Treasury Guidelines to Prevent Diversion of Charitable Funds to Terrorists

 

1. delineate the charity's basic goal(s) and purpose(s);

2. define the structure of the charity, including the composition of the board, how the board is selected and replaced, and the authority and responsibilities of the board;

3. set forth requirements concerning financial reporting, accountability, and practices for solicitation and distribution of funds; and

4. state that the charity shall comply with all applicable federal and state laws.

 

1. The board should be an active governing body, meeting at least three times annually with the majority of members attending in person.

2. The board should be an independent governing body, exercising effective and independent oversight of the charity's operations.

 

3. The board should maintain records of all decisions made. These records should be available for public inspection.

 

1. The foreign recipient organization's name in English, in the language of origin, and any acronym or other names used to identify the foreign recipient organization.

2. The jurisdictions in which the foreign recipient organization maintains a physical presence.

3. The jurisdiction in which the foreign recipient organization is incorporated or formed.

4. The address and phone number of any place of business of the foreign recipient organization.

5. The principal purpose of the foreign recipient organization, including a detailed report of the recipient's projects and goals.

6. The names and addresses of organizations to which the foreign recipient organization currently provides or proposes to provide funding, services, or material support, to the extent known, as applicable.

7. The names and addresses of any subcontracting organizations utilized by the foreign recipient organization.

8. Copies of any public filings or releases made by the foreign recipient organization, including most recent official registry documents, annual reports, and annual filing with the pertinent government, as applicable.

9. The foreign recipient organization's existing sources of income, such as official grants, private endowments, and commercial activities.

 

1. The charity should be able to demonstrate that it conducted a reasonable search of public information, including information available via the internet, to determine whether the foreign recipient organization is or has been implicated in any questionable activity.

2. The charity should be able to demonstrate that it verified that the foreign recipient organization does not appear on any list of the U.S. Government, the United Nations, or the European Union identifying it as having links to terrorism or money laundering. The charity should consult the Department of the Treasury's Office of Foreign Assets Control Specially Designated Nationals List, which will identify entities designated by the U.S. Government as Foreign Terrorist Organizations or as supporters of terrorism. The charity also should consult the U.S. Government's Terrorist Exclusion List maintained by the Department of Justice, the list promulgated by the United Nations pursuant to U.N. Security Council Resolutions 1267 and 1390, the list promulgated by the European Union pursuant to EU Regulation 2580, and any other official list available to the charity.

3. The charity should obtain the full name in English, in the language of origin, and any acronym or other names used, as well as nationality, citizenship, current country of residence, place and date of birth for key staff at the foreign recipient organization's principal place of business, such as board members, etc., and for senior employees at the recipient's other locations. The charity should run the names through public databases and compare them to the lists noted above.

4. The charity should require foreign recipient organizations to certify that they do not employ or deal with any entities or individuals on the lists referenced above, or with any entities or individuals known to the foreign recipient organization to support terrorism.

 

1. The charity should determine the identity of the financial institutions with which the foreign recipient organization maintains accounts. The charity should seek bank references and determine whether the financial institution is: (i) a shell bank; (ii) operating under an offshore license; (iii) licensed in a jurisdiction that has been determined to be non-cooperative in the international fight against money laundering; (iv) licensed in a jurisdiction that has been designated by the Secretary of the Treasury to be a primary money laundering concern; and (v) licensed in a jurisdiction that lacks adequate anti- money laundering controls and regulatory oversight.

2. The charity should require periodic reports from the foreign recipient organization on its operational activities and use of the disbursed funds.

3. The charity should require the foreign recipient organization to undertake reasonable steps to ensure that funds provided by the charity are not ultimately distributed to terrorist organizations. Periodically, the foreign recipient organization should apprise the charity of the steps it has taken to meet this goal.

4. The charity should perform routine, on-sight audits of foreign recipient organizations whenever possible, consistent with the size of the disbursement and the cost of the audit.