The External Conduct Standards are here – are you complying with them? -

The External Conduct Standards are here – are you complying with them?

The Australian Charities and Not-for-profits Commission (“ACNC”) External Conduct Standards have now taken effect. The standards apply to all registered ACNC charities that operate overseas or work with a third party that operates overseas. Are your directors and responsible persons aware of how these standards may apply to your charity?

On 23 July 2019, the External Conduct Standards, which are contained in the Australian Charities and Not-for-profits Commission Regulations 2013 (Cth), came into force.

The External Conduct Standards are a set of standards that outline how a registered charity must use its resources and manage its activities outside Australia.

There are four standards that apply as summarised below:

Standard 1: Activities and control of resources (including funds)

Under this standard charities must take reasonable steps and implement procedures and processes to ensure that use of its resources and the undertaking of its activities outside Australia are carried out in a way that is consistent with its purpose as a not-for-profit entity. This standard also requires relevant charities to comply with Australian laws (e.g. about money laundering, financing of terrorism and slavery) in relation to its activities outside Australia.

Standard 2: Annual review of overseas activities and record-keeping

This standard requires relevant charities to keep records that enable it to prepare a summary of its activities outside Australia on a country by country basis for each relevant financial year.

Standard 3: Anti-fraud and anti-corruption

Under this standard relevant charities must take reasonable steps to minimise any risk of corruption, fraud, bribery (etc.) by its responsible persons, employees, volunteers and third parties outside Australia and identify and document any conflicts of interest for such persons.

Standard 4: Protection of vulnerable individuals

This standard requires relevant charities to take reasonable steps to ensure the safety of vulnerable individuals outside Australia who are either being provided services by the charity or are engaged by the charity to provide services to other parties.

The ACNC’s approach is to assume that all relevant charities are complying with the External Conduct Standards. However, if requested, charities must be able to provide evidence of meeting the standards. The ACNC will take regulatory action against charities that have seriously or deliberately breached the External Conduct Standards.

You can find more information about the External Conduct Standards on the ACNC website.

If you require legal advice or assistance in relation to complying with the External Conduct Standards, please contact our Not-for-profit Team on (03) 9629 9629.