The counter-terrorist finance legal framework: the impact of regulatory compliance on relationships between charities and financial institutions
| DOI | https://doi.org/10.1108/JFC-05-2021-0110 |
| Published date | 16 July 2021 |
| Date | 16 July 2021 |
| Pages | 792-804 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial crime |
| Author | Angela Maria Theresa Fowler |
The counter-terrorist finance legal
framework: the impact of
regulatory compliance on
relationships between charities
and financial institutions
Angela Maria Theresa Fowler
School of Law and Social Justice, University of Liverpool, Liverpool, UK
Abstract
Purpose –The purpose of this study is to explore the relationship between charities and financial
institutions, as each represent pivotal structures in upholding the counter-terrorist finance (CTF) legal
framework, and to investigatewhether matters of regulatory compliance impact on the abilityof charities to
fulfil theircharitable purpose.
Design/methodology/approach –This paper draws on the empirical evidence derived from 34 semi-
structuredinterviews conducted by the author.
Findings –The understandingcreated by the interview data illuminatesthe challenges and opportunities of
interaction betweenthe charity sector and financial service sector in their interpretationand implementation
of the CTF regulation.Both direct and indirect effects of this regulatoryframework may ultimately affect the
operatingcapability of some charities.
Originality/value –The research makes an original contribution to the available knowledge, providing
new insights and perspectives by uniquely analysing relationships between stakeholders from the
perspectiveof charities: asking a new set of questions to a new set of participants.
Keywords Financial crime, Financial institutions, Charities,
Counter-terrorist finance legal framework, Regulatory compliance
Paper type Research paper
1. Introduction
The political response to the terrorist attacks of 11 September 2001 in the USA was swift
and decisive, precipitating developments in the arena of counter-terrorist finance policy and
legislation, which were to have far-reaching consequences (Eckert, 2008). International
regulatory bodies,such as the Financial Action Task Force (FATF), previously focussingon
money laundering (ML), extended their repertoire to include terrorist financing (TF). They
recognised the potential for non-profit organisations to be exploited to raise, store and
transfer funds for terrorist purposes and were thus identified as a key area on which
governments shouldfocus their attention (FATF, 2001).
Regulation intended to counter this perceived threat, overseen by the Charity
Commission in the domestic jurisdiction (England and Wales), requires a range of due
diligence measures targetingcharity donors, partners and beneficiaries. This has resulted in
additional responsibilities for trustees as custodians of their charities, which could be
burdensome for some as they navigate a profusion of requirements mandated by charity
law and other legislationsuch as the Trustee Act 2000. Issues relating to sanctions regimes,
JFC
29,3
792
Journalof Financial Crime
Vol.29 No. 3, 2022
pp. 792-804
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-05-2021-0110
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