Cash couriering increases the risk of seizure or forfeiture charitable funds
Following both changes to the law on carrying cash and continued cases involving the seizure of charitable funds held as cash by the police and officers of UK ports, the Charity Commission (‘the Commission’) has published this updated alert on cash couriering in partnership with SO15 Counter Terrorism Command, Metropolitan Police Service (‘SO15’).
Risks of Cash Couriering
The Commission continues to see a number of cases involving cash seizures from individuals who have indicated that they are carrying cash on behalf of a charity or for charitable purposes. In line with international standards, the Commission defines cash couriers as the people who physically transport currency on their person or accompanying luggage from one jurisdiction to another. This could be a charity representative or a third party acting on behalf of the charity.
The Commission strongly advises charities against the use of cash couriering as a method to transfer charitable cash due to the significant risks involved. These risks include:
Cash Continues to be a High Risk for Terrorist Financing and Money Laundering
The UK government’s latest National Risk Assessment (NRA) highlights that cash continues to be at high risk for both terrorist financing and money laundering. In particular, cash couriering is considered to be a popular method of moving terrorist funds overseas from the UK. Since 2017, according to the NRA, cash seizure powers have continued to be used regularly by law enforcement and there has been an increase specifically in cash seizures suspected to be linked to terrorist financing.
Moving Charitable Funds Overseas
The Commission recognises that charities which work internationally need to move money across borders. All charities need to have access to, and use, a bank account in the charity’s name in the regulated banking system. Using the regulated banking system is a prudent and responsible way to protect charity funds and maintain appropriate audit trails of the sort which trustees must keep for the receipt and use of money. This is the case even if transferring funds through such channels incurs an administrative cost.
Formal banking systems should always be used where they exist as they provide the safest and most auditable means of transferring charitable funds.
If formal banking facilities are available but not used, trustees need to evidence the exceptional circumstances for operating in cash and that they have managed the associated risks effectively. Failure to do so may be considered as misconduct and/or mismanagement of the charity.
The Commission reminds trustees considering the use of a cash courier of their duty to account for their charity’s income and expenditure by maintaining and preserving accounting records and to act prudently and responsibly to protect their charity’s assets.
In What Circumstances Can a Cash Courier be Used?
The Commission accepts that, in exceptional circumstances – where other means of transferring funds are not available – cash couriering may be the only option available. In such circumstances, the Commission expects, as a minimum, that the trustees will have put in place and fully documented the following safeguards to discharge their trustee duties. Trustees will need to assess the risk to their charity, taking appropriate advice when necessary, and as such, this list will not be exhaustive:
If you are travelling as a group with more than £10,000 in total (even if individuals are carrying less than that), you still need to make a declaration.
Trustees have a duty to comply with the law. If you do not declare cash that you should have, all the cash you are carrying can be seized by a Border Force officer. You may have to pay a penalty of up to £5,000 to get it back.
Declared cash or amounts under £10,000 can still be seized by customs authorities if they have reasonable grounds to suspect a crime.
Please refer to HMRC’s guidance Taking cash in and out of Great Britain for further information. There are specific provisions and exemptions regarding carrying cash to Northern Ireland (including from Great Britain) and from Northern Ireland, also noted within HMRC’s guidance.
Reporting Concerns to the Commission
The Commission expects trustees to ensure that any seizure or forfeiture of their charity’s funds is reported to it as a Serious Incident Report. It is expected that any cash seizure or forfeiture would be reflected in the charity’s financial statements, with cash forfeitures also reported in the charity’s annual return.
Summary
In summary, the Commission’s regulatory advice for charity trustees is:
Please see Chapter 4 of the Charity Commission’s Compliance Toolkit for further information on holding, moving and receiving funds safely including cash couriering.
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