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News — New governance standards for charities with overseas activities

Charities working overseas will be subject to new standards of governance, called External Conduct Standards (ECS).

According to the Australian Charities and Not-for-profits Commission (ACNC), these standards will cover a range of activities — including sending funds overseas from Australia — and are intended to provide a minimum level of assurance that charities meet appropriate standards of governance and behaviour when operating outside Australia.

It is proposed that the External Conduct Standards will apply to charities’ overseas activities as well as their management of funds and aid sent overseas.

The four standards will require charities to manage their activities and the control of resources overseas, conduct an annual review of overseas activities and record keeping, ensure protection from fraud and corruption, and safeguard vulnerable individuals.

The proposed External Conduct Standards were tabled in Parliament on 26 November 2018. They will be implemented through regulations under the Australian Charities and Not-for-profits Commission Act 2012.

Unless they are disallowed, the External Conduct Standards will come into effect on 1 July 2019. Unfortunately, the ACNC notes that at this stage, it is not clear precisely when the disallowance period will come to an end.

The ACNC suggests that charities that operate overseas should start reviewing the proposed standards as they are and consider how they may affect their operations if they do come into effect.

The regulator notes that just how a charity complies with the proposed standards will depend on its particular circumstances, including its size, its funding sources, its activities and the needs of the public.

The proposed standards will operate in addition to the existing ACNC Governance Standards.

The ACNC’s initial focus is expected be on ensuring charities are aware of their obligations under the new standards and providing information and tools to help them comply.

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Acting for You, February 2019

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