.
In the event that reports are received by the commission which do not confirm that a disclosure has been made to a ‘constable’ the commission will report it directly so as to comply with s.19 of TACT; reporting suspicions or beliefs to the commission, another government agency or department other than the NCA or the Police will not discharge the reporting duty under section 19 of TACT.
In the cases that the commission dealt with and which were subsequently investigated by SO15 - NTFIU, there was no indication that the charities involved had knowingly allowed their assets to be used for terrorism. However, whilst the charities had their own policies and procedures for reporting such incidents and losses internally, these did not include reporting such instances to a ‘constable’ in accordance with section 19 of TACT. SO15 - NTFIU’s investigation identified that in one instance, due to the delay between the time that the losses were identified and raised internally within the charity and then being reported to the Police that, in its view, an offence under section 19 of TACT had been committed. In this instance it was SO15 - NTFIU’s view that although there was evidence that an offence under section 19 of TACT had been committed it was not in the public interest to prosecute. This view was supported by the Crown Prosecution Service (‘CPS’) and a prosecution did not proceed in this instance.
The decision to prosecute, or not, any offence is made by the CPS based on a matrix of factors, as outlined in the Code for Crown Prosecutors (see endnote 2) which include:-
- the identification that an offence may have been committed
- a decision by the Police (or other agency) to investigate
- consideration of evidence obtained and whether to refer the case for a charge to the CPS
- consideration by the CPS whether there is an evidential basis for prosecution including culpability and whether it is in the public interest
Although in the cases investigated by SO15 - NTFIU there were no prosecutions this does not mean that future failures to comply with section 19 of TACT will not be prosecuted; a decision is made on a case-by-case basis depending on its merits and individual factual circumstances.
The commission’s published guidance and in particular Chapter 1 of its Compliance Toolkit for trustees contains further information on UK counter-terrorism legislation which trustees must ensure they comply with. If charities fail to comply with section 19 of TACT in the future, separate from any criminal offences that may be committed, the commission will consider taking further regulatory action.
In summary, the advice for charity trustees is:-
- report suspicions or beliefs regarding terrorist financing offences as soon as is possible to a ‘constable’ so as to comply with legal obligations under s.19 of TACT
- report such matters simultaneously to the commission
- ensure your charity’s policies reflect the obligations under s.19 of TACT and that there is a process, once concerns are identified, for this to be reported accordingly
- ensure staff are adequately trained and alert to the legal requirements to report
- there are mechanisms in place to ensure that country offices, agents/staff or other partners based overseas to report concerns promptly
- TACT states that, for the purposes of s.19 a ‘constable’ includes an Officer of the Serious and Organised Crime Agency – now the NCA.
- Crown prosecutors