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Charities and Terrorism: The Charity Commission Response
By Debra Morris

It is difficult to imagine an issue that could undermine public faith in charity more than the
suspicion of terrorist links. Any kind of terrorist connection is obviously completely
unacceptable.
[1] Following September 11, the media spot light has increasingly concentrated on
the regulatory aspect of the Charity Commission’s work with these fears in mind. [2] The Charity
Commission has responded promptly and appropriately. In December 2001, Charity Commission
Director of Operations , Simon Gillespie said:
[3] ‘Following September’s tragic events in America there has been much speculation as to how
terrorist groups raise funds. There have been very few allegations made against charities in
England and Wales. Where such allegations have been made the Commission has taken
immediate action to investigate concerns, freezing assets where necessary.’

Charity Commission Policy
On 13 March 2002, the Charity Commission published it’s policy on charities and their alleged
links to terrorism. [4] It was announced that on September 11 2002, the Charity Commission
already had inquiries open into the activities of fi ve charities and their potential links to terrorism,
and were evaluating concerns into two others. Since then, it has evaluated concerns about a
further ten charities, and opened formal inquiries into five of them. Two of those charities have
been closed down and another one has had its assets frozen.

It was noted that, despite speculation in the media that charities in England and Wales have links
to terror groups, ongoing work at the Charity Commission suggests that these connections are
extremely rare. The Commission noted that at the heart of this debate are three basic
assumptions, which have important implications for the way that it deals with charities where
suspicions of links to terrorism arise. They are:

1. The Charity Commission would not register an organisation that had support of terrorism – explicitly or implicitly – as an object;

2. Use of an existing charity’s assets for suppo rt of terrorist activity is not a proper use of those
assets; and,

3. Links – or alleged links – between a charity and terrorism corrode public confidence in the integrity of charity.

The Commission has always worked to these principles and before 11 September it did not seem
necessary to articulate them. Since then, of course , the world has changed, and it was felt that it
was time to re-state the key principles when lookin g at charities with potential links to terrorism.
These were stated as follows:

· ‘Any links between charities and terroris t activity are totally unacceptable. “Links” in this
case might include fundraising or provision of facilities, but also include formal or informal
connections to organisations “proscribed” under the Terrorism Act 2000, and any subsequent
secondary legislation;

· The Charity Commission will deal with any allegation of links between a charity and terrorist activity as an immediate priority;

· Where allegations are made we will liaise closely with intelligence, security and law enforcement agencies to facilitate a thorough investigation;

· Active collaboration between charities and terrorist organisations is a police matter that may
lead to serious criminal charges. Where allegations are made to the Commission or
suspicions arise as a result of the Commission’s work (e.g. monitoring or casework), the
Commission will inform the relevant law enfo rcement agencies immediately and co-operate
fully with the criminal investigation;

· Where a charity’s acti vities may give, or appear to give , support or succour to terrorist
activity, the Commission expects the charity’s trustees to take immediate steps to
disassociate the charity from the activity;

· We expect trustees to be vigilant to en sure that a charity’s premises, assets, volunteers or
other goods cannot be used for activities that may, or appear to, support or condone terrorist
activities. Examples include the use of a c harity’s premises for fundraising or meetings;

· Charities should take all necessar y steps to ensure their activities could not be
misinterpreted. The Commission expects trustees or charities to ensure their activities are
open and transparent. We hold trustees accountable for ensuring that procedures are put in
place to ensure that terrorist organisations cannot take advantage of a charity’s status,
reputation, facilities or assets; and,

· We expect any person connected with a charity to bring evidence of a charity’s possible
links with terrorism to our attention immediately.’

The Policy in Action
On 10 December 2001, the Charity Commission comp leted its formal inquiry into the International
Islamic Relief Organisation, formally a registered charity. [5] The inquiry, [6] which was opened in
September 2001, followed media reports that th e charity may be linked to terrorist groups.
Following an urgent evaluation of the issues involved, an inquiry was opened to look into these
allegations. A full inquiry was conducted and the Commission made use of its investigatory
powers to obtain copies of all fi nancial records and documentation.
[7] The Commission staff
established that:

· The charity appeared to have links with a larger organisation of the same name based in
Saudi Arabia in that one of the trustees appears to be the Director General of that organisation;

· The charity had no income or expenditure other than accountant’s fees since 1997, and
had not carried out any activity since this time. Pr ior to that date, its activities appeared to have
been minimal;

· The charity had no assets or funds in the UK;
· The charity had no UK offices; and,
· The trustees were all resident outside of the UK.

Upon closing the inquiry, the Charity Commission was satisfied that the charity was not
operating. It has therefore been removed from the central register of charities. [8] On 9 January 2002, the US Treasury placed The Revival of Islamic Heritage Society (RIHS) on a
list of designated terrorist organisations. [9] As a temporary and protective measure, the Charity
Commission froze the assets of a registered charit y of a similar name whilst an investigation was
carried out to determine what links, if any, it has with this named organisation.
[10] The charity,
established in 1992, st ates on its website [11] that it exists ‘to improv e the condition of the Muslim
community and develop an awareness and unders tanding of Islam amongst the non-Muslim
communities, by concentrating on youth and education’. Charity Commission Director of
Operations, Simon Gillespie, said:
[12] ‘It is not clear whether the charity registered in England has any connection to the organisation
listed by the US Treasury. But it is normal practi ce to freeze a charity’s assets as a precautionary
measure. We have no evidence that Islamic ch arities are especially vulnerable to abuse in
regards to terrorism or any other wrongdoing and we fully support the work of all bona fide
religious charities. We expe ct all charities to properly account for their activities.’

The good news is that, in both absolute and rela tive terms, the numbers of charities potentially
involved with terrorist activity are small. Neither the Charity Commission, nor other regulatory
and enforcement organisations have evidence to su ggest that the 185,000 registered charities in
England and Wales are widely subject to terrorist infiltration. The Charity Commission will
obviously continue to be vigilant against risks of this kind whether registering, monitoring or
investigating charities.
[13] Unfortunately, Commission efforts are hampered by the fact that the vast majority of so-called ‘aid
organisations’ that do provide a front for Islamic terrorists, and who have latched on to the
conflicts in Bosnia, Kosovo and Chechnya as fronts for their charitable appeals, were never
registered with the Charity Commission. The publ ic seldom ask for proof that charities are
registered before they put their m oney in collecting tins. In this area, as in so many others, the
vigilance of members of the public, the media and charity staff and volunteers ought to be an
important safeguard against abuse.

April 10, 2002

Debra Morris
Charity Law Unit
University of Liverpool, UK
Currently Visiting Lecturer, Cayman Islands Law School
debra.morris@gov.ky
This article first appeared in “The Exempt Organization Tax Review.”