For most Canadians and Canadian Charities the Anti-Terrorism rules are a red herring to be reviewed only in the rarest of situations, if at all. However, recent events in Israel provide some motivation for Canadian Charities doing work abroad to take a closer look at these rules. According to international news reports the Israeli authorities have arrested the Gazan head of an international Christian charity (which we will just call the Charity) on the allegation that he was funneling international aid donations to Hamas.
The specifics of his involvement in the operation are fascinating but not germane here. The fundamental fact of importance is that the Gazan branch of the Charity was receiving aid, from amongst other sources, various international governments for distribution in Gaza. Another important fact is that while Hamas is classified as a terrorist group by various governments around the world, it is also the functioning government of Gaza and being a terrorist group does not preclude them from doing work that would otherwise be considered charitable. For example, Hamas apparently helps the disabled in Gaza (of course it also disables people which is why it is a terrorist organization). As various international governments used the Charity to distribute aid in the region, the announcements (and presumably the sharing of evidence) resulted in formal governmental decisions to end this practice.
Canadian laws are effective in preventing such a situation from arising. Operating charities know that they must maintain control and direction over funds and assets spent inside or outside Canada, even if the funds are actually distributed by a related affiliate (usually as an agent of the Canadian charity).
Where things get dicey is when a terrorist organization also conducts what would otherwise be charitable activities, in this case Hamas and its ostensible work helping the disabled. In these cases, the anti-terrorism rules may potentially apply to ensure that funds do not go from the Canadian charity to the foreign terrorist group acting as its agent in conducting even charitable activities. Again, it bears mentioning that there is no allegation that the Canadian branch of the international charity was implicated in anything illegal in Canada or Israel. But, where a Canadian Charity does engage in such activities, it could become subject to a special set of rules to immediately revoke its charitable registration (amongst other punishments and humiliations).
While it will be interesting to see how the Israeli case develops, it will be even more interesting to see whether the foreign governments work to put in place similar laws as we have here in Canada, which not only ensure that the charities are accountable for every dollar that is spent, but ensures a separation between charity dollars and those “bad actors” doing good things.
Drache Aptowitzer LLP
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