Aug 2023 Charity & NFP Law Update
Practical Guide for Charities and Humanitarian Organizations to Bill C-41 and the Provision of Aid
Following the Taliban’s return to power in Afghanistan in August 2021, Canadian not-for-profits were prohibited from providing aid to the people in Afghanistan due to restrictions under Canada’s overly broad anti-terrorist legislation. In response — and as previously reported in AML/ATF and Charity Law Alerts No. 51 & 52 — the federal government has adopted Bill C-41 to amend the anti-terrorist financing provisions in section 83.03 of the Criminal Code so that Canadian organizations may provide humanitarian aid and other assistance to those in need. While previous alerts have focussed on some of the issues and challenges posed by both the draft version of Bill C-41 (which was subsequently amended) and the final version adopted, this alert is intended to provide charities and not-for-profits with a practical overview of the processes anticipated by Bill C-41.
To read the balance of this Bulletin, please see AML/ATF and Charity Law Alert No. 53.
Submission from Canadian Bar Association Proposes Improvements for Canada’s AML/ATF Regime
Several sections of the Canadian Bar Association (“CBA”), including the Charities and Not-for-Profit Law section, have prepared a submission in response to the Government of Canada’s consultation regarding some of the measures introduced in the 2023 Federal Budget. Specifically, one of the focusses of the consultation was on how to improve Canada’s Anti-Money Laundering and Anti-Terrorist Financing (“AML/ATF”) regime (the consultation is described in greater detail in the June 2023 Charity & NFP Law Update).
In its August 2023 submission, the CBA addressed several questions, including: “How could the government improve outreach and engagement with the non-profit sector on AML/ATF matters?”. The CBA’s response to this question highlighted that Canada’s National Assessment of Inherent Risks of Money Laundering and Terrorist Financing in Canada last updated in March 2023) “focus[ses] excessively on organizations connected to racialized communities, such as the Muslim community.” As a result, a disproportionate number of Muslim charities have been audited and had their charitable status revoked. Additionally, the CBA response highlighted the need for productive engagement between the CRA and the charitable and not-for-profit sector, as well as the need for legislation to go further to allow for charities and not-for-profits to operate effectively without running afoul of Canada’s “overreaching AML/ATF legislation.”
Regulations under the United Nations Act Amended to Allow Humanitarian Aid to Afghanistan
Recent regulations have resulted in amended regulations under the United Nations Act which previously prevented Canadian charities, NGOs and other organizations from providing humanitarian aid in Afghanistan. Regulations Amending Certain Regulations Made Under the United Nations Act: SOR/2023-134 (the “Amending Regulation”) was registered on June 19, 2023 and amends Regulations Implementing the United Nations Resolutions on Taliban, ISIL (Da’esh) and Al-Qaida: SOR/99-444 (the “UN Regulation”).
Section 2 of the UN Regulation, among other things, prohibits any person in Canada or any Canadian outside of Canada from making available any property to a person associated with the Taliban or for the benefit of a person associated with the Taliban, ISIL (Da’esh) or Al-Qaida. However, the Amending Regulation has added a new section 2.1 to the UN Regulation with two exceptions stating when the prohibitions listed in Section 2 will not apply:
- Humanitarian Assistance in Afghanistan – Section 2 does not prohibit the provision of funds or goods and services that are necessary to ensure the timely delivery of humanitarian assistance or that are in support of basic human needs in Afghanistan if the provider of such funds, goods or services is one of the following types of entities:
a. the United Nations (and its programs, other entities and related organizations);
b. international organizations;
c. humanitarian organizations with observer status from the UN General Assembly and their members;
d. bilaterally or multilaterally funded NGOs that are participating in any UN humanitarian response plan, refugee response plan, or other UN appeals for assistance or in groups of humanitarian organizations coordinated by the UN Office for the Coordination of Humanitarian Affairs (including implementing partners of those NGOs among others);
e. any other person authorized for this purpose by a UN committee established by the Security Council; or
f. any other international organization that provides humanitarian assistance or supports basic human needs in Afghanistan that is recognized by Canada.
2.Humanitarian Assistance in Other States – Section 2 does not prohibit the provision of funds or goods and services that are necessary to ensure the timely delivery of humanitarian assistance or that are in support of basic human needs in foreign states other than Afghanistan if the provider of such funds, goods or services is one of the following types of entities:
- the United Nations (and its programs, other entities and related organizations);
- international organizations;
- humanitarian organizations with observer status from the UN General Assembly and their members;
- bilaterally or multilaterally funded NGOs that are participating in any UN humanitarian response plan, refugee response plan, or other UN appeals for assistance or in groups of humanitarian organizations coordinated by the UN Office for the Coordination of Humanitarian Affairs (including implementing partners of those NGOs among others); or
- any other person authorized for this purpose by a UN committee established by the Security Council.
Notably, the second exception may cease to have effect regarding the provision of funds, goods or services to a person associated with ISIL (Da’esh) or Al-Qaida on the later of the following two dates:
- December 9, 2024, or
- the day that paragraph 1 of Resolution 2664 (2022) (adopted by the UN Security Council) or any replacement provisions cease to have effect.