Anti Money Laundering Policy

Policy Declaration

Children Do Matter is responsible for maintaining internal systems to prevent fraud and corruption. We will not tolerate fraud, corruption or abuse of position for personal or institutional gain. It is therefore our responsibility and policy to comply fully with applicable provisions of the Proceeds of Crime Act 2002, Terrorism Act 2000, Bribery Act 2010 and Money Laundering Regulations 2007 and all amending legislation.

Purpose

The purpose of this policy is to ensure our charity’s compliance with anti-money laundering, bribery, corruption laws and regulations. We would assist law enforcement in combating illegal money laundering, and to minimise the risk of charity resources being used for improper purposes.

Scope of the Policy

This policy aims to maintain the high standards of conduct which our charity currently enjoys. This will be achieved by ensuring that Children Do Matter:

1. does not get used by third parties for the purpose of money laundering
2. does not receive bribes that are intended to influence our decision making
3. is not subjected to corrupt, dishonest and or illegal behaviour

This policy is applicable to everyone involved in the charity. i.e., the board of trustees and volunteers.

This policy is available internally throughout the charity and we ensure everyone is aware of it.

Money Laundering

By definition, money laundering is the practice of cleaning up money that has, for some reason, been obtained illegally. Often there is a complex trail involved so that the practice cannot be easily identified or traced.

Money laundering can occur in many ways. It may happen by dispersing money through many different bank accounts (to hide its origins) but can occur when the charity is used unwittingly as a “trading partner”. This could be directed at the charity or through an organisation where we have a close relationship, such as a funder.

Procedures

1. The Treasurer acts as the money laundering reporting officer and is responsible for carrying out the charity’s anti-money laundering procedures
2. The Treasurer will ensure that proper records are maintained on all the relevant activities and steps taken to deal with them

Due diligence

The charity should carry out procedures that help to identify donors or other providers of income before entering into a relationship with them.

The charity should, where applicable:

1. Identify the donor and verify their identity
2. Take adequate measures where some donors need or want their privacy
3. Accept that in some cases, the identity of the donor may not be easy to verify, in which case other measures need to be developed
4. Continuously monitor the situation
5. Maintain proper records of all checks made

Policy on Disclosure

If anyone knows, suspects or has reasonable grounds for thinking or suspecting that a person is engaged in money laundering or terrorist financing, they must report such matters to the Treasurer immediately. Facts must include:

1. Details of the people involved
2. Type of transaction
3. The relevant dates
4. Why there is a suspicion
5. When and how activity is undertaken
6. Likely amounts

The Treasurer will acknowledge receipt of the disclosure within an agreed response period. They will consider the report and any other information available. Once the Treasurer has evaluated the disclosure or other information, they will determine if:

1. There are reasonable grounds for suspecting money laundering and the steps to be taken
2. There is actual money laundering or terrorist financing
3. Whether they need to report the matter to the National Crime Agency (NCA)

All disclosure reports referred to by the Treasurer and reports made by them to the NCA will be retained for a minimum of 5 years.

Bribery and Corruption

The Bribery Act 2010 applies to individuals and commercial organisations, including charitable companies.

It sets out 4 criminal offences:

1. Bribing an individual or company
2. Being bribed by an individual or company
3. Bribing a foreign public official
4. Corporate failure to prevent bribery

Examples of Bribery and Corruption

1. Bribery can arise in day-to-day situations such as; tendering, appointing preferred suppliers, contractors and agents, awarding licences or offering jobs
2. Use of Children Do Matter funds, in the form of payments or gifts and hospitality for any unlawful, unethical or improper purpose
3. Authorisation of, making, tolerating or encouraging, or inviting or accepting, any improper payments in order to obtain retain or improve business

This list is not exhaustive.

The penalties for conviction under the Act are:

1. Individuals – unlimited fine to imprisonment for 10 years
2. Directors / Trustees – could find themselves disqualified from acting as company directors
3. Commercial Organisations – unlimited fines and exclusion from tendering for public contracts

Tainted Donations

Parallel legislation is now in force in respect of what are called tainted donations. This is a replacement for the substantial donor provisions and is legislation largely driven by corporation tax requirements. In simple terms, a tainted donation is not necessarily a criminal offence, but it will be construed as not for charitable purposes and thus liable to tax as trading income. It follows also that any gift aid claim would be disallowed.

The legislation is intended to catch donations which are given “with strings attached”. In short, the donor expects a measurable benefit in return. (The small benefit rules which apply to gift aid donations are not affected by the changes.)

Trustees should ensure that they have policies in place to identify the source of donations and to identify any conditions in writing or merely implied which could cause a problem. Obviously, this is not to prevent genuine restricted donations which are given for a particular purpose within the general charitable activities. As with bribery policies, donation policies should be communicated to all trustees, staff etc., so that nobody can unwittingly commit the charity to accepting a commitment which they should not be accepting.

The Charity Commission has issued Compliance Toolkit – Protecting Charities from Harm which is available on their website, and adds a section on bribery to the extensive guidance on fraud and financial crime. The Charity Commission does expect any serious criminal activity, known or suspected, to be reported to it and the Annual Return requires a declaration to this effect to be made by the trustees.