Proceedings of the Standing Senate Committee on
National Security and Defence
Issue No. 8 - Evidence - Meeting of October 17, 2016
OTTAWA, Monday, October 17, 2016
The Standing Senate Committee on National Security and Defence met this day in public at 1 p.m. to study security threats facing Canada, including but not limited to (a) cyber espionage; (b) threats to critical infrastructure; (c) terrorist recruitment and financing; (d) terrorist operations and prosecutions; and in camera, to study issues related to the Defence Policy Review presently being undertaken by the government.
Senator Daniel Lang (Chair) in the chair.
[English]
The Chair: Colleagues, welcome to the Standing Senate Committee on National Security and Defence for Monday, October 17, 2016. Before we begin, I would like to introduce the people around the table.
My name is Dan Lang, senator for Yukon. On my immediate left is the clerk of the committee, Adam Thompson.
I would like to invite the senators to introduce themselves and state the region they represent, starting with the senator on my right.
Senator Kenny: Colin Kenny, Ontario.
Senator Dagenais: Jean-Guy Dagenais, Quebec.
Senator Meredith: Don Meredith, Ontario.
The Chair: Thank you, colleagues. Today we'll be meeting for three hours. In our first panel, we will hear from representatives from the United Kingdom's Charity Commission. We were also intending to hear from the Metropolitan Police in the U.K., but unfortunately they are not going to be here today.
In the second panel, we will meet in camera to discuss committee business.
To recap for those watching at home and for our guests, on February 2, 2016, the Senate authorized our committee to continue its study on security threats facing Canada, including, but not limited to cyber-espionage, threats to critical infrastructure, terrorist recruitment and finance, and terrorist operations and prosecutions. As part our study, the committee has tabled an interim report on threats to the security of Canada and has made a number of recommendations.
In the area of charities, the committee learned that eight charities had their status revoked by Canada Revenue Agency for links to terrorism, yet no charges have been laid. One charity, the International Relief Fund for the Afflicted and Needy, IRFAN, was designated a terrorist entity in 2014, 20 years after concerning information had come to light about the work of the charity. But, again, no charges have been laid.
Additionally, the committee expressed concerns about the lack of terrorism financing prosecution, in spite of the fact that FINTRAC, the agency responsible for monitoring terrorism financing, identified 683 cases between 2009 and 2014.
When it comes to terrorism financing, we have only one conviction, and that was on a guilty plea. Terrorism is a global problem that Canada and its allies are working to address. It is important to learn from our allies about what is working in their countries and what is not. Joining us today from the Charity Commission for England and Wales are Ms. Michelle Russell, Director, Investigations, Monitoring and Enforcement, and Mr. Tim Hopkins, Investigations, Monitoring and Enforcement Directorate.
For the public watching, the Charity Commission in Britain is the registrar and regulator of charities in England and Wales. It is an independent, arm's-length government department accountable to Parliament. It is also accountable for the exercise of their quasi-judicial powers to the first-tier tribunal charity and the high court. The Charity Commission is responsible for deciding whether organizations are charitable and should be added to or, in some cases, removed from the register of charities and for maintaining that register.
It operates within a clear legal framework and follows published policies and procedures to ensure that it is proportionate in its approach. In March 2016, the British Parliament adopted the Charities (Protection and Social Investment) Act 2016. The act extended types of convictions that led to automatic disqualification from trusteeship to include convictions for terrorism and money laundering. It also introduced a new power allowing the commission to issue a statutory warning to a charity trustee who it considers has committed a breach of trust or duty, or other misconduct or mismanagement. This power falls in between issuing guidance to a charity and the opening of a statutory inquiry.
Ms. Russell and Mr. Hopkins, welcome. We're looking forward to you describing the situation in the United Kingdom as it relates to the question of extremism and terrorism.
I understand that you have an opening statement.
Michelle Russell, Director, Investigations, Monitoring and Enforcement, United Kingdom Charities Commission: Good afternoon and thank you for inviting us to give evidence to your committee.
I think we'll keep our opening statement short so that we leave time for you to question us on different aspects of the regulatory regime here in the U.K.
The first thing that we'd say is there are 160,000 charities registered with the Charity Commission, and we only deal with the regulatory aspects of a part of the voluntary sector here in the U.K., which is much wider.
We're not a tax authority, so, unlike your own regulatory system, we're a civil regulator. We've been established since 1853, and our powers came out of the courts to deal with charities.
The second thing I would say is in the context of counterterrorism, both in the sphere of terrorist financing and through the range of different shades of issues around extremism and extremist issues. This is one of three areas that are a priority for us, the second area being fraud and financial abuse of charities, and the third is safeguarding and child protection issues involving charities.
But the strategic approach is very similar around different limbs. The first is having the powers to take enforcement action and work with our law enforcement agencies to do so where appropriate. The second is making sure that we're monitoring and supervising the sector and identifying where those risk areas are. The third is that cooperation that I talked about, not just with the sector but with law enforcement nationally and internationally with all of our partners. And the fourth, which we have quite a heavy emphasis on, is about awareness and prevention and working with the charitable sector to help them to protect themselves against abuse — not just, as I said, terrorist abuse but around the range of things.
I'll leave it there. We're very pleased to be able to be with you today and look forward to your scrutiny and questions.
The Chair: Thank you very much. I'll start with Senator Dagenais.
[Translation]
Senator Dagenais: My thanks to our guests for being here. My first question is for Mr. Harman. We know that many investigations were carried out on charities. In an annual report — correct me if I'm wrong — 1,746 investigations or interventions were carried out on various charities. Of that number, about 234 recommendations were made in connection with terrorism or extremist causes.
Can you tell us whether, as a result of those investigations, any charges have been laid against organizations that do fundraising for charities?
[English]
Ms. Russell: I think that question might have been directed to the colleague from the Metropolitan Police who is unable to be here today.
[Translation]
Senator Dagenais: Right, he's not here today. I thought the person next to you was Mr. Harman.
[English]
The Chair: The representative from the Metropolitan Police was unable to come.
Ms. Russell: This is Mr. Tim Hopkins, who works for the Charity Commission as well.
Tim Hopkins, Investigations, Monitoring and Enforcement Directorate, United Kingdom Charities Commission: Unfortunately, our colleague was unable to attend today, but if there are any specific questions for the Metropolitan Police, we would be able to take those and afterwards provide a response to the committee.
[Translation]
Senator Dagenais: I know there are no representatives from the Metropolitan Police. Can you forward my question to Mr. Harman?
We understand that investigations have been conducted on various charitable organizations. We would now like to know whether any complaints have been addressed, whether any charges have been laid against certain organizations. That's the intent of my question.
It is unfortunate that the representative in question is not here.
By the way, madam, I very much appreciated your presentation. But I'm most concerned with the question I just asked.
[English]
The Chair: Do you have any knowledge of charges being laid? Since you are involved in one manner or another, I would suspect you would some knowledge. Perhaps you could share with us what you do have.
Ms. Russell: Yes, we can certainly explain to you how it works in our interface with the law enforcement agencies, including the police. I'll get my colleague Mr. Hopkins to speak about that.
Let me start by saying, and confirming, that terrorism and offences of terrorism are criminal in the U.K. So the primary lead for the investigation of allegations concerning suspected either terrorist financing or criminal extremism is primarily the police.
That said — and I'm sure my colleague will expand on it — there are a number of difficulties that arise in securing convictions for terrorist financing issues, not least in connection with charities.
We can perhaps explain how we work alongside where things fall short of the criminal regime, and we use the regular charity regulatory regime to fill that space.
Mr. Hopkins: I'll take the issue first in terms of convictions, if I may. To date, there are three publicized cases of convictions involving individuals where there's a charity connection who have been convicted of a terrorist financing offence specifically or a terrorist offence where there is a charity, a dimension to it which involves financing.
The most recent of those was an individual, convicted in February of this year, who was collecting funds outside of a charity structure, so not part of a registered charity, but who solicited donations on the basis that the funds were to be used to assist those individuals in need in Syria.
The copy of the commission's inquiry report into that individual and the funds that they raised illustrates the collaborative work that the commission did with one of our regional police forces, the North East Counter Terrorism Unit. It specifically looked to exchange and receive information from that organization, provided them with a witness statement in support of their criminal investigation and gave evidence in support of the prosecution, but also took action to protect and redistribute charitable funds that were donated to this individual to ensure that they were properly applied for the intended purposes, because our general starting point is that unless there is evidence to the contrary, individuals donating to charities or to people that are fundraising or collecting for charity are doing so with the best of intentions and to achieve a charitable end.
In terms of some of the difficulties that Michelle mentioned, there's obviously an issue in securing terrorist convictions generally. It's a very high threshold to satisfy in the legal system here in the U.K. It may be the case that the police look at other potential criminal offences that an individual may be involved in as well, or equally, if it's not possible to secure a criminal conviction, they may look to other regulators or partner agencies that may be able to take action to assist as part of an evidence-gathering process or to take action against individuals where there are such concerns.
[Translation]
Senator Dagenais: Ms. Russell, you are the Director of Investigations and you look after law enforcement. How is the information exchanged between police forces and your organization?
[English]
Ms. Russell: There is very close — as would you imagine and the public would expect — cooperation and liaison between the Charity Commission, which is the civil regulator, and the police and law enforcement agencies.
In our legislation, the Charity Commission specifically has a legal gateway that enables us to disclose and exchange information, in furtherance of our statutory purposes, with any other public authority. It doesn't name those public authorities, but the police would fall into that category. Other members of the security services would fall into it, as would other civil regulators.
It's also not limited to U.K. institutions, so if we were to share information with the Canada Revenue Agency, we would be doing it under our power and under our domestic legislation that enables us, with the right protections and safeguards, to do that.
Our legislation also provides for that gateway to be two-way, so, if other agencies don't have a legal gateway, it enables them to use our legal gateway to share their information with us. We don't disclose the specifics of what information we exchange with our partners, as you would imagine, but we do publicize every year how many exchanges we make in total under that statutory power that's given to us.
But it's not just about sharing information under the statutory gateway. There's very much a close liaison, and, as I said, as soon as an allegation comes to our attention that either involves a charity or is abuse against a charity, we will notify the police and law enforcement agencies through our memoranda of associations and partnerships, protocols that we have in place. So we are able to simply pick up the telephone and get directly to the specialists at the other end of the other partner organization.
I'd also not like to give you the impression that it's all about enforcement. We very much work with our police and law enforcement agencies and government departments in the prevention area, so raising the profile. For example, we have, in our legislation, a duty for charity trustees to report if they have suspicions of terrorist financing. We've recently done some joint work with law enforcement agencies about raising awareness of that particular obligation.
I wonder if there is anything else, Tim, that you want to add to that.
Mr. Hopkins: The only thing that I would add is that a copy of the jointly published alert that Michelle made reference to was sent over to Senator Lang. It's available on the commission's website.
In addition to the exchanges on those particular cases where there will be closer collaboration, it could include providing witness statements and giving evidence in criminal prosecutions in support of law enforcement's investigation, if it involves a charity or individuals connected to a charity.
[Translation]
Senator Dagenais: Large amounts of money pass through charities. When you see those amounts of money, do you ask for additional information?
[English]
Ms. Russell: In the U.K, the charities that we regulate, the 160,000 that are registered on our website, expend about £60 billion every single year. You're right, sir, that huge amounts of financial transactions go through charities, not just domestically; over 14,000 of our charities send funds overseas and often in areas of conflict zone or instability. So there is a huge amount of information there.
In terms of public reporting not on individual transactions, there's a lowered approach in the U.K. to transparency. So there's a public reporting mechanism in terms of our annual accounts. The more income you spend and the more income you have, the more those requirements are about transparency in terms of your accounts.
I should also make clear that because charities transact through the financial services sector, they are of course caught for what we call "suspicious activity reports'' over here in the U.K. So, if there were individual concerns about individual transactions, then the banks would be obliged to file a suspicious activity report with our FIU, or financial investigation unit, which here in the U.K. is the National Crime Agency.
Tim, is there anything you want to add to that?
Mr. Hopkins: The public information that we collect also includes a breakdown by charities of where they're sending their money overseas. If they are sending money to high-risk jurisdictions, that information is provided to us on an annual basis.
In addition to the public reporting that charities have to do and which is available on our website for each individual charity registered with us, the charities have to maintain and preserve accounting records. The commission could inspect those records if it had a concern about a particular charity, and the commission could do an audit to substantiate or not any concerns that we may have.
Senator Meredith: Mr. Hopkins, your comments with respect to the publicized case — was it the Adeel Ul-Haq case that you were referring to? Was that one of those cases?
Mr. Hopkins: That's correct, yes.
Senator Meredith: Was that the first case that occurred in the U.K. where a trustee was charged and sentenced for five years?
Mr. Hopkins: It's the first instance in which the individual who was acting as a trustee of charitable funds was. The two other convictions that took place were effectively where individuals made representations publicly that they were collecting on behalf of charities, whereas those funds weren't intended to go there.
In one instance, two individuals were convicted for terrorist financing whereby they were saying the money they collected was to go to needy people internationally. That was funnelled to their brother who was out fighting in Somalia with al Shabaab. The other case involved individuals who were, again, fundraising domestically, but the individuals for whom they were collecting were intending to commit atrocities in the U.K.
Senator Meredith: As a follow-up, has anyone else been charged with any charities?
Michelle, you indicated that you have 160,000 charities and $60 billion in transactions. How quickly do you move to ensure these charities are shut down when you find that improprieties are taking place?
Ms. Russell: That's a good question. The way our regime is set up is unlike Canada; we have no choice but to register a charity if it meets the legal status of what a charity is and if it's got over £5,000 income.
Once you are a charity, you remain a charity forever. Our powers as a regulator are designed to identify the abuse and take the abuse out of the charity — whether that's an individual — or act to protect the money by freezing the bank account. We have powers to do that. Therefore to put the charity — and safeguard the onward use of those funds forever.
It's not a licensing system in that it's not like a tax system where you can withdraw the licence and, therefore, there's a financial "disbenefit.'' Once you are a charity, you're a charity forever.
So we had very few powers until recently, with one exception, which I will explain now: We couldn't take a charity off the register. We can take the charity off the register if it ceases to operate or it no longer exists, but it was only recently in the legislation that your chairman mentioned that we asked for a limited power to direct the charity trustees to wind up the charity. Those circumstances are where the abuse is so serious that there's been misconduct or mismanagement in the administration of that charity and that, in effect, it's beyond repair, and there is no public interest in its continuing. We've got limited powers now to be able to make that legal direction for the first time as a result of this legislation.
Senator Meredith: Walk us through that in terms of the time frame from the point that you are aware of this abuse with this charity to assets being frozen and then those assets being allocated elsewhere. How quickly do you move to do that? Can you walk us through it? Is it a period of three months, six months, 12 months? Can you elaborate for us?
And the steps that are —
Mr. Hopkins: It would depend really on the circumstances of the case.
If I can refer back to the Adeel Ul-Haq case, we shared with you a copy of the report and it's publicized. There was collaborative work with the police in that regard. Shortly after receiving information from our colleagues in the police, we were able to freeze that individual's bank account, thereby preventing any further funds from being expended from it without our prior consent and authorization. Then, in collaboration with the police, particularly mindful of the fact that although we were of the view that the funds were charitable and donated for that purpose, there was a possibility, given the seriousness of the offence for which this individual was being investigated, subsequently charged and convicted, we needed to be satisfied that we would be applying funds which could be the proceeds of terrorist financing.
So there are some logical hurdles that need to be overcome in that regard, and that can take some time. As well, if there are criminal prosecutions outstanding, it may be the case that we have to await the outcome of that before we're able to apply the final amounts of funds that are available, as was the case with the inquiry we shared with the committee.
So it really depends on the circumstances, but we are very mindful of the fact that we can act quickly and respond to situations as and when they arrive. But it's very much in collaboration with and being mindful of the fact that in any action we take, whilst wanting to protect and preserve charity property, we do not want to inadvertently jeopardize a criminal investigation and possible prosecution.
If I can just go back to your question about convictions, I mentioned the three relating to individuals posing as collectors and fundraising for charities or in the name of charity. Probably the most well publicized case involving a charity being linked to terrorism is the case of a charity called Iqra, which dates back to 2005. I can send a copy of that report to the committee if that would be of assistance.
Two of the trustees of that charity were perpetrators of the July 2005 attacks on the London underground network. So although there was no evidence to suggest that the charity itself was involved in financing those attacks — there were several reports which said that the individuals were self-financed — there was a concern about the use of the charity's premises to plan those attacks, as one of the few meeting points those individuals frequented. A number of other individuals who attended that charity or who were in some way involved in it have subsequently been convicted of other terrorist-related offences, but not involving financing.
So it's broader, possibly, in terms of the abuse that could occur within and of charities, if that makes sense.
Senator Meredith: Ms. Russell, with your powers for monitoring and enforcement, how do you monitor extremism related to charities? Are you able to monitor schools and religious organizations to see their activities, to ensure that they're not diverting funds to terrorist organizations and so forth? How do you monitor it? Can you share that with us?
Ms. Russell: I'll do my best without prejudicing some of our ways of working.
Senator Meredith: Don't give us your top secrets but give us some.
Ms. Russell: There are various ways in which we monitor and oversee our regulation of charities. One of the areas we've tried to articulate and have a discussion about with our sector is where the risks arise from the activities they're carrying out. Some of those risks arise quite obviously: If they're sending money overseas to conflict zones where terrorist groups operate, then clearly the risks to those charities are going to be higher than they are for other charities.
In terms of extremism — and I think this is where things have moved perhaps over the last three to five years — we've seen the resources of charities used in terms of their name, where perhaps they run an event and a speaker is invited to attend charity premises, or with the resurgence of social media, blog sites, websites and chat rooms, where people are using charities and their facilities, if you like. It may not be from within the charity; it may be a donor, a promoter or a member of the public using them as that vehicle.
It's very difficult to monitor and oversee all of that activity. That's not necessarily for us as the charity regulator to do, but we've tried to articulate where those risks are and have a debate and dialogue with the charity sector about prevention. Second, we've introduced a serious incident reporting system where we have placed an obligation on the charities themselves. When they find out or discover that their name or their resources may have been abused for this purpose, they come and tell us quickly, and then we can work with them to stop and manage that. That serious incident reporting regime is growing and working well. Your instinct is that charities wouldn't report, but we are getting self- reports from charities wanting us to help them manage some of these risks.
We also carry out some inspection visits, again, where concerns come to our attention, where we might have it targeted, so if there are concerns in the media about a particular event or activity that a charity has run or done in its name where there is alleged extremist activities, we might do an inspection on the site and talk to them about their policies and procedures and test their due diligence for their speakers against their policy. And at the other end, it's bleeding into the area that I talked about, outreach and awareness. We have one-to-one engagements and dialogues with charities in a more holistic way.
Tim, do you want to flag anything else on the monitoring side?
Mr. Hopkins: There is another report which is published publicly which deals with the issue that Michelle touched upon about the use of chat rooms and the lack of controls a charity had involving a designated individual. I can send a copy of that.
In some instances, by virtue of our engagement with a charity, we are able to see that offensive posts in the short term are removed or taken down from a charity's website or social media. In some instances, once we raise concerns with trustees about invited speakers, charities will decide not to invite them, or the event may be cancelled as a result of our making representations as to the concerns we have.
One must be mindful of the criminal threshold in the U.K. in terms of incitements of racial or religious hatred, but there is a lower bar for charities to ensure that they operate within their legal and regulatory framework, and that's where we're able to intervene when it falls below that criminal threshold.
Senator Meredith: Both of you mentioned speakers and incitement, and a few years ago I got involved in my province with respect to an individual being let into our country. We advised our border security not to let this individual in because they were inciting hate.
One of the critical things is how to collaborate with Immigration to ensure these individuals are kept out, and is there resistance to that collaboration. How do you overcome that? I see a smile on your face, Ms. Russell, so there are probably challenges you face, and I would love to hear your comments.
Ms. Russell: Our principles are similar in terms of the way we work with our law enforcement agencies, with the police, in that we have single points of contact so that we can ensure that when we have concerns we talk to the right parts of the different agencies. That's important to ensure that the right bits of the organization or government departments have joined up and can simply pick up the phone when there is a concern. So the protocols and statutory gateway are very similar.
It's also against a background that the U.K., as a country, has, at very heart of it, the principles of freedom of speech and democracy. Our borders and immigration and other authorities that deal with how that impacts whether or not people have the permission for lawful entry into the U.K. are dealt with by those other agencies. It's primarily for them, and so the decision about whether or not that individual comes into the country will be made by someone else. The commission's role is dealing with the consequences of that and getting the charity trustees to manage the risks.
It's quite a difficult territory where someone does not break the law, either criminal or civil, but is working just underneath where that radar is. As Tim says, what we've developed in the U.K. from charity regulation is, without introducing any laws, the principles of charity law, that they act for the public benefit, and issues of harm will affect whether or not the charity set up for the public benefit, together with the principles about charity trustees acting in the interests of the charity and not taking undue risks, mean that there are some rules around the requirements for due diligence monitoring an NGO's use of funds. The due diligence that charity trustees must apply to their partners is where we can have that engagement as the regulator, which is where these things happen, what is your speaker policy, what due diligence have you done, even if the individual may be allowed into the country, or in these days as we're experiencing today through telecommunications, sometimes the engagement happens over the Internet or telephone. It is not just physical presence we're dealing with in terms of this area.
The Chair: I want to welcome and thank you for taking the time to be with us today.
My understanding is that back in 2014, the United Kingdom National Audit Office did a report on what should be done with respect to the question of the Charity Commission and authorities to ensure your organization could deal with issues such as terrorism financing.
Do you think that particular report was the impetus to begin the changes that eventually came into place with the passage of the legislation this past spring?
Ms. Russell: The National Audit Office report was an inspection into the commission's work in totality, of which this area is one part; the report itself didn't pick up around our work in relation to terrorism. In fact, the follow-up report comments that the commission's relationship with law enforcement agencies is very strong and well developed. The second point of your question was did that lead to the change in legislation, and it may have moved things along more quickly.
We actually asked for these powers, and also pointed out the issues about the limit of our resources, well before that. Ironically, having that report on the public domain and drawing attention to the fact that our powers had limitations did nothing but help the cause of bringing forward a whole realm of powers that we asked for, not just in relation to this area, into the legislation.
Mr. Hopkins: There was a gap both from the National Audit Office's perspective and from a public perception of what the commission was established for and what they thought it was able to do. There was a clear gap between the expectation that other government departments, the National Audit Office and the public had of what the commission could do with its existing powers. Part of the reason this legislation moved quickly with momentum was because it was trying to address those gaps between what we could then do and what the expectations were from members of the public, Parliament and other interested parties.
The Chair: I think we're getting a sense of the scope and the magnitude of the very real problem we face here in Canada, which is not unlike that in the U.K., Australia, the United States or other countries.
How many trustees, directors or staff have been identified as having suspected links to extremism or terrorism over the last five years? Can you give an example of what we're dealing with here? I do know that in 2013-14, 234 exchanges were identified related to terrorism and extremist issues, the way I understand it. So, looking at the numbers of identified transactions and related exchanges, how does that relate now, as we're going forward, with respect to those charities and trustees that might be involved? Give us an idea of what number of people we are dealing with.
Ms. Russell: It's difficult to be specific, but perhaps if I can try to elevate a few figures I can give a bit of context. There are 164,000 registered charities, and there are probably double that that are unregistered or regulated by other entities. Of those 164,000, there are about 1 million people who are charity trustees and probably about the same in relation to employed individuals working for the charity sector, so there are quite a lot of individuals.
On top of that, of course, as well as trustees and employees, there are millions of volunteers who may devote their time and resources, and also donors. So, to some extent, pretty much most of the British public are somehow involved in charity in one way or another.
In terms of how many are considered extremists or are in that area, it's really difficult to put a precise figure on it because most people will have a connection with a charity one way or another. The trouble is trying to identify whether it is incidental, or if the crime has actually been committed within or abusing their position as a charity, and where it is outside that, if you like.
Mr. Hopkins: In terms of the numbers themselves, Michelle referred to earlier our statutory gateway within which we can share and receive information with and from other partners. We cannot give a breakdown of the figures, but it would be misleading for the committee to take away from that that those represent individual charities or trustees in every instance. In some instances, we will be corresponding and there will be exchanges back and forth with other partner agencies about one or two individuals or a small number of charities as part of an ongoing case.
If I could take you back to the inquiry I referred to, the Adeel Ul-Haq case, there were obviously a number of exchanges back and forth between the police and the commission, which would be recorded as part of those exchanges we made. Every time we exchange information with, or receive it from, another public authority, it has to be done under the statutory gateway that we mentioned earlier.
The Chair: What you described is not unlike here. We have so many volunteers involved in our charitable organizations right across the country.
The question we're trying to get to is the magnitude of the problem as it relates to terrorism financing. I find it interesting that in some cases you can file for abuses to the charitable organizations where they are fraudulent or otherwise, but there seems to be a hesitancy to make public whether those individuals are involved with, and have links to, terrorism financing. I don't understand why that's not clearly made available to individuals so that people know when they are donating that that type of influence is involved in those organizations. Could you comment on that?
Ms. Russell: Perhaps I could give a little context. Because terrorist financing is criminal, it's quite a high threshold, so there needs to be proof in the U.K. that the crime has been committed beyond a reasonable doubt. That's the legal threshold in the U.K.'s general legal system.
As Tim said at the beginning, it's sometimes easier to prove that money has gone missing and been misappropriated, and perhaps fraudulently. What is really difficult to prove to that standard is that the money has gone to al Shabaab or to Daesh or to another prescribed group. I don't want to speak for law enforcement, but sometimes it will be easier to get a fraud offence and secure a conviction than it will be to get a terrorist financing offence on the evidence that they have.
I think it's true to say — and we did some work as part of the UN program a couple of years ago, speaking to different countries and law enforcement agencies about their approach — that securing a conviction for terrorist financing is clearly the optimum, but if you can't get that, then securing a conviction for fraud or confirmed misappropriation is still a success in terms of a disruptive event. It is really difficult to prove the end goal or the end area is someone in a prescribed group, and underneath that, you also have the asset-freezing regime led by the UN. But there are also domestic asset-freezing regimes where there are lists of individuals and organizations whose assets have been frozen because of suspicion about their terrorist financing concerns.
We've been public and are happy to say that those lists of individuals on the UN sanctions list are integrated into our systems as the civil regulator. If an individual's name matched one of those publicly available lists that the UN keeps, that would be a flag for us if the charity registered, so we could identify that at the point of entry, and of course, as charity trustees change, we can also identify that straight away.
We had some hits a few years ago where we did identify people on those lists who are charity trustees, and we took the relevant action. That's also why we've drafted in our legislation that if people have a conviction for terrorist financing, that will automatically disqualify them under U.K. law from being a charity trustee. We also have a discretionary provision in there that if they are convicted of an offence overseas, perhaps say in Canada, we would have a discretionary ability if they came to be involved in a charity here to take that similar action to disqualify them.
Senator Meredith: Thank you. On that same point, Ms. Russell and Mr. Hopkins, with respect to extremism, terrorism and resources, is that at the top of your list? What resources have been put in place to ensure that you're actually getting the work done and ensuring that these groups are not being funded? Can you elaborate for me on that? Are there more charges pending with respect to groups that you're actually going after?
Ms. Russell: Perhaps I'll deal with resources and leave Tim to deal with current areas that we're expecting or involved in.
The commission generally has a modest resource. We have £21 million, which finances the Charity Commission for about 300 people in totality. That is for its registration, advice and supporting and guidance functions, as well as the investigative side. I think if you asked anyone if they had enough resources, the answer would always be that they can always do with more resources to be more effective.
I think one of the things we have to balance from a corporate perspective is the risk in relation to terrorism extremism. The impact of it is high, and you know yourselves that it takes very little money to actually perpetrate an attack. So, in terms of terrorist financing, the money is quite small, but the impact is huge and the cases are relatively small in number compared with the size of the sector that we deal with.
That said, we also need to make sure that we're spending enough time and resources on the fraud and financial abuse of charities and the safeguarding areas, so it's always a balancing exercise. But, as I said, we can always do with more. If I can be permitted to be very honest and frank with you, I think we're always quite jealous of the resources that our counterparts in Canada have. Comparatively, they do have some more resources than us. It may still not be enough. I'll leave it there.
Mr. Hopkins: In terms of cases, unfortunately, I'm not deliberately trying to be cryptic, but it would be premature to try to give a number. But, needless to say, there are some ongoing investigations involving individuals connected to charities or where there are concerns about abuse of charities. I'll be delighted, when it's possible to do so, to provide further information to the committee, in correspondence, regarding those, once we're in a position to confirm the conviction, if it's successful, or when the commission itself is able to make its involvement in those cases public.
Senator Lankin: I apologize if you've already spoken to this; I came in a little bit late. You did make reference to, outside of the registered charitable sector, the broader not-for-profit NGO sector. I wonder if you have any comments with respect to what you know about activity of terrorist financing that may be going on more broadly than the registered charitable sector. It has much of the same characteristics of trustees and volunteers and donations, although there may not be tax-receipted donations. While your work is more with the registered charitable sector, what do you know about what is happening with respect to regular not-for-profits?
Ms. Russell: I think, before we get to terrorist financing and extremism, the way in which the charity framework has been developed has been very much a proportionate approach, so this balance between organizations. The vast majority are run on a shoestring, are very small, with volunteers. In the U.K, they don't get paid for being a trustee, and there is always a balance between how much regulation and supervision and bureaucracy you put over that versus making sure that someone's protecting the situation if someone abuses that trust that people have in charities. So there's always that tension. That means that the framework, particularly with the charity sector, has that additional oversight of a charity regulator. Outside of the registered charities, there are other charities that don't have to register with us because they are primarily regulated by another regulator. A classic one might be our schools and universities. There is a separate regulator that deals with universities, and they have similar regimes about the reporting of serious incidents. Student unions are registered charities in the U.K., whereas universities are exempt charities in England and so are regulated at the moment by HEFCE. But you can imagine that issues around speakers on campus cross both our area and the university sector as well.
The other big area would be schools. Not all schools are charitable or required to be registered with us. Again, particularly as we've seen, particularly on extremism, actually, which, fundamentally, if you peel it away, when it involves young people, is a safeguarding issue, you can imagine that our colleagues in the education department are coming from the protection of that. I'm sure you saw a few years ago where some young girls in London who were at school decided to go to Syria, so that whole safeguarding aspect does cut across. But it's very much proportionate, risk-based.
Even within our sector, the risks are not uniform, so not all of the 164,000 charities are at risk of terrorist financing or extremism. I don't know to what extent you're sited on the Financial Action Task Force work around, particularly, recommendation 8, which is the recommendation about our governments and member states protecting their charities and not-for-profit sector from abuse, but the whole principle of that is about layering down and targeting where the risks are, rather than a uniform approach to the whole of the sector.
The Chair: I just wanted to follow up, if I could, because we're trying to get a sense of looking ahead and going forward. First, with the results of the legislative changes that took place here last spring, is that going to give your organization enough authority to deal with those situations when you come across the issue of extremism and, for that matter, terrorism financing, when it has been identified? Have you got the tools now to take the steps that you need to be able to bring that to a halt?
Ms. Russell: I think we would say that some of the powers we had already were critical to our work in this area, as you could see by the inquiry report into Ul-Haq, where we did some protective action and direction of those.
The new powers that we've got, as Tim said, have helped to fill a gap where perhaps it's not proportionate to use some of the most interventionist powers but you might want, for example, to use a warning power where perhaps the trustees have taken their eye off the ball. One of the things we deal with is to try to separate a different approach from deliberate abuse through to where the trustees are being negligent or reckless and that exposes a risk that someone else can use to where someone has made an honest mistake, and these powers help us to deal a bit more proportionately, in a more graded and shaded way, with the different sorts of abuse we're dealing with. One of the other things I'd just pull up here is that, traditionally, some of our older powers have clinched the financing. It has been about protecting money and looking at transactions. Some of the more general powers that we have here, not just in this territory but on safeguarding and financial abuse and tax abuse more generally, will enable us to have more of an armoury to adapt to new circumstances and new sorts of abuse that we get. I think that's one of the things: The abuse itself it is not standing still. Those who want to abuse charity are finding more elaborate and more sophisticated ways, and it's important that we keep up as regulator.
One of the most important things that came in in the new legislation was stopping someone who had a terrorist financing conviction from actually stepping into the shoes and acting as a charity trustee. That is critical. Also, if they were on asset-freezing regimes. Also, with the new powers, where perhaps there's conduct that's not necessarily connected to the charity itself but is in someone's personal life that impacts upon their ability to be a charity trustee, we will for the first time be able to, where it's in the public interest to do so and their behaviour means they're unfit, protect charities by making sure those individuals can't get near a charity in the first place.
[Translation]
Senator Carignan: My question is for both Ms. Russell and Mr. Hopkins. Can you elaborate on the appeal tribunal known as the First-tier Tribunal as a member of the commission? How was this entity generally received by the public?
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Mr. Hopkins: The Charities Act 2006 introduced the Charity Tribunal. It was introduced as a mechanism in response in part to concerns from the sector itself about the difficulties there were in challenging the commission's legal decisions.
It introduced a framework whereby certain powers that the commission can exercise carry with them either a right of appeal or an ability to effectively request a review of the decision that the commission has taken. It's meant to be a quicker and more cost-effective process for charities or individual trustees to effectively challenge the commission and its decisions, rather than the process that was in place prior to that.
In terms of the views of the sector and how it's working, I don't know to what extent we can comment on that other than it was a welcomed introduction in the Charities Act 2006. It is used by individual trustees or on behalf of charities where they feel that the commission has made a mistake in respect of a decision it's taken and they have sought to appeal that. Some appeals have gone in our favour and some haven't.
Ms. Russell: I would just add that the sector itself places great importance on the role of the Charity Tribunal.
Perhaps we should have made clear that if we exercise any of our powers, including the ones that are temporary protective, for example, to suspend a trustee or to freeze a bank account, we have to do so. Although we can do those without notice, we have to present our evidence to the individuals in a statement of reasons. We can't use police intelligence or information that would not withstand the legal test for us, as a civil regulator, which is the balance of powers.
So if we're ever using our powers in that way, we must be able to present that material. It's that material and the decisions being made that are then appealable, through our internal processes first and then, concurrently, to the appeal tribunal.
I suppose we should also make clear that even without the tribunal there is a principle of judicial review, which is that any decision made by a public authority can be challenged at the court. There's a filter system, and even if there's not a power or a provision to take something to the tribunal, judicial review is another option that some charities have used against the commission.
[Translation]
Senator Dagenais: In Canada, the regulation on the use of funds by charitable organizations, including during election campaigns, probably differs from that of the United Kingdom. Have any investigations been conducted? Finally, have any charges been laid previously?
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Ms. Russell: That's quite a complicated landscape. Perhaps I will just explain the general principle from a charity law perspective. Charities are allowed to campaign in furtherance of their charitable objects, but an organization that had a political purpose as its sole purpose could not in law be a charity. So there's that framework to start with that is a filter in the basic law.
There have been some additional provisions under the lobbying legislation that require charities that did certain activities — primarily because of the activities, not because they were charities — to do some registration. It's fair to say some controversy surrounded it in the sector here in the U.K. But for us as a regulator, because we are an independent government department — yes, we're a government department, but we're independent — we didn't police and lead on those additional requirements for charities. Our regulatory remit is on whether the charities were pursuing activities in breach of the sort of basic charity law provisions, which have not changed in a number of years and are well established under charity law case law.
Mr. Hopkins: I will just add more, as well. In the past, there have been some instances — as Michelle said, a charity can't exist to have a political purpose, but it also can't provide support to a politician, a political party or a political candidate.
There have been instances in the past where there have been concerns about financial resources being made available to a political party in the form of a donation that was a mistake on the part of the charity. We've taken steps to ensure that those funds were returned and, where necessary, that action was taken against those individual trustees.
The Chair: Just to conclude on Senator Dagenais's question, my understanding is that something like 17 cases were opened this past year. Does that mean there are 17 court cases under way, or have any definitive decisions been taken on any of those particular identified charges?
Mr. Hopkins: Sorry, do you mean in respect of political activities?
The Chair: Yes.
Ms. Russell: We're not quite clear what cases they refer to. Are they cases by the electoral commission?
The Chair: Could well be. I'm not quite sure how your system works. The information we have is that there were 57 complaints of charities improperly involved in the political process and that 17 cases were opened. Where that goes, I'm not sure. Perhaps you could clarify for us.
Mr. Hopkins: We will look into that and send back something to the committee in correspondence, if that's all right.
The Chair: Okay, thank you.
Senator Meredith: I have one final question to Ms. Russell and Mr. Hopkins. With respect to enforcement and any potential threats to trustees from these extremist groups, have there been any ongoing cases where you've had to support those trustees in ensuring that your enforcement of or the shutting down of their charities was actually upheld? Are there any you can share with the committee?
Ms. Russell: Yes. Perhaps we will expand on a few things. I talked about the serious incident reporting regime. Over the last year, we had 21 self-reports from charities that were concerned in this area. You're right that sometimes the charities themselves struggle with how they manage this situation and turn to the commission for help and support.
We've done quite a lot of work in producing public guidance that both makes clear the legal obligations under charity law for charity trustees and provides a sort of Q&A session of how they manage some of the risks. Sometimes it's about supporting them and directing them in that way.
There have been occasions, as I talked about at the beginning, where the premises of a charity, perhaps unknowingly, have been used; someone hires the charity's premises, and it turns out it was used for a particular event that causes them concern. In that sort of area, we again work with the charity trustees to help formulate their response, because there's quite often media attention around that. It's also about how they deal with that going forward.
I don't know if there's anything else you want to add on that, Tim. We have had some cases around that sort of issue.
Mr. Hopkins: If I understood correctly, part of your question is around the personal security of trustees themselves.
Senator Meredith: That's correct, yes, Mr. Hopkins.
Mr. Hopkins: There is a mechanism whereby we have a public register of charities where individuals who are trustees are named, but we do have a facility whereby we can effectively grant dispensation. If there are real safety concerns on the part of either a body of trustees for a charity or some of those trustees, we can look to effectively not make their information publicly available about their role within a charity in the same way that we can also not make public their registered office address and so on and so forth. A classic example is for things like women who are the victims of domestic abuse. So we are able to provide that additional security there.
Ms. Russell: We provide assurance to members of the public, trustees or employees who whistle-blow to us about what's going on in the charity. We guarantee anonymity. We say that we have to deal with the cause or complaint you're worried about, and perhaps people may guess who you are, but we never tell, when we go back to the charity, who it is that's complained. We're looking at the regulatory issue and their response. We do provide that protection of confidence.
There's a charity in the U.K. called Crimestoppers where people are able to provide anonymous tipoffs to the police and law enforcement agencies about their suspicions about crime, and that does provide some protection to people worried about their own personal safety in terms of coming forward.
Senator Meredith: My final question is related to the 165 charities that the commission publicly listed with respect to their activities. How do you flag those ones linked to extremism and terrorism?
The Chair: Is that on the database?
Senator Meredith: Yes, that's correct, the 165,000 on your database.
Ms. Russell: We don't directly flag who is at risk of terrorist financing or extremism. We have a public register with a page for every registered charity that has all of their financial information that they publish and send to us and basic information about who their trustees are, what they are designed to do, what activities they are doing and links to their public websites. There's transparency around each charity.
What we do in our most serious cases where we have a statutory inquiry involved is publish a report setting out our findings and conclusions, and we publish that for two years on the charities register page so that the donating public can make an informed decision.
Sometimes our public inquiry reports will clear a charity, if it's in response to public concerns. It's just as important to put the record straight that there has been no abuse, as well as the cases reporting where we have had to use our powers because there's been misconduct or mismanagement in the administration of the charity.
We also flag when we use our power to put in an interim manager, which effectively displaces all of the charity trustees. Again, the donating public can see whether or not we have used our powers to put an interim manager in place; and equally if there are qualified accounts from their own financial audit that raise some concerns, we've started flagging that on the public register so that the public can decide for themselves whether or not to continue to donate.
Mr. Hopkins: The qualified accounts wouldn't necessarily be specific to concerns of terrorism or extremism; it would be across the board in terms of the financial management on the part of the trustees of a particular charity and whether or not there were any identified weaknesses and concerns in respect of their duty to account for their income and expenditure of a particular charity.
Senator Lankin: Could you give us a feel for the number of cases in any given year, on average, where you would use your powers and whether it would be fraud or deregistering or putting in an interim, the general number of cases, and what proportion of those would relate to terrorism financing versus general misappropriation of funds or mismanagement or incorrect political activities or a range of other things that could cause you to use your powers?
Ms. Russell: We don't break them down specifically in terms of what type of abuse we've used our powers for, but we are transparent and publish every year in Tackling Abuse and Mismanagement, not just the wider lessons but what we've done in terms of use of powers. It's roughly 1,500 times that we would use our compliance powers each year. A lot of those are about demanding information, so issuing an order to force someone to hand over documents or require attendance to give evidence or attend and provide documents to us.
A lot of them are about information gathering and information demands, but we still have some that relate to either using interim managers or removing people from their positions as trustees. For example, we exercised our powers to remove around 14 people from their positions within a charity at the time. I should caution, one of our loopholes that have been plugged is that we gave notice of our intention to remove someone as a trustee, and that enabled that individual to resign before we could use our power to remove them; therefore, they avoided the consequence of being banned from being a charity trustee from other charities. We've now plugged that loophole in this legislation, so we would expect some of those powers to arise.
I'm sorry to be evasive in terms of how many are directly related to terrorism and extremism, but as I said at the beginning, some of this is complicated in that you can prove money has gone missing perhaps when you're in Syria or when you're working near Nairobi and Somalia, but you can't prove that it's gone to al Shabaab, Daesh or Hamas. We do publish the totality of the use of our powers.
Mr. Hopkins: In certain cases we may be using multiple powers. So it's not 1,500 individual cases; it could obviously be a smaller number of cases, but we may be exercising powers on multiple occasions. So suspending trustees, then removing them, also freezing bank accounts and requesting information.
The Chair: It's important from a transparency point of view. When you do use those powers and you come across a situation where individuals were involved in terrorism financing or extremism, and you decided you're going to remove them from that charity as a trustee, do you clearly state that's the reason, or do you say that we removed so-and-so and we exercised our power? What description do you use?
Mr. Hopkins: If I could just refer back to the Adeel Ul-Haq case, because it's been publicly available. As Michelle said, when we exercise certain powers we have to provide a statement of reasons to those individuals who are effectively listing the evidence that we are relying upon in order to exercise that power.
At the time that we removed that individual, he hadn't been convicted, but he had been charged of terrorist financing offences. That was made reference to in a statement of reasons that we provided. In addition to that there were other pieces of evidence we were able to rely upon, including inability to account for the money that had been received, the mixing of charitable funds with personal funds, some other examples that were added in. As I said, we have to provide a statement of reasons, but we have to outline effectively the grounds we're relying upon to exercise that power, and for some powers we have to demonstrate or satisfy two limbs, so effectively demonstrate that there's misconduct or mismanagement in the administration of a charity and that there's a risk to property. We have to ensure that we have reasons and an evidential basis to satisfy both of those limbs.
The Chair: I can see to some degree we're somewhat handcuffed.
Senator Kenny: You may have gathered that the committee is struggling to get a sense of how large the terrorist problem is. We understand, clearly, that it's very difficult to press charges against someone using a charity; it's much easier to find other ways where they've misbehaved, and we all rationalize it, well, we got that fellow off the street and it's a step in the right direction. The number you gave us a little while ago was 14. Is that consistent with how many terrorists you have had a sense might have been using or abusing the charity system in the U.K.?
Ms. Russell: I think what I would point to is that we've got a million trustees, 164,000 registered charities and more unregistered. There are really about 100 cases every year which we would feel are serious enough for us to engage with, not necessarily saying there have been terrorist financing offences and the charity is at fault. They include cases where we think the charity is at greater risk, and perhaps they're coming to us and need our particular help and engagement.
I hope that gives you a bit of a flavour of it. I think, again, I'd just go back to the idea that numbers are quite difficult to gauge in this particular area. The impact from one individual case can be completely catastrophic if it leads to attack planning and an individual attack in a particular country, whether it's domestic or overseas, versus coming back to what I mentioned earlier, which is that charities are actually so ingrained in society, and we rely on them and the not-for-profit sector to do so much in society. It's highly likely that if there is a police investigation or a concern about extremism or terrorism, somewhere along the line you will stumble across someone who has some connection to charity.
So, it's about balancing those two extremes, I think. A lot of what we're doing outside of individual cases is about raising awareness and preventive work, because actually what we'd rather deal with is having charities manage the risks and protect themselves from abuse in the first place so that for extremists and those who want to seek to abuse charities it is, if you like, a hostile environment, which means they turn away.
There's also quite a bit of work outside of those 100 cases where we're trying to work with and educate the charity trustees. I think in this context it's actually really important that the prevention and awareness aspect of all regulators' work is not lost amongst, quite clearly, needing to use its powers and work with law enforcement where there are incidents of abuse.
Senator Kenny: You don't have the sole franchise for abuse of charities in the country. What about your tax folks and the police proceeding with something that didn't really start with your shop? We have your estimate — and we appreciate it — of around 100 or so cases a year. How many others are there that are charity-related that you didn't have to deal with directly?
Ms. Russell: I'm not sure we could speak on behalf of our fellow departments, but we could try to ask for that information if the committee wanted it.
I suppose what I'd say is, again, because terrorist financing is criminal, the first port of call in any allegation is the police and law enforcement agencies.
I think it's fair to say that most of the key government departments or regulators all have a strong relationship with the police and law enforcement, particularly the National Terrorist Financial Investigation Unit, and multi-agency cooperation within that sphere is quite well practised. Sometimes there are discussions about which agency, if the police are not the ones to take it forward, is best placed to work on it. It might be borders and immigration, to refer to your previous colleague's inquiry, the education department or indeed, as you suggest, the tax authority should employ some disruptive action in relation to that.
Criminal sanctions are the ultimate, and clearly we want to use them where we can secure it, but other regulatory and legal regimes are used for disruptive and deterrence purposes in this context.
Senator Kenny: Your tax people, if they are anything like ours, have the same concerns about how difficult it is to arrive at a conviction for terrorism, but there are numerous other intermediate steps that they can use that they hope will have the same effect.
Is that the case in the U.K.?
Ms. Russell: Yes. Disruption techniques are used in the U.K. as well, although our tax system works slightly differently in that there is a specialist part of the HMRC, which is the tax authority that specializes in counterterrorism areas or terrorism matters because of the nature of the financial system and regulations which we apply, that deals with charities.
The Chair: Can I just follow up on this? I'm trying to get some sense of the scope, along with Senator Kenny, of the problems that we face in this particular area. We do know that not a great number of organizations are involved in this. But we hear and read about reports of organizations utilizing millions of dollars, in one manner or another, through either non-government charitable organizations or strictly non-government organizations for the financing of this activity.
Do you have any understanding or estimates from the commission's point of view of how many dollars are being funnelled through the charitable organizations that you are responsible for? Are there any numbers or estimates from the last five years?
Ms. Russell: For terrorist financing risks?
The Chair: Yes.
Ms. Russell: No. I don't think there is any estimate that's specific. It's dealt with in each individual case, and there are the difficulties that I mentioned earlier in terms of some of them being caught under the statistics that are kept by law enforcement regarding other crimes.
The only thing I would say is that in terms of some of the risks, if you like, and where the risks are, there are about 12,000 to 13,000 charities that operate overseas. Millions, if not billions, of pounds leave the shores and go overseas. Some of them are in areas where the risks are higher around terrorist financing — particularly, at the moment, in connection with Syria. There, of course, you've got a huge need for humanitarian aid and relief and wanting to get funds into there and displaced areas around the side, coupled with where the risks are.
It's really difficult between the risk and where you can actually prove that there has been a terrorist financing offence. I would just reiterate that in some of the cases that have gone to court where there have been convictions, the sums involved are relatively small.
The Chair: I want to move on to a couple of other areas, and then we'll come to a conclusion, if that's okay.
Can you give us any comments about what's referred to as the prevent duty legislation that has come into effect in England? How does it contribute to the work of your committee?
Ms. Russell: The prevent duty has been brought in, but it has nothing to do with charity law. It was brought in by a separate piece of legislation, and that places on some authorities involved in charities a specific statutory duty. There's been quite a controversy, I would say, around the prevent duty, but from the commission's perspective, some of the things that it's designed to achieve are already reflected in charity law. The principles about acting in the best interests of the charity, managing your risks and doing due diligence on partners that you're working with or speakers you're inviting are already in the charity law framework.
From the commission's perspective, particularly in the university context, this has generated additional concerns and noise. Some of the charities and student unions would have to apply some of the measures anyway under charity law. Perhaps that's something we haven't said already, which is in terms of policies, procedures and things that charities should do, if they protect themselves against financial abuse generally and act prudently, they should protect themselves against terrorist financing and extremism abuse. So there has been no need to introduce specific legislation for charities under charity law to step up the guard against terrorist financing and extremism because the fundamental principles of charity law already apply.
The Chair: I want to go to one other area, and that's the question of the difference between our system and your system. You as a commission are independent and report to Parliament, whereas through our system we have a department, and it reports to a minister and then to Parliament.
Do you find the fact that the commission is independent means that you have a lot more latitude in exercising and ensuring the provisions of the legislation are followed and you can take the appropriate decisions when called upon? That's the first question, because that's an area we might be able to look at.
Second, the reason I asked this question is the question that you have raised of extremism and the fact that you as an organization have the ability to set the protocols and the guidelines for charitable organizations such as universities and institutions, religious or otherwise. There is a certain moral framework that you have to work within, and you can interfere or at least come to assistance to see if you can redirect if there is an extremist point of view contrary to what is acceptable in society being expressed. Can you give us some observations on how you operate and how you find your independence?
Ms. Russell: You're right, partly because the commission was born out of the courts, the judiciary; and because of the executive power that flows from that and the separation in basic jurisprudence between legislative, executive and judiciary, the decisions that it exercises are quasi-judicial. Those powers that we talked about, although confirmed in statute, are quasi-judicial, so there is a protection or safeguard written into our legislation that says no minister can direct or control us by, for example, insisting that we open a case into a particular charity or that we take executive action into another charity. I think that's quite an important safeguard for us in terms of the powers, so we're not put under political pressure when we're exercising quite fierce regulatory powers.
There are some downsides in that we don't have a minister. We're a non-ministerial government department, so for our policy lead, there is a minister who has the policy lead for us, but it means, for example, that when it comes to carving out the money, we don't necessarily have a voice directly around the table. I would say it's an important safeguard. I think it's treasured by our charity sector, and it takes that safeguard very seriously and wants assurance of that protection from political interference in the way in which we conduct our work.
The other thing I would say, though, is that charity law here isn't codified. I know there is a bit of legislation that has the principles of our powers, but the actual rules for charity are largely based in case law and fiduciary duties, and because they are enshrined in case law and fiduciary duties, those basic principles about acting in the best interests of the charity, managing your conflicts of interest, making sure you don't take undue risk with the charity's property and the basics of ensuring that you operate for the public benefit mean that there is some flexibility in how those rules apply to individual charities. That has meant that one benefit is that in the context or environment in which we work now, where there is a hostile environment in terms of extremism, the rules are applicable to deal with that situation without any new legislation or regulation being entered into, so that's the benefit.
The disadvantage is that it becomes difficult for us as a regulator to produce guidance that applies for all the different types of charity there are. We have to deal in high-level principles, so some charities find it frustrating that there is not a very clear checklist on what they have to do because it depends on their income, where they work, what they do and all those sorts of things.
I hope that has given you some comment in relation to those aspects of the question.
Senator Meredith: This question relates to your powers coming from the courts. We brought in legislation in Bill C- 51 just last year with respect to information sharing, where 16 government departments now can receive information.
How do you balance that with respect to the rights of the individual, those who pay taxes and their confidentiality? How do you manage that? That, again, becomes a problem where a charities directorate and this Senate committee have spoken about the fact that it's a conundrum. How do we deal with that with respect to privacy and information sharing? I would love your opinions on that.
Ms. Russell: That's an important principle that's enshrined in U.K. law as well, and we have a separate Data Protection Act and privacy legislation that we as a public authority have to comply with. There are certain exceptions — not complete exceptions — particularly around law enforcement that provide ability for effective engagement and liaison for law enforcement agencies. Not all of the information we would exchange would be personal data information. I should make that clear.
Where we do exchange information under our statutory gateway, we have to comply with the protections that are in the Data Protection Act and privacy legislation. That means either the individual has to consent or there is a legal obligation for us to provide that information or we're doing so pursuant to our statutory powers where it's in the public interest to share that information with another agency or regulator in the way prescribed.
There are a huge number of protections about the safety of that information, what they can do with it, how they hold it and when they have to destroy it. That's probably a whole other committee session, but we clearly won't go there.
The Chair: Colleagues, on your behalf, I would like to thank the witnesses for spending so much time with us, and I know it's quite a bit later in your part of the world.
Thank you again for a very informative testimony, and we look forward to getting whatever information you have committed yourselves to sending to us. Thank you. I would like to excuse the witnesses.
Ms. Russell: Thank you.
The Chair: Colleagues, I would like to take a five-minute break, and then we will go in camera to discuss a number of items. First is the visit to New York, and second is going towards a final report on the defence review policy that we've been charged with.
(The committee continued in camera.)