Three hundred UK charities hit by global crackdown on illegal funds

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Updated 27 July 2017
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Three hundred UK charities hit by global crackdown on illegal funds

LONDON: More than 300 UK-based charities have had their bank accounts closed in the last two years after being caught up in a global crackdown on illegal money flows, forcing the government to explore how to allow them easier access to the financial system.
Thousands more charities have had operations disrupted by delayed payments causing financial losses and risks to employees, Britain’s Charity Finance Group, that helps to organize charity financing, told Reuters. Major charities Oxfam and Save the Children say they were among those hit.
The government is setting up a panel of charity executives, bankers and officials to meet in the coming months to “drive new policy thinking” to allow legitimate charities to operate unhindered, an official told Reuters.
The decision to assemble the working group comes ahead of a review by the inter-governmental Financial Action Task Force (FATF) next March of Britain’s efforts to tackle money-laundering and financing of militant groups.
At the FATF meeting, Britain could face criticism of its failure to tackle the problem of charities losing access to the banking system, charity sector analysts said.
The FATF has recorded over 100 cases worldwide of alleged abuse of charities for terrorist finance. In one example in the city of Birmingham in 2011, three people were convicted of impersonating Muslim Aid charity workers to fund a bomb attack.
But legitimate charities say they have been cut off from the financial system because banks have been alarmed by billion-dollar fines meted out for breaching sanctions, anti-terror financing and anti-money laundering rules.
Charity officials say the clamp-down on charities by banks is causing government-backed aid efforts to fail, humanitarian workers to be put at risk and potential recipients to suffer.
“Save the Children believes a more aligned approach between governments, regulators, and NGOs will help to reduce financial crime, whilst ensuring critical and life-saving humanitarian work continues,” the group said in a statement for this article.
HSBC and Co-Operative Bank closed the most charity bank accounts in the last two years, according to a Reuters survey of more than 30 case studies. Both banks, along with other big institutions, said they were taking action to better understand the needs and internal governance of charity clients.

HSBC SETS UP TEAM
In the last two years, HSBC hired some 35 staff to work in a team dedicated to the charity sector, according to a source familiar with the hirings. The specialists aim to ensure charities comply with global financial rules.
A problem that hit mainly smaller Muslim-related charities after September 11, 2001 attacks in America accelerated in the last few years to involve thousands of charities.
“Delayed and declined payments have become a regular recurrence in the sector with charities experiencing disruption to their objectives on a daily or weekly basis,” a director at UK-based umbrella group Muslim Charities Forum, Monowara Gani, told Reuters.
Many British charities affected were reluctant to speak on the record about their experiences because they were worried that other banks might cut them off, or that donations could dry up if their banking problems were publicized.
One small human rights charity funded by Britain’s Foreign Office, which did not want to be identified, closed down this year after being unable to open a bank account, two sources familiar with the situation said.
This illustrated the problem posed to British international aid policy by the banks’ fear of being punished for breaching regulations, said the sources who declined to be named.
Around 20 percent or nearly $1 billion a year of the government’s bilateral assistance funds distributed by the Department for International Development are channelled through charities, according to government data.
“We continue to engage with humanitarian organizations to understand and discuss what impact the wider security context may be having on their operations overseas in conflict-affected states,” said the government official, who confirmed a panel had been set up to engage with the issue.
RISK RULES
“The humanitarian sector is struggling with a policy vacuum, leaving commercial organizations such as banks to set the risk rules for delivery of publicly-funded aid,” said Mike Parkinson, policy adviser for Oxfam UK, which has encountered delays in opening bank accounts overseas.
Some banks are responding to the problem, but others are reluctant to serve a sector deemed to have a “medium-high” risk of terrorist financing in a 2015 British government report.
“We feel like banks used to be competing for charity business, but now they are pushing us away,” said Tim Boyes-Watson, executive director of British-based Mango which specializes in helping charities manage their finances.
Boyes-Watson said Mango is working on creating a certification system that would aim to make approved charities easier for banks to work with, but that implementing and regulating such a scheme could prove costly.
In addition to hiring a team dedicated to the charity sector, HSBC in April sent a guide called “Keeping your Charity Safe” to 11,000 charity and non-profit customers.
“We will continue to work with the UK government and industry bodies to support the not-for-profit sector,” a spokeswoman for the bank said in an e-mail.
Co-Operative Bank has closed accounts for dozens of organizations in the last few years including branches of the Cuba Solidarity Campaign and the Nicaragua Solidarity Campaign.
Amnesty International UK in December 2016 published a report criticizing the bank’s handling of those closures, which were often abruptly communicated to the charities. The bank said it was unethical not to comply with legal and regulatory rules.
A spokesman for the bank said it has introduced a new “exit forum” to manage closures of charities’ accounts better and will soon publish a summary of its account closure data.

UNDERSTANDING CHARITY CLIENTS
Barclays has sent a mandatory questionnaire to all of its charity clients in recent months asking them how they deal with financial crime and sanctions-related issues.
“The idea is that if we understand charity clients better and get confident in their internal governance, we should be better placed to make payments for them,” said David McHattie, head of the charities team at Barclays.
McHattie said no customers have lost their accounts as a result of unsatisfactory answers to the questionnaire, but that the bank has asked some clients to improve their processes.
While Britain’s government, banks, and charity officials take steps to tackle the problem, aid workers say the consequences of losing access to banking are getting worse.
“I’ve been talking to banks for over a year and still don’t have an account, so I’m having to send money for life-saving care through Western Union which is expensive and time-consuming,” said the head of one medical aid organization operating in Syria who did not wish to be named.
Other aid organizations without bank accounts are resorting to more primitive, risky methods.
“A number of organizations I know are back to throwing bags of cash over the border into Syria,” said Lisa Reilly, executive coordinator at the European Interagency Security Forum which works to improve the safety of aid workers.


Australia approves extradition of former US Marine over alleged training of Chinese military pilots

Updated 57 min 37 sec ago
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Australia approves extradition of former US Marine over alleged training of Chinese military pilots

  • Australia’s Attorney General Mark Dreyfus approved the extradition on Monday
  • Daniel Duggan has been in a maximum-security prison since he was arrested in 2022

NEWCASTLE, Australia: Former US Marine Corps pilot Daniel Duggan will be extradited from Australia to the United States over allegations that he illegally trained Chinese aviators.
Australia’s Attorney General Mark Dreyfus approved the extradition on Monday, ending the Boston-born 55-year-old’s nearly two-year attempt to avoid being returned to the US
Duggan, who served in the Marines for 12 years before immigrating to Australia and giving up his US citizenship, has been in a maximum-security prison since he was arrested in 2022 at his family home in the state of New South Wales. He is the father of six children.
Dreyfus confirmed in a statement on Monday he had approved the extradition but did not say when Duggan would be transferred to the US
“Duggan was given the opportunity to provide representations as to why he should not be surrendered to the United States. In arriving at my decision, I took into consideration all material in front of me,” Dreyfus said in the statement.
In May, a Sydney judge ruled Duggan could be extradited to the US, leaving an appeal to the attorney general as Duggan’s last hope of remaining in Australia.
In a 2016 indictment from the US District Court in Washington, D.C., unsealed in late 2022, prosecutors said Duggan conspired with others to provide training to Chinese military pilots in 2010 and 2012, and possibly at other times, without applying for an appropriate license.
Prosecutors say he received payments totaling around 88,000 Australian dollars ($61,000) and international travel from another conspirator for what was sometimes described as “personal development training.”
If convicted, Duggan faces up to 60 years in prison. He denies the allegations.
“We feel abandoned by the Australian government and deeply disappointed that they have completely failed in their duty to protect an Australian family,” his wife, Saffrine Duggan, said in a statement on Monday. “We are now considering our options.”


South Korean opposition threatens to impeach Han over martial law counsel

Updated 23 December 2024
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South Korean opposition threatens to impeach Han over martial law counsel

  • Prime Minister Han Duck-soo took over from the suspended Yoon Suk Yeol, who was impeached on Dec. 14
  • Yoon accused of hampering the Constitutional Court trial by repeatedly refusing to accept court documents

SEOUL: South Korea’s main opposition party threatened on Monday to impeach acting president Han Duck-soo if he failed to proclaim a law to launch a special counsel investigation into President Yoon Suk Yeol’s failed bid to impose martial law.
Prime Minister Han has taken over from the suspended Yoon, who was impeached on Dec. 14 and faces a Constitutional Court review on whether to oust him.
With a majority in parliament, the opposition Democratic Party passed a bill this month to appoint a special counsel to pursue charges of insurrection, among others, against the conservative Yoon and to investigate his wife over a luxury bag scandal and other allegations.
The party, which has accused Han of aiding Yoon’s martial law attempt and reported him to police, said it would “immediately initiate impeachment proceedings” against the acting president if the legislation was not promulgated by Tuesday.
“The delays show that the prime minister has no intention of complying with the constitution, and it is tantamount to admitting that he is acting as a proxy for the insurgent,” Democratic Party floor leader Park Chan-dae told a party meeting, referring to Yoon.
Han is a technocrat who has held leadership roles in South Korean politics for 30 years under conservative and liberal presidents. Yoon appointed him prime minister in 2022.
Han’s office could not immediately be reached for comment. He has previously said he had tried to block Yoon’s martial law declaration, but apologized for failing to do so.
Park also accused Yoon of hampering the Constitutional Court trial by repeatedly refusing to accept court documents.
“Any delay in the investigation and impeachment trials is an extension of the insurrection and an act of plotting a second one,” Park said.
A joint investigative team including police and the Corruption Investigation Office for High-ranking Officials has made a second attempt to call Yoon in for questioning on Dec. 25, though it was unclear whether he would appear.
Woo Jong-soo, investigation chief of the national police agency, told parliament on Monday that police had tried to raid Yoon’s office twice but the presidential security service denied them entry. Woo said his team sent a request to preserve evidence, including a secure phone server.


India, Kuwait upgrade ties to strategic partnership on Modi visit

Updated 23 December 2024
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India, Kuwait upgrade ties to strategic partnership on Modi visit

  • Modi awarded Order of Mubarak Al-Kabeer for strengthening Kuwait-India relations
  • India, Kuwait leaders discussed cooperation in pharmaceuticals, IT, security

NEW DELHI: India and Kuwait upgraded bilateral ties to a strategic partnership on Sunday as their leaders eye stronger cooperation in “key sectors” ranging from pharmaceuticals to security.

Indian Prime Minister Narendra Modi signed a strategic partnership agreement with Emir of Kuwait Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah during his trip to the Gulf state, the first visit by an Indian leader in 43 years.

“We have elevated our partnership to a strategic one and I am optimistic that our friendship will flourish even more in the times to come,” Modi said in a statement.

“We discussed cooperation in key sectors like pharmaceuticals, IT, fintech, infrastructure and security.”

During the trip, the Kuwaiti emir presented Modi with the Order of Mubarak Al-Kabeer for his efforts in strengthening Kuwait-India relations.

The order is the highest civilian honor in Kuwait and is bestowed upon leaders and heads of state.

The emir said India was a “valued partner” in the country and the Gulf region and that he “looked forward” to India playing a greater role in the realization of Kuwait Vision 2035, according to a statement issued by the Indian Ministry of External Affairs.

The newly upgraded ties will open up “further cooperation in sectors such as defense … with the Kuwaiti armed forces,” especially the navy, said Kabir Taneja, a deputy director and fellow with the strategic studies program at the Observer Research Foundation in New Delhi.

Their closer cooperation in major sectors will also “further India’s economy-first agenda,” he added.  

“Pharmaceuticals, for example, is a point of strength of Indian manufacturing and can contribute to further building the sector in states such as Kuwait,” Taneja told Arab News.

India’s pharmaceutical exports have been growing in recent years, and the country was the third-largest drugmaker by volume in 2023.

Delhi is also among Kuwait’s top trade partners, with bilateral trade valued at around $10.4 billion in 2023-24.

Taneja said India-Kuwait ties are also likely to strengthen through the Indian diaspora, the largest expatriate community in the Gulf state.

Over 1 million Indian nationals live and work in Kuwait, making up about 21 percent of its 4.3 million population and 30 percent of its workforce.

“(The) Indian diaspora has been part of the Kuwaiti story for a long time,” Taneja said, adding that strengthening ties between the two countries will allow India, through its diaspora, to unlock “deeper economic cooperation potential.”


Philippine military says will acquire US Typhon missile system

Updated 23 December 2024
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Philippine military says will acquire US Typhon missile system

  • The US Army deployed the mid-range missile system in the northern Philippines earlier this year
  • It decided to leave it there despite criticism by Beijing that it was destabilizing to Asia

MANILA: The Philippine military said Monday it plans to acquire the US Typhon missile system to protect its maritime interests, some of which overlap with regional power China.
The US Army deployed the mid-range missile system in the northern Philippines earlier this year for annual joint military exercises with its longtime ally, but decided to leave it there despite criticism by Beijing that it was destabilizing to Asia.
Since then, it has been used by Philippine forces to train for its operation.
“It is planned to be acquired because we see its feasibility and its functionality in our concept of archipelagic defense implementation,” Philippine Army chief Lt. General Roy Galido told a news conference.
“I’m happy to report to our fellow countrymen that your army is developing this capability for the interest of protecting our sovereignty,” he said, adding the total number to be acquired would depend on “economics.”
As a rule, it takes at least two or more years for the Philippine military to acquire a new weapons system from the planning stage, Galido said, adding it was not yet budgeted for 2025.
The land-based “mid-range capability” missile launcher, developed by US firm Lockheed Martin for the US Army, has a range of 480 kilometers, though a longer-range version is in development.
The presence of the US missile system on Philippine soil had angered Beijing, whose forces have engaged in escalating confrontations in recent months with the Philippines over disputed reefs and waters in the South China Sea.
Chinese Defense Minister Dong Jun warned in June that the Typhon deployment was “severely damaging regional security and stability.”


Seven dead in small plane crash in western Mexico

Updated 23 December 2024
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Seven dead in small plane crash in western Mexico

  • The aircraft, a Cessna 207, was flying from La Parota in the neighboring state of Michoacan

MEXICO CITY: At least seven people died when a light aircraft crashed Sunday in a heavily forested area of Jalisco in western Mexico, local authorities reported.
The aircraft, a Cessna 207, was flying from La Parota in the neighboring state of Michoacan.
Jalisco Civil Protection said via its social media that the crash site was in an area that was difficult to access.
Initial authorities on the scene “reported a preliminary count of seven people dead,” who haven’t been identified yet, according to the agency.
“A fire was extinguished and risk mitigation was carried out to prevent possible additional damage,” it added.
Authorities said they were awaiting the arrival of forensic investigators to remove the bodies and rule out the presence of additional victims.