Federal Budget Allows Donations to Canadian Journalism
By Theresa L.M. Man and Ryan M. Prendergast, The Lawyer’s Daily, April 15, 2019
Practice Management Tools
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Anti-Terrorism/Money Laundering Update
Mar 2019 Charity & NFP Law Update
Changes to Canada’s AML/ATF Regime in Budget 2019
Tabled on March 19, 2019, Budget 2019 proposes changes to strengthen Canada’s AML/ATF regime, including changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Criminal Code. For additional information on Budget 2019 with regard to these changes, see Charity & NFP Law Bulletin No. 443.
Charity Alleged to have Links to Terrorist Group
On February 23, 2019, the revocation of charitable registration of the Anatolia Cultural Foundation was published in the Canada Gazette. The summary of reasons for revocation available on the website of the CRA Charities Directorate states that the charity failed to meet a number of compliance requirements, such as failure to demonstrate direction and control with regard to gifts to a non-qualified donee and failure to file a Charity Information Return (T3010). The charity was also found to have been involved through its various funding and gifting arrangements, either knowingly or unknowingly, with extending the benefits of its status as a registered charity to fund the activities of various organizations, including militia groups and political groups, linked to or openly supporting the Kurdistan Workers Party (PKK), an organization listed as a terrorist entity in Canada since December 10, 2002.
Charities involved in activities outside Canada should have adequate due diligence procedures in place to reduce the risk of unknowingly providing any kind of support to any of the entities listed by Public Safety Canada as a suspected terrorist group.
Public Safety Canada Updates List of Suspected Terrorist Groups
On February 11, 2019, the list of entities believed to be involved in or associated with terrorism, a list maintained by the Governor in Council on the recommendation of the Minister of Public Safety and Emergency Preparedness pursuant to section 83.05 of the Criminal Code, was updated to include Harakat Sawa’d Misr (also known as Hasam), a nationalist movement attempting to overthrow the government of Egypt.
Update to US National Terrorist Financing Risk Assessment
On December 20, 2018, the United States Department of Treasury published its 2018 National Terrorist Financing Risk Assessment (the “Report”). The Report provides an overview of the risks of terrorist financing in the United States and recognizes that the charitable sector as a whole does not present a uniform or unacceptably high risk of exploitation for money laundering and terrorist financing. The Report acknowledges that the existing regime of enforcement, oversight, outreach and self-regulation initiatives has been largely effective at reducing the exploitation of charitable organizations for terrorist financing.
However, the Report states that, while charitable organizations operating solely inside the US face a low risk of abuse, the risk is higher for charitable organizations with operations outside the US, where terrorist groups, such as the Islamic State of Iraq and Syria (ISIS) are more active, including Afghanistan, Pakistan, Somalia, Syria, and Yemen. In this regard, the Report explains that terrorist supporters abuse charitable organizations operating outside the US as a front or cover to raise and move funds, personnel, military supplies, and other resources, as well as to deliver humanitarian assistance with the purpose of radicalizing vulnerable communities.