Money laundering and bribery

At first sight it may not seem that charities need to be concerned about money laundering, terrorism funding, bribery and such like but they are at threat and failure to observe these threats can incur severe penalties.

’A Report on Abuse of Charities for Money Laundering and Tax Evasion’ published by the Organisation for Economic Cooperation and Development in 2009 found that while tax rules vary around the world for charities, most nations give them a preferential tax status that helps them operate within their budgets. However, this preferential status can sometimes be misused by criminals.

Some charities work in areas or undertake activities which involve greater exposure to risks such as fraud, financial crime, extremism or terrorism. The Charity Commission for England & Wales provides the follow guidance on how trustees can assess the financial risks faced by their charities and what steps they can take to mitigate these risks:

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Charities: due diligence, monitoring and verifying the end use of charitable funds (Compliance toolkit chapter 2)
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Protect your charity from fraud and cyber crime (Compliance toolkit chapter 3)

Charities and the Bribery Act 2010

The

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Question of the week: Where a trust of a life policy otherwise falls within the definition of an 'excluded trust' set out in paragraph 4 of Schedule 3A of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, does it lose that excluded trust status if it opens a non-interest bearing bank account in order to pay insurance premiums for the policy?

This Q&A considers whether a trust of a life policy, which otherwise falls within the definition of an 'excluded trust' as set out in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, Sch 3A, para 4 loses its excluded trust status if it opens a non-interest bearing bank account to pay insurance premiums for the policy.

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