Controversy surrounding Muslim Aid has centered mainly on allegations of its role in the financing of terrorist or extremist organizations. In 2002, a Spanish police report alleged the organisation to have used funds to send mujahadeen fighters to Bosnia. In 2010, the organisation was investigated by the
Charity Commission for England and Wales for allegedly funding groups linked to a banned terrorist organisation. The investigation cleared the organisation and said that the claims were unsubstantiated.
The Sunday Telegraph criticised the outcome saying the Commission cleared the organization, "without examining any of the evidence presented," though the organisation has admitted funding two organisations linked to
Hamas and the
Palestinian Islamic Jihad, and alleging that Muslim Aid is "closely linked to the extremist Islamic Forum of Europe, which wants to create a sharia state in Europe." In 2003,
ABC News established a link between a Muslim Aid Australia and the Dewan Dakwah Islamiyah Indonesia (DDII) which is linked to the Islamist group
Jemaah Islamiyah. In 2008, their offices in
Lakemba were raided by the police over allegations that funds were being sent through
Interpal to help get money into Gaza during Israeli border closures. In 2008, the organisation was banned in
Israel, due to its alleged ties to the
Union of Good. A 2009 report by the US-based think-tank
Nine Eleven Finding Answers Foundation, also alleged the charity was part of the
Union of Good. In 2009, despite being dogged by allegations of foreign intelligence links and terrorist support throughout the Muslim world, Muslim Aid Pakistan, with full support of Muslim Aid UK figures appointed a former director of the
Inter-Services Intelligence (ISI), Khaled Latif Mughal as its country chairman. Mughal was responsible for the Afghan and Kashmir areas of Pakistan's primary intelligence agency during the 1990s. After the Mumbai terrorist attacks of 2008, Mughal claimed the terrorist acts were a conspiracy by the United States, Israel and India to cripple Pakistan and steal its nuclear arsenal. In April 2013, three men were convicted of planning terrorist attacks in UK. They raised funds by criminally posing as Muslim Aid workers; the matter was pursued by the police and prosecutions were made. A small amount of funds was recovered and passed onto the charity. On 2 May 2013, an international arrest warrant was issued for its long time
trustee Chowdhury Mueen-Uddin for war crimes. He was subsequently found guilty
in absentia of murdering 18
Bangladesh intellectuals as a leader within
Al-Badr, a far-right pro-Pakistan Islamist paramilitary force in the
Bangladesh liberation war. The government of
Bangladesh investigated the organisation for allegedly funding militants in the country. In December 2013, Mozammel Hossain, the head of the Rangpur branch of Muslim Aid, was arrested for financing "
subversive activities". In April 2014, Bangladeshi politician
Sayed Ashraful Islam of the Awami League Central Working Committee warned funds from the organisation were being used to spread "
religious fanaticism". Again in September 2014,
Major general Abdur Rashid said they funded extremism. In 2014, the Charity Commission for England and Wales announced it was part of a "statutory inquiry". According to the charity, the investigation was caused after they reported "non-compliance with some operational aspects in two field offices". The Statutory Inquiry report was published in November 2022 https://www.gov.uk/government/publications/charity-inquiry-muslim-aid. The Commission concluded that the trustees had failed to fully comply with the 2018 Action Plan by the required two-year deadline, but acknowledged the significant progress made by the charity and its trustees to fully comply with the 2018 Action Plan. It concluded that the trustees co-operated, as they were expected to, in providing information and updates as required. A subsequent enquiry was opened in 2020 in order to escalate the Commission’s engagement with the trustees to ensure full compliance with the 2018 Action Plan to achieve the necessary changes and improvements to the charity’s governance and administration. The 2020 inquiry’s purpose was secured with the trustees’ completion of the 2022 Action Plan, following which the inquiry was closed in November 2022. In 2017, the
government of Bangladesh barred the organisation from aiding the
Rohingya people in
Cox's Bazar, alleging funds were used to preach Islam, construct mosques, encourage radicalism, and fund militants. == Responses to controversy ==