This Policy gives guidance on what Islamic Welfare Trust trustees and staff are expected to do to ensure that the Charity fulfils its legal obligations to help counter money laundering. All charities are at risk of being exploited by criminals and terrorists. Money laundering is the process by which criminals attempt to conceal the true origin and ownership of the proceeds of their criminal activity. There are legal obligations for reporting suspected money laundering and the suspected provision of support to terrorist organisations. Anyone who breaches these obligations could face criminal sanctions.
Vigilance and Checks
- In order to be satisfied that donations to the Charity are from a credible source the following questions should always be asked before acceptance about any unusual donation or offer of support, or any donation or offer of support over £10,000:
- What support is being proposed by the donor or sought by the Charity and how closely does it fit the Charity’s requirements or aspiration?
- Who is the donor and does the donor have good standing?
- Does the source raise concerns (see 5.3)?
- What sort of terms is the donor wishing to impose?
- What is the motive for the offer and what will be the effect of accepting it?
- Is there an actual or potential risk of detriment to the Charity? If so, what is the extent of the risk and the likelihood of it materialising?
The Trustees should ensure that all staff receiving donations create a written record confirming that they have considered the above questions; that no suspicions of money laundering or other criminal activity arise; and that a copy of the record has been passed to the Chairman to record the donations, the Chairman will verify that donated funds have been spent in a manner consistent with the purpose and objectives of the Charity.
- Particular vigilance should be applied to:
- Unsolicited donations offered at short notice or via an unknown third party;
- Donations offered in the form of a loan;
- Donors who ask for all or part of a donation to be returned at a later date;
- Donations offered for a specific project where the donor insists that a particular third party is used as a partner or supplier on the project;
- Donations offered conditional upon the donor having control over a revenue or investment benefit from the donation, such as a share of income generated by the donation or the transfer of surplus capital at the donor’s behest;
- Payments from any organisation (including partner charities) that are to be held in a Charity bank account for a period of time and then returned to the organisation or passed onto another organisation (known as conduit funding);
- Donations that have unusual or disproportionate conditions attached;
- Donations where there are grounds for reasonable suspicion that it represents the proceeds of crime, or is not legally or legitimately owned by the donor; and
- Proposals that the Charity should make offers of financial support, or loans of property or facilities.
- Suspicions of criminal activity regarding any donation, grant, transfer of funds or contact with third parties should be reported to the Trustees.
- Trustees will be responsible for assessing the risk of any matter reported and deciding whether or not to refer the matter to the relevant authorities.
- Any suspicion that any person or organisation is providing funds or support to a terrorist organisation should be reported to the Trustees. The Trustees will consider whether to notify the relevant authorities.
- When making offers of financial or other support or services internationally a risk analysis should assess partner relationships and organisational integrity, financial transparency and accountability, project planning and monitoring and include appropriate risk controls and risk reduction measures. In geographical areas that are insecure or dangerous, the analysis should include the security context and an analysis of political authorities and informal power structures in the area.
Training and Advice
- Staff likely to encounter money laundering will be provided with training
- Staff should contact Trustees for advice about due diligence on those individuals and organisations that give money to, receive money from or work closely with the Charity, so that they may have reasonable assurance about the provenance of funds; have confidence that they know the people and organisations the Charity works with; and be able to identify and manage associated risks.
- Donations made in foreign currencies on condition that all or part of the principal sum should be returned to the donor in sterling should be refused.
- Donations should be refused where satisfactory answers to investigations carried out, as outlined in 2.1 above, are not received.
- Further to the principles set out in the Charity’s Code of Behaviour policy, the Charity will not accept funds or gifts in kind in circumstances where:
- The donation is made anonymously (other than through the collection boxes or online donations), through an intermediary who is not prepared to identify the donor to anyone at the Charity, without the consent of the Trustees; or
- The donor is believed to have acted illegally in the acquisition of funds, for example where funds are tainted because they may be the proceeds of crime; or
- The donor is not believed to have legal or legitimate ownership of the funds or gifts in kind offered to the Charity.
- The Charity will consider whether to redirect or return donations subsequently found to have been accepted in breach of this Policy.
A decision to refuse any donation should be referred to the Trustees and any exception to any of the principles set out in sections 2 or 5 must be approved by the Trustees.