When the ACNC was introduced, the legislation provided for the introduction of External Conduct Standards applicable to charities with overseas interests. Now, nearly six years on, Treasury has released the detail on these standards. The standards are intended to provide a minimum level of assurance that registered charities meet appropriate standards of governance and behaviour when operating or funding activities outside Australia, including when acting through third parties.
The standards address:
• Maintaining internal controls on overseas activities and resources provided to fund them.
• Ensuring that overseas operations are compliant with certain Australian laws (such as laws addressing slavery, taxation, and money laundering)
• Keeping appropriate records to be able to report annually on a country by country basis
• Minimising the risk of fraud and corruption
• Protecting vulnerable individuals
Like the existing Governance standards, the standards are based around ‘reasonable’ steps and procedures, so what is ‘reasonable’ will vary according to an organisation’s size, scale of activities and the nature of operations.
As drafted, they apply to all registered charities (including Basic Religious Charities) except when activities outside Australia are “merely incidental” to the operation and pursuit of the entity’s purposes in Australia.
The consultation period is open until 21 September 2018. More details are available by following this link. The final legislation is expected to apply from 1 July 2019.