Terrorism legislation stifling Muslim charities

30th Jan 2015

Hamed Chapman

International aid agencies, particularly Muslim charities, are being stifled in securing and transferring funds to frontline services because of the draconian effects of the Government’s counter terrorism strategy.

New regulations could be “costing charities millions” in aid funding due to additional compliance costs and money being tied up in domestic accounts because of blocked transfers, according to cross-party think tank Demos.

In the past decade global policy-makers have increasingly identified charities as organisations vulnerable to abuse by terrorists. For more than a decade, Israel has targeted several international aid agencies as a device to prevent the Palestinians from receiving humanitarian support.

In a new report to coincide with the current review of the Protection of Charities Bill, Demos cited figures showing the UK has over 160,000 registered charities, with total reported turnover in excess of £63 billion per annum.

Author Tom Keatinge, who spent three years researching, expressed fears that the impact of creeping counter-terrorism on the banking sector meant that delivering the benefit of charity generosity was “becoming increasingly challenging, and costing charities millions in lost donations and due diligence expense.”

The stark reality, he warned, is that “in the name of security we are creating greater insecurity.”

The problem has been particularly acute amongst Muslim charities, who have more frequently reported having bank accounts closed or donations blocked.

The Government’s terrorism legislation reviewer, David Anderson QC, who is due to publish his latest review of the operation of the Government’s terrorist asset-freezing legislation, welcomed the findings that sought to address the concerns.

“There are acute concerns within the charitable sector regarding banks withdrawing or curtailing services to NGOs,” Anderson said.

Shadow Civil Society Minister, Lisa Nandy, said Demos provided “worrying evidence that fear about terrorism is stopping legitimate charities from doing lifesaving work.”

“The Government has taken an inconsistent approach when it comes to charity regulation, it asks the charity commission to come down hard on organisations it suspects of having ties to extremists, but seems more relaxed about other charitable abuse like tax avoidance. This sets the wrong tone for the banks who lend to charities and for the public who donate to them.”

The report, entitled Uncharitable Behaviour, called on banks, charities, and Government bodies to improve dialogue on resulting financial restrictions and impact on charitable activity.

Last November, a think tank set up to “foster social cohesion in relation to Muslims in Britain” accused the Charity Commission of being biased against Muslim charities despite having no evidence that they are inhabited by extremists.

Claystone singled out the Commission’s Chairman, William Shawcross, for particular criticism and said he ought to explain comments he made about Islam before his appointment to the chairmanship.

Soon after his appointment, the regulator created a new issue code called ‘extremism and radicalisation’, and has labelled 55 charities with this code without their knowledge.

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