2005 Annual and Charity Report

www.iwf.org.uk

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Design and print generously sponsored by LINX

Mission To work in partnership with internetservice providers, telecommunicationscompanies, mobile operators, softwareproviders, the police, the Governmentand the public to minimise theavailability of online illegal content,particularly child abuse images.

Vision Combating child abuse images online

Role To minimise the availability ofpotentially illegal internet contentspecifically:

• images of child abuse hostedanywhere in the world

• criminally obscene content hostedin the UK

• criminally racist content hosted inthe UK

www.iwf.org.ukHome Office Minister Paul Goggins speaking at the IWF’s ‘Wipe it out’ event

Mission,Vision,Role,Rem

it&Key

Information

"The UK has perhaps the world's best regime for tackling child pornography,the Internet Watch Foundation, and we continue to work closely with the

industry, law enforcement agencies and children's charities to seek ways ofprotecting children from abuse”

Tony BlairPrime Minister

Remit To foster trust and confidence in theinternet among current and future fixedand mobile internet users by:

1. Operating a hotline to enable thepublic to report instances of potentiallyillegal child abuse images hostedanywhere in the world, criminallyobscene content and criminally racistcontent hosted in the UK, for examplevia websites, newsgroups, mobileservices or other online services.

2. Promoting wider education andawareness of its functions and roleand those of other key players suchas government departments, lawenforcement and consumer bodies.

To assist service providers to combatthe abuse of their systems for thedissemination of criminal content by:

1. Operating a notice and take-downservice to alert hosting serviceproviders of criminal content foundon their servers.

2. Recommending that internet serviceproviders should not carry certainnewsgroups in accordance with policyguidelines adopted by the IWF Board.

3. Acting as a relevant authority inaccordance with the Memorandumof Understanding concerning Section46 of the Sexual Offences Act 2003.

To assist law enforcement in the fightagainst criminal content on the internetby:

1. Combating the dissemination on theinternet of potentially illegal content,that is, child abuse images, criminallyobscene and criminally racist content.

2. Passing details of reports relating topotential illegal child abuse imageshosted on servers outside the UK tothe relevant national hotline or Interpolvia the National Crime Squad.

3. Working closely with the police,lending our expertise to help tracethe individuals responsible for suchcriminal activity online.

www.iwf.org.uk

• 23,658 reports processed in total

• 6,128 reports made to law enforcement agencies

• Only 0.4% of potentially illegal child abuse contenthosted in the UK

• No instances of criminally obscene content hosted in the UK

• No instances of criminally racist content hosted in the UK

• 40% of potentially illegal child abuse content tracedto the US

• 28% of potentially illegal child abuse content tracedto Russia

• 17% of potentially illegal child abuse content tracedto Asian countries including Thailand, China, Japan andSouth Korea

• 13% of potentially illegal child abuse content tracedto Europe

• 156 intelligence reports relating to UK offenders werepassed to police

• 211 newsgroups are now listed as potentially illegalin the UK

• 226 notices were issued to internet service providers totake-down a further 12,777 images that were published innewsgroups not included in the 211 listed

• 47% of potentially illegal child abuse websites werecommercial Pay-Per-View

• 70% of all commercial Pay-Per-View websites appearto be hosted in either Russia or the US

• There has been a shift away from credit card transactionsto alternative electronic payment systems for child abusecontent sold on commercial websites

• Every report to our hotline processed within 24 hours

• We converted from not-for-profit company tocharitable status

• We collaborated with all the major search engine providersresulting in the publication of a good practice guide forsearch provider companies and internet users

Key Information

www.iwf.org.uk

Richard Allen MP talking to IWF Chair, Roger Darlington atthe IWF’s House of Commons exhibition

IWF staff with representatives from T-mobile at the IWF’sHouse of Commons exhibition

Roger Darlington, Chair, IWF and Brian White MP IWF Chair Roger Darlington presents ISPA Chair, Jessica Hendrie-Liaño with their award at the Achievementsand Champions reception

Reports

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Chairs’ ReportsAchievements – outgoing Chair

I have now completed my two terms,comprising a total of six years, as the firstindependent Chair of the IWF. Along the way,there have been some tough issues to resolveand some difficult situations to face, but theorganisation now has effective policies andsound governance structures and it is betterresourced and better managed than it hasever been. This last year has seen us seekand obtain charitable status which will provideus with a number of financial advantages.

So it has been an immensely enjoyable andrewarding experience and I thank all the Boardmembers, all the Funding Council membersand all the IWF staff with whom I have served

over this period for their commitment to andsupport of the organisation. Together we haveproved that self-regulation of the internet canwork, we have provided a safer environmentfor web users, and above all we have reducedthe availability of child abuse images online.

The challenge for the future is to bring thatsame commitment and that sameeffectiveness to other countries where childabuse images are hosted, notably Russia andthe United States where the majority of suchmaterial is to be found. I am sure that this willbe a priority for the organisation over the nextyear or two, as we explain to other nations theprocedures we have worked out with our

partners in industry and seek the co-operationof international partners to cut substantiallythe availability of child abuse materialwherever it is hosted.

I am pleased that 2005 was such a successfor the IWF both operationally and financiallyand feel confident that the organisation willcontinue to enhance its effectiveness andreputation in the years ahead. I am delightedthat the Board has chosen someone of thecalibre of Amanda Jordan to succeed me asChair and I wish her every success in the post.

Roger DarlingtonChair 2000-2005

Looking Forward – incoming Chair

I am very pleased to have been appointedto take over the Chair’s position from RogerDarlington. I wish to associate myself withthe comments of others in acknowledging thesignificant contribution he has made in leadingthe organisation over six years.

The IWF will continue to face challenges in thefuture. The pace of change and technologicaladvancement will continue and for the most

part the provision of services that will helpand assist internet users to enjoy their onlineexperience will constantly evolve. However, inpartnership with the innovators, commercialenterprises, governments, police and all otherresponsible bodies, the test as always will beto ensure that innovation is not stifled or spoiltby those who engage in illegal activities to thedetriment of the majority.

I look forward to playing my part indeveloping the self-regulatory partnershipmodel that has been so successfully createdas the online environment thrives.

Amanda Jordan OBEChair – Current

“The Internet Watch Foundation is a hugely successful exampleof self-regulation in action. There is a determination amongst itsmembers, law enforcement agencies and Government toeradicate child abuse images in the UK and I pay tribute toRoger Darlington as he stands down after six years for hiscontribution and vision in progressing that partnership. I lookforward to working with Amanda Jordan in the years to come aswe continue our work in protecting children.”

Paul Goggins MP Under Secretary of State at the Home Office

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Peter Robbins, CEO, IWF speaking at the IWF ‘Wipe it out’ event

Richard Allen MP, Roger Darlington, Chair, IWF and Peter Robbins, CEO, IWF

IWF CEO, Peter Robbins and Home Office Minister, Paul Goggins

Achievements

So it’s time to say ‘farewell’ to our ChairRoger Darlington after six very successfulyears at the helm. It is my privilege to publiclythank him on behalf of all our supporters forhis dedication and commitment. Thepartnership that exists between all ourstakeholders, across the internet and mobileindustries, financial sector, the Government,police, the European Union and many othersis seen as an exceedingly successful model of co-operation and one to which other countriesaspire. It is a tribute to his leadership. Wewish him well in his future endeavours.

For the last two years child abuse contenttraced to servers hosted in the UK hasbeen less than 1%. We are pleased toannounce that this year only 0.4% of thechild abuse content complained of was hostedin the UK. On those rare occasions when it ishosted in the UK, the internet service providersare swift to have the content removed andthe police are quick to have the publisherinvestigated. This outstanding situation hasnot happened by chance. It is entirely dueto the determination of all our stakeholdersto confront the issue and adopt policiesand practices to make the UK a hostileplace for anyone seeking to distribute orview such images.

Our core funders have now grown to over 60.Many who have the ability to block and filterwebsites deploy our comprehensive ChildAbuse Image (CAI) URL data. This has been asignificant development as over 99% of thechild abuse websites we identify are hostedabroad so any steps taken by UK companiesto prevent their customers from beinginadvertently exposed to such imageswherever they originate in the world is tobe applauded. Such has been the level ofinterest in this initiative that we are nowfielding questions from internet serviceproviders, governments and police agenciesaround the globe.

Chief Executive’s Report

There is no doubt that the pace of changein the technological environment in whichwe operate will continue to provide us withenormous challenges. Methods used tohost and distribute child abuse contentare constantly shifting so the sharing ofknowledge, expertise and good practicemeasures between all our partners isessential if this problem is to be defeated.

We intend to develop further measures toenhance our response to the intense publicinterest in what we do, including the provisionof an appropriate response to the needs ofdiverse stakeholders at home and abroad.We aim to increase our membership and

supporters to prove to the world that ourpartnership model is worth emulating.

We look forward to working with the staffat the soon to be created Child Exploitationand Online Protection Centre. This centrewill concentrate on dealing with victims andsuspected offenders who exploit children.We will continue to carry out our functionof assessing content that is mostly traced tocountries abroad and therefore outside thejurisdiction of UK law enforcement agenciesand liaising with hotlines around the worldto have child abuse images removed fromthe internet.

I started by saying goodbye to our outgoingChair and I will close by welcoming AmandaJordan OBE as our new Chair. In this fastmoving technological age we are delightedAmanda is joining us as we rise to the newchallenges ahead of us.

Peter Robbins QPMChief Executive

Looking Forward

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Significant TrendsPotentially illegal content hosted in the UKremains low with only 0.4% of child abusecontent traced to the UK, and no instancesof criminally obscene or criminally racistcontent traced to the UK.

Number of reports received Proportion of reports where illegal content was found Reports by category

Child abuse images Adult obscene content

2000 2001 2002 2003 2004 2005

“When we receive an IWF report via Interpol, of a suspect illegalwebsite, action is taken. It is only through such international co-operation that child abuse images on the internet can be tackled”

Bogdan Udrea Principal Inspector Romanian General Directorate of Countering Organised Crime Cybercrime Division

2003 2004 2005

Racial abuse Others

20052005

Total number of reports processedNumber of reports where illegal content was found

SignificantTrends

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We trace potentially illegal content to the countrywhere the internet service provider hosting orproviding internet services for the content appearsto be located.

Offenders are making greater use of messageboards to share child abuse images. In general,the main discussion boards are devoid of imagesbut they are used to advertise the whereaboutsof available images for sharing. The images aregenerally posted on free hosting services or othermessage boards in Asia (including Japan, SouthKorea, Thailand, China and others).

Some free hosts especially in Europe are beingused by Pay-Per-View sites to promote their website and thus distancing the original site from theadvertisement. Access to the main site is onlyavailable once a user has subscribed.

Potentially illegal content by country Commercial child abuse content by country Free-To-View potentially illegal content by country

Commercial or Pay-Per-View websites accounted for47% of potentially illegal sites reported to the IWF.

Where payment is required to gain access to childabuse content we have seen a shift away from creditcard transactions to alternative electronic paymentsystems. One system in particular apparently affordsthe subscriber anonymity.

Several Pay-Per-View sites which contain potentiallyillegal images continue to be available as theyregularly move internet service provider to avoiddetection and possible legal action. For example, aspecific site was first noticed and reported to policein October 1999. Since that date IWF has made 22reports to international law enforcement agenciesregarding that site, yet the site continues to remainavailable as it constantly changes servers.

Non commercial or sharing sites accounted for53% of potentially illegal sites reported to the IWF.

USA 40%Russia 27.9%Europe 12.9%Japan 8.9%South Korea 5.5%

Other 2%China 1.2%Thailand 1.2%UK 0.4%

USA 36.4%Russia 34.9%Europe 14.5%

South Korea 7.8%Other 4.2%China/Hong Kong 2.2%

USA 43%Russia 22%Japan 15.8%

Other 10.8%Spain 4.8%South Korea 3.6%

Looking Forward

Achievements

www.iwf.org.uk

Hotline

United KingdomCombating potentially illegal internet contentthrough our Hotline operation is the core ofour service. 2005 has proven to be ourbusiest and most productive year yet.

Only 0.4% of the websites that were found tocontain potentially illegal content were hostedby UK providers and we are pleased to saythat in every instance the UK police andinternet providers reacted swiftly when weadvised them of a problem. The contentwas removed and the evidence preserved.

InternationalWe are a founding member of the InternetHotline Providers’ Association (INHOPE) thenetwork of European and internationalhotlines. Frank Glen, our Operations Manager,currently serves as their Vice-President.INHOPE now has a presence in 23 countries

around the globe. This progressive networkenables us to send information on childabuse websites to the country apparentlyhosting them at the speed of an email. Withpartner hotlines in countries as far off asSouth Korea and Australia we are part of apowerful network combating child abuseimages with a truly global reach. We referred3,450 reports to INHOPE partners in 2005.

Where child abuse images are hosted incountries that do not have an INHOPE hotline,we work with the National Crime Squad’s(NCS) Paedophile Online Investigation Team(POLIT) who pass our notifications to Interpolto be referred to law enforcement agencies inthe country that apparently hosts thepotentially illegal content.

The pace of innovation will inevitably leadus all to experience new online services.Unfortunately, where content can be sharedthere remains a significant risk that individualswho have a predisposition to viewing imagesof children being abused will also exploit newtechnology to their own ends. We continue towork with all our partners, keeping up-to-date with their new services andrecommending procedures, where applicable,to minimise any abuse of their networks.

Illegal websites changing locationWe constantly monitor known child abusewebsites to ensure the accuracy of our ChildAbuse Images (CAI) URL list that we provideto our members for blocking and filteringpurposes. This process provides us with anaudit trail of web sites that move fromcountry to country. This provides a richsource of information to our law enforcementpartners to enhance their effectiveness intackling criminals across the world.

Hotline

During 2005 the hotline was visited by officialdelegations from the Chinese and South AfricanGovernments to view our operations and learnfrom our success.

NewsgroupsIn 2005 we reviewed our newsgroup practicesand policies. This resulted in an additional 90newsgroups being identified as potentially illegalbecause their names constituted advertisementsfor child abuse images. As a consequence of thisincrease, coupled with newsgroups that fail ourregularity policy, the total number of newsgroupsconsidered to be potentially illegal, under UK law,is 211. In addition we issued take-down notices toUK news group providers of a further 12,777 illegalimages which had been posted in unrelated groups(groups not normally associated with illegalcontent). The introduction of a bespoke softwareapplication developed by Microsoft has greatlyenhanced our efficiency in this area.

PoliceFrom reports received, we passed intelligenceto the police regarding more than 150 UK citizenswho members of the public had alleged were ofconcern. Our information has accounted for 14arrests with one offender receiving four yearsimprisonment for grooming a child for sex andanother six years imprisonment for offering hisstep-daughter for sex. At present we are assistingin over 20 different police enquiries.

A word of thanksThe reason we can develop public tips intosuch productive and useful information is dueto the continued hard work, dedication andprofessionalism of our specially trained InternetContent Analysts who partner with police indeveloping skills and understanding of newtechnologies. Our Analysts deal with the mostabhorrent of internet content on a daily basis tohelp make the internet a safer place for all.

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Internet Protocol (IP) address registrationsEnsuring that IP registries contain correctinformation is vital for accurately locating websites that contain child abuse images and otherillegal content or activity. We wish to highlighttwo main issues:

• IP address hijacking • False registrant details

It should to be possible to stop IP address hijackingat a regional level. There is no reason for an IPaddress block that has been assigned to one RegionalInternet Registry (RIR), for example RIPE in Europe,to be re-registered under another RIR such as APNICin Asia and then routed through yet another.

False registrant details initially supplied to internetservice providers for registering within RIRdatabases are often difficult to spot as many ofthe contact details supplied are legitimateaddresses and phone numbers.

RIRs are responsible for the allocation of IP spaceat the top level therefore they should take stepsto stop the abuse of IP space where possible.

Further challenges lie in the areas of masking IProuting, encryption techniques and the continualattempts to hide the true location of child abusematerial on the internet.

We hope that we will be able to launch a projectin conjunction with our INHOPE partners to analyseall the websites considered to be potentially illegalaccording to the laws of the various countries.This data would assist in establishing the scaleand scope of potentially illegal child abuse websites.Information gleaned fromsuch a project wouldcertainly help Europeanand international lawenforcement agenciesconcentrate on theorganisations behindmany of the websitesthat cause concern.

www.iwf.org.uk

“I am pleased by the success of our ground-breaking alliance betweenbusiness, NGOs and Government – more specifically between the

Internet Watch Foundation, law enforcement authorities and internetcontent service sectors who have achieved more in a year without

legislation than we could have achieved in five years through legislationalone. This very successful model of partnership and self regulation has

achieved outstanding and continuing results in minimising the availabilityof child abuse images and criminally obscene and racist content

hosted in the UK”

Rt. Hon Alun Michael MPDepartment of Trade and Industry

Funding Council

Achievements

Looking Forward

The number of companies joining the FundingCouncil is evidence of the IWF’s strengtheningreputation. With increasingly diverse newmembers, knowledge of its work andachievements is clearly growing. Indeed, theIWF has attracted much international attention.

Consequently, it would seem opportune toreview the Funding Council’s governancearrangements to ensure the views andcontributions from all members are reflectedin assisting the IWF to move forward.

Funding Council members will continue to workclosely with the IWF’s hotline staff to ensurethey are updated on the complexities of newservices being delivered by member companiesand to take account of their views on how to

develop solutions to offset any abuses ofadvancing technological online services.

The IWF enjoys the universal support and trustof its stakeholders and is widely acknowledgedas the reference example of the self-regulatorymodel, where industry, government and lawenforcement work together in partnership toachieve their policy and corporate socialresponsibility objectives.

In a time of technological and legislativechange, it is hoped that the IWF will continue toserve as a shining example of the most effectiveway to regulate the internet.

Simon PersoffChair of Funding Council, IWFDirector of Regulatory Affairs, Wanadoo

The Funding Council is the forum where theIWF’s funding members meet to discuss IWFaffairs. The Funding Council is made up ofrepresentatives from each of over 60 membercompanies, with its own constitution and termsof membership.

The Funding Council’s role is to consider policyissues affecting the IWF; advise and vote onthe IWF’s role and remit; provide funds andensure the renewal of funds for the IWF’soperation; advise on and approve the annualbudget; elect three of its members to the IWFBoard and advise on and approve the members’Code of Practice.

During 2005, the Funding Council met onfive occasions. In June I was elected its Chair,taking over from Nick Truman (Head of InternetSecurity, BT Retail) who had held the post sinceOctober 2002. I would like to thank Nick forhis hard work and I look forward to hiscontinued valuable contribution to the FundingCouncil in the future.

Funding Council members made a significantcontribution in important discussions anddecisions, such as the IWF’s transition toregistered charity status, commenting onthe IWF’s 100 point three year business plan,considering its new communications strategy

and contributing to its proposals for a politicalaffairs strategy. Funding Council also assistedin a review of the IWF’s newsgroup policies.

A working group considered how the IWF’sChild Abuse Image (CAI) database could bemade more widely available in order togive further protection to consumers fromexposure to online illegal child abuse content.

Another working group considered theprocedure for appointing Roger Darlington’ssuccessor and a Funding Council member whois also a Board member chaired the successfulselection and appointment process of the newBoard Chair.

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FundingCouncil

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Inte

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The UK is leading the way with a voluntary approach to protectingUK internet consumers. Many of our ISP members have adoptedspecific technologies and strategies to deploy filtering systems toblock potentially illegal child abuse websites from data provided byus to protect UK consumers from inadvertent exposure to childabuse images.

In 2005 we significantly developed our outreach programme so ourstaff can meet their opposite numbers in member organisationsto ensure our work and core messages are more widely understood.We have also enhanced our briefing sessions for all visitors to ourpremises, whether they are connected with member companies orother interested parties. During our meetings with internet serviceproviders (ISPs) and various briefing sessions we demonstrate thecomplexities of the work and operations we undertake in the contextof the global nature of the internet.

The practice of notice and take-down is still unused or unknown inmany countries but such is the success of the UK in this regard thatwe are regularly asked to explain and share good practice on this topicwith foreign visitors.

Many of our ISP members attended our ‘Achievements and Champions’awards ceremony kindly hosted by former MP Richard Allen. We werepleased to have a host of illustrious speakers at the event to honourour founding members, namely Peter Dawe OBE, the Internet ServiceProvider Association (ISPA) and the London Internet Exchange (LINX).

Internet service provider members werealso invited to a number of parliamentaryfunctions during the year including a dinnerhosted by the former Department of Tradeand Industry minister Mike O’Brien MPand a reception with Home Office ministerPaul Goggins MP.

The roll out of new technologies brings with it increasedbroadband speed and greater online storage facilities.These services will allow the sharing of high quality video,which may in turn lead to different types of potentiallyillegal content being shared. The larger storage servicesprovided by our members will also allow the public to storemore and more files on remote storage systems ratherthan their own and these files may contain illegal content.

As criminals use more and more sophisticated techniquesto avoid detection, we will continue to work with all ourstakeholders to reduce the availability of potentiallyillegal content.

More than a third of homes are nowinternet enabled with additional access toother internet devices commonly availablein many households, for example, mobilephones. There has never been a moreimportant time to deliver awarenessraising campaigns. These must target thepublic as well as opinion formers, lettingthem know about our role and remit andhow consumers can protect themselvesfrom unwanted and illegal content. Withthe generous support of our membercompanies we will continue to highlightthe positive relationship we have with allour members.

Looking ForwardAchievements

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Internet Service Providers

“The UK is leading the way with a voluntary approachto protecting UK internet consumers”

£20,000 +

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Mob

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“Over 60 million mobile phones arein use in the UK”

Looking ForwardAchievements

The mobile operators and handsetmanufactures, O2, Orange, T-Mobile,Virgin Mobile, Vodafone, 3, Samsungand Nokia have continued to give theirwhole-hearted support to us in a yearwhich has seen continued developmentand growth in the mobile market. Over60 million mobile phones are in use inthe UK, with approximately 15% ofconsumers owning more than onedevice. Customers send 2.4 billion textmessages per month and arenow recording 1.8 billion WAP pageimpressions (surfing for informationor some other interactive service usinga mobile browser).

The mobile operators work within aCode of Practice for the self-regulationof new forms of content on mobiles.The Code sets out operators’commitment to implement protectionmeasures, particularly for children,around commercial content,internet content, bulk content,malicious content and illegalcontent. The commitments havebeen met and the Code issuccessfully in operation.

Mobile

Under the Code, where access to the internet is available, mobile operators have tooffer parents some method of controlling their children’s access to inappropriateinternet content via their mobile phone. Mobile operators will continue to develop theirpartnership with the Internet Mobile Classification Board (IMCB) to ensure that contentdelivered over mobile networks meets the agreed standards.

Mobile operators are now working towards integrating our Child Abuse Image (CAI)URL database into their internet gateway. This means that internet sites listed on theCAI database will not be accessible from mobile devices.

Mobile operators will also continue to work with us to remove illegal images fromphoto galleries (a shared space made available to customers for posting pictures takenwith camera phones).

Whilst there has been little evidence yet of mobile phones being used to transmit illegalimages in the UK, it is nevertheless necessary to remain cautious. There is no room forcomplacency. Going forward, the IWF and the mobile industry will continue to work inpartnership with a view to maintaining a successful campaign against illegal content.

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Sear

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“All the main search providers arefunding members of ours”

Searching the internet for information via search engine technologyis now a regular practice for most internet users. As the range andsophistication of search provider services develop there is a crucialneed to remain vigilant in tackling areas of content criminality whichwould otherwise compromise any internet user’s experience. We arepleased to say that all the main search providers are IWF fundingmembers and that we enjoy a flourishing relationship with all of them.Together we share issues of common concern whilst adapting ourservices to reflect the changing nature of their needs.

In order to develop a good practice guide for search service providersand advice to the public on how to search safely, the Home Officebrought together the collective effort of the main search providersin the UK, other experts, and our Chief Executive as Chair. This is anoutstanding example of specialist internet companies volunteering towork together to improve the experience of children and other userswhen navigating the internet using search engine technology.

The purpose of this initiative was to create a guidance document thatcomprehensively explained the full range of search services currentlyavailable via the internet. The document provides a model of goodpractice for search providers across all platforms in the provision ofservices for customers in the UK with regard to consideration of theissues and importance of child safety.

Furthermore, it gives advice andinformation to help members of thepublic, especially parents, carers andthose responsible for children, on howto make good use of search engines toexplore the internet and how to reducethe risk of being exposed to unwantedand unsuitable results.

Our search provider members can haveaccess to our Child Abuse Images URLdatabase to block potentially illegal childabuse websites from appearing in their listsof search results.

Search providers have been encouraged tomake safety advice available for users whenthey are undertaking a search and adviseusers how to report unwanted andpotentially illegal search results.

It is important that search providers explainhow users can best adapt the searchprovider’s services to meet their needs andgive clear information on how to conduct amore accurate search. Offering some level offiltering on their search facility and advice onhow to use filters are important.

Search engines are constantly changing andevolving and both the search provider andthe user need to be aware and preparedto act where necessary to continue safe useof the internet.

Looking ForwardAchievements

Search Providers

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Filte

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“Enterprise level solutions haveresulted in end-users beingprotected without having toinitiate or purchase cover”

Achievements

The coming year will see even moreinternational filtering vendors wishing toutilise our services to block and or filterspam containing potentially illegal content.

The challenge remains one of differingnational legal systems and theimplementation of a UK oriented service.It is hoped that with the support of INHOPE,the Virtual Global Taskforce and nationalgovernments such challenges can beovercome.

In 2006, a ‘kite mark’ award system forfiltering services is likely to be introduced.This concept has been designed to ensurethat all services that have gained the awardwill provide a specific minimum level ofprotection for the user. We believe this willlead to a better understanding of what isavailable to UK internet users.

Filtering Suppliers

This year we have attracted the interest of even more national andinternational filtering companies and a number have joined as members.These have included the new breed of hardware filtering companies aswell as software companies. In turn, this has led to a greater adoption ofour Child Abuse Image (CAI) URL service by these companies, which hascontinued the trend to provide filtered internet services to the public andbusinesses so as to make the UK safer for all online users.

Our filtering members deliver a range of solutions which are being offeredacross the spectrum of users, from home and small businesses through tomulti-national corporations, education and public services.

A number of our internet service provider members have worked closelywith the filtering companies to provide enterprise level solutions that resultin end-users being protected without those users having to initiate orpurchase cover.

Some filtering companies are also seeking to use our services to aid in thereduction of spam content, specifically the spam which leads to illegal childabuse content. We are pleased to be part of this initiative and believe it tobe an important step in the reduction of this content online.

We now have a new policy regarding the CAI URL service which has allowedus to make the service available to non-members and overseas companiesfor the first time.

Looking Forward

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ISPAISPAS ASPAP

This section covers all our members that donot fall into specific sectors. They include ourtwo founding organisations, London InternetExchange (LINX) and the Internet ServiceProviders Association (ISPA), plus organisationssuch as hosting and connectivity companies,newsgroup suppliers, and blue-chip companies.All of these companies have joined us in orderto demonstrate support for our work and leadthe way in striving to make the internet a saferplace for all users.

This year we have seen a reduction in onlinecommunities that cater for potentially illegalchild abuse content. We believe this is due tothe increased moderation and vigilance of ourcontent service provider members to remove or

reduce opportunitiesfor anonymity and therealisation by criminalsthat participation in suchcommunities can leadto a police investigationand possibly a criminalconviction.

Additionally, through our newsgroup policiesand the membership of the IWF by two ofthe world’s largest newsgroup providers,well over half a million child abuse images,that would otherwise be available on eachof their services every year in the UK, havebeen stopped.

We welcome the membership of Nominet,the UK’s domain name provider as a newmember. This relationship will allow us to assistNominet in monitoring new registrations so thatsuspect UK domain names can be investigatedearly on in the registration procedure.

We have also welcomed a number of blue-chiporganisations as members this year. They havejoined because they believe in the work we doand because they wish to recognise this withintheir own corporate social responsibility policies.

This year we gained our first memberproviding photo-sharing as its primeservice. With the availability of cheaperhard drive systems, the provision ofsuch storage services has becomeattractive to businesses and newoperations have appeared offeringphoto storage, photo printing andphoto sharing.

However, although the vast majorityof users are using the services forlegitimate and legal reasons, therehave been cases of abuse, withpotentially illegal content being placedon the sites for sharing. We will workwith these organisations to combatany future problems in this area.

Similar abuse is taking place withinsome of our content service providermembers’ services. We are workingwith these companies to assist in theremoval of such content and todevelop new services and practiceswhich will reduce the incidence ofsuch abuse.

We will progress our relationship withNominet by working with them andother international domain registrationagencies to develop methods tocombat child abuse content beinghosted on domains with falseregistration details and other areasof concern relevant to the registrationbodies.

Looking ForwardAchievements

Diverse

“2005 has seen a reduction in online communitiesthat cater for illegal child abuse content”

www.iwf.org.uk

Spon

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Sponsorsand

Words

ofAppreciation

We must take this opportunity to thank the Association ofPayment Clearing Services (APACS) for their outstandinggenerosity in supporting our work over three years. Asa partnership approach involving the Police, APACS andourselves the problem of Pay-Per-View websites sellingchild abuse content around the world has been rigorouslyconfronted with the credit card companies taking a veryactive stance in disrupting the payment mechanisms towebsites offering such content.

We would also like to thank our other sponsors andsupporters who have contributed to our ongoing activitiesand the continued success of our work.

Support has come in many different ways from theprovision of hardware and software, through sponsorshipof campaigns or activities to substantial discounts whenpurchasing equipment, software or services.

We are aware that many ofthese organisations have aconsiderable number ofrequests each year forsupport and sponsorshipand we appreciate theirgenerosity and commitmentto our work.

Words of Appreciation“LINX, one of the world's largest ISP membership organisations,is proud to be a founding member of the IWF and to continueits support. The IWF demonstrates the industry's commitmentto the fight against the uniquely unacceptable presence of childabuse material online. As a result of concerted industry action,with the support of the IWF Hotline, we have almost eradicatedchild abuse material from hosting in the UK, with only 0.4% ofthis year’s reported material found here. That success is whywe are pleased that Hotlines based on the IWF model are nowblossoming in other countries.”

Malcolm Hutty Head of Public AffairsLINX, the London Internet Exchange

Sponsors of IWF's 2005 Annual and Charity Report

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Charity and Trustees’ Report

Reserves PolicyOur Board of Trustees have agreed to hold areserve of £300,000, equivalent to six monthsrunning costs. This reserve was based upon aninitial assessment of risk and liability and theTrustees will review this arrangement during2006. We operate a group reserves policy andallowing for trading conditions in 2005/6, wewill covenant up from IW Ltd. to IWF a sumsufficient to create the agreed level of reserve.

Investment PolicyThe level of reserve ensures IWF could continueduring a period of unforeseen difficulty and takesinto account the impact of IWF reducing orwinding up its operation. Therefore, the Boardof Trustees have agreed that the reserve shouldbe held in a readily realisable form in high interestbank accounts.

StatementThese are the summarised financial statements taken from the audited financial statements of the Internet Watch Foundation for the year ended 31st March 2005.The audited financial statements, which were signed on behalf of the Board of Trustees, were approved on 2nd December 2005 and have been submitted to theCharity Commission for England and Wales and to the Registrar of Companies.

These summarised financial statements may not contain sufficient information for a full understanding of the affairs of the Internet Watch Foundation. Copies ofthe full audited financial statements may be obtained on request from the Internet Watch Foundation.

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Risk ReviewRisk review is an integral part of the planning,budget, forecasting and management cycle ofIWF and takes into account:

• Income streams and expenditure varyingfrom forecast which is addressed throughthe reserves policy

• Staff welfare which has been addressedthrough the staff welfare policy

• Potential liabilities which have beenindemnified through appropriate insurances

• Information security where IWF is workingtowards achieving BS7799

• Property and assets where IWF has auditedprocedures in place

IWF will establish a procedure for periodicallyreporting risk analysis to the Board of Trustees.

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Chartered Accountants and Registered Auditor

Summarised Financial Statements forthe year ended 31st March 2005

The Internet Watch Foundation was incorporatedas a company limited by guarantee on 29th August1997 (Company Number 3426366) and charitablestatus was gained on 16th December 2004.

The Internet Watch Foundation is a registeredcharity, number 1112398.

During 2004/2005 the income consisted of £881,443comprising unrestricted funds and restricted fundsrepresenting sums donated for specific purposes(2003/2004 £700,336).

During 2004/2005 total expenditure on charitableobjects was £735,234 (2003/2004 £563,392).

Independent Auditor’s Report tothe Trustees

We have audited the financial statements ofInternet Watch Foundation for the year ended31st March 2005 which comprise the consolidatedStatement of Financial Activities, the Balance Sheetsand the related notes. These financial statementshave been prepared under the historical costconversation and the accounting policies set outtherein.

This report is made solely to the Charity’s members,as a body, in accordance with Section 235 of theCompanies Act 1985. Our audit work has beenundertaken for no purpose other than to draw tothe attention of the Charity’s members thosematters which we are required to include in anauditors’ report addressed to them. To the fullestextent permitted by law, we do not accept orassume responsibility to any party other than thecharity and the charity’s members as a body, forour audit work, for this report, or for the opinionswe have formed.

Respective Responsibilities of the Trustees and Auditors

The trustees’ (who are the directors of Internet Watch Foundation for the purposes of companylaw) responsibilities for preparing the Trustees’ Report and the financial statements inaccordance with applicable law and United Kingdom Accounting Standards are set out in theStatement of Trustees’ Responsibilities.

Our responsibility is to audit the financial statements in accordance with relevant legal andregulatory requirements and United Kingdom Auditing Standards.

We report to you our opinion as to whether the financial statements give a true and fair viewand are properly prepared in accordance with the Companies Act 1985. We also report to you if,in our opinion, the Trustees’ Report is not consistent with the financial statements, if the charityhas not kept proper accounting records, if we have not received all the information andexplanations we require for our audit, or if information specified by law regarding trustees’remuneration and transactions with the Charity is not disclosed.

We read other information contained in the Trustees’ Report, and consider whether it isconsistent with the audited financial statements. We consider the implications for our report ifwe become aware of any apparent misstatements or material inconsistencies with the financialstatements. Our responsibilities do not extend to any other information.

Basis of Opinion

We conducted our audit in accordance with United Kingdom Auditing Standards issued by theAuditing Practices Board. An audit includes examination, on a test basis, of evidence relevant tothe amounts and disclosures in the financial statements. It also includes an assessment of thesignificant estimates and judgements made by the trustees in the preparation of the financialstatements, and of whether the accounting policies are appropriate to the Charity’scircumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations whichwe considered necessary in order to provide us with sufficient evidence to give reasonableassurance that the financial statements are free from material misstatement, whether causedby fraud or other irregularity or error. In forming our opinion we also evaluated the overalladequacy of the presentation of the information in the financial statements.

Opinion

In our opinion the financial statements give a true and fair view of the state of affairs of thecharity and the group as at 31st March 2005 and of its incoming resources and application ofresources including the income and expenditure, of the group for the year then ended and havebeen properly prepared in accordance to the Companies Act 1985.

Peters Elworthy and MooreCambridge

Date: 13th January 2006

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All amounts relate to continuingactivities. There were no recognised

gains or losses other than thoseincluded above.

Internet Watch Foundation

Balance Sheet

31 March 2005

Consolidated Parent Charity2005 £ 2004 £ 2005 £ 2004 £

Fixed Assets

Tangible fixed assets 18,547 23,576 – –

Investment in trading subsidiary – – 2 2

18,547 23,576 2 2

Current Assets

Debtors 235,728 82,159 164,185 –

Cash at bank and in hand 338,931 255,949 – –

574,659 338,108 164,185 –

Creditors: amounts due within 260,380 172,023 1,252 2one year

Net current assets/(liabilities) 314,279 166,085 162,933 (2)

Total Assets Less Current Liabilities 332,826 189,661 162,935 –

Provision for Liabilities & ChargesDeferred taxation – 3,044 – –

Net Assets 332,826 186,617 162,935 –

Represented by:

FundsGeneral Fund 332,826 186,617 162,935 –

Total funds 332,826 186,617 162,935 –

On behalf of the Board

Roger DarlingtonChair IWF 2000-2005

Approved by the Board on 2nd December 2005

Internet Watch Foundation

Consolidated Statement of Financial Activities

Year ended 31 March 2005

2005 £ 2004 £

Incoming Resources

Activities to further the Charity’s objectsSubscription and grant income –

trading subsidiary 875,914 699,477

Investment income and interest – trading subsidiary 5,529 859

Total incoming resources 881,443 700,336

Resources expended

Charitable expenditureCosts of trading subsidiary 735,234 563,392

Total resources expended 735,234 563,392

Net incoming resources for the year 146,209 136,944

Fund balances brought forwardat 1 April 2004 186,617 49,673

Fund balances carried forwardat 31 March 2005 332,826 186,617

StructureThe Board consists of ten members includingan Independent Chair, six non-industry Boardmembers appointed by an open selectionprocess and three industry Board memberselected by the IWF Funding Council.

In appointing non-industry Board members,the selection process takes into account thebalance of skills and experience required andincludes members with expertise in childprotection and legal matters. Someone whohas a significant financial interest or otherdirect involvement in a company providinginternet services cannot be a non-industryBoard member.

IWF is an incorporated charity limited byguarantee and the IWF Board is the Boardof Trustees.

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Jim Reynolds

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Dr Ian Walden

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Amanda Jordan OBE

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“IWF Board members bring valuable skills and enormous experience to the organisation's policy-making processes and

each gives freely and generously of their time and talent. It has been a real pleasure to work with them and I thank them

for their effective and valued contribution.”

Roger DarlingtonChair, 2000–2005

IWF2005 � 1 IWF2005 � 2 IWF2005 � 3 IWF2005 � 4 IWF2005 � 5 IWF2005 � 6 IWF2005 � 7 IWF2005

Roger Darlington � 1 Prof Sonia Livingstone � 2 Mark Gracey � 3 Chris Atkinson � 4 Tink Palmer � 5 Nick Truman � 6 Hamish Macleod � 7 IWF2005

RoleUnder the leadership of theChair, the Board monitorsand reviews IWF’s remit,strategy, policy and budgetto enable the IWF toachieve its objectives.

TrusteesRoger DarlingtonIndependent Chair

Professor Sonia Livingstone Non-industry Vice-chair

Mark GraceyIndustry Vice-chair

Chris AtkinsonNon-industry

Tink PalmerNon-industry

Nick TrumanIndustry

Hamish MacleodIndustry

Dr. Michele ElliottNon-industry

Jim ReynoldsNon-industry

Dr Ian WaldenNon-industry

Amanda Jordan OBENew Independent Chair

BoardofTrustees

Board of Trustees

Internet Watch Foundation East View 5 Coles Lane Oakington Cambridge CB4 5BATelephone: +44 (0) 1223 237700 Facsimile: +44 (0) 1223 235921 Email: media@iwf.org.uk

www.iwf.org.uk