Following the Oxfam sex scandal, the European Union on February 12 warned charities they risk losing their funding if they do not meet ethical standards. Meanwhile, the British aid group’s deputy chief executive has resigned while taking “full responsibility” for the scandal.

Brussels has ordered Oxfam to explain its handling of a sexual misconduct scandal involving its staff paying prostitutes in Haiti after the devastating earthquake in 2010.

“We expect Oxfam to fully clarify the allegations with maximum transparency as a matter of urgency, and we’re ready to review and, if needed, cease funding to any partner who is not living up to the required high ethical standards,” European Commission spokeswoman Maja Kocijancic told reporters.

As reported by Deutsche Welle (DW), Germany’s international broadcaster, Oxfam, which received €1.7m in funding from the EU for work in Haiti in 2011, is being accused of covering up the episode and failing to warn other aid agencies about the employees involved, which allowed them to get jobs among vulnerable people in other disaster areas.

“Over the last few days we have become aware that concerns were raised about the behaviour of staff in Chad as well as Haiti that we failed to adequately act upon,” Oxfam Deputy Chief Executive Penny Lawrence said on February 12 after resigning from her position.

“It is now clear that these allegations—involving the use of prostitutes and which related to behaviour of both the country director and members of his team in Chad—were raised before he moved to Haiti,” she added.

According to AP, the British government has also threatened to cut off funding to Oxfam or any other aid agency that does not cooperate with the government’s efforts to rein in misconduct.