In the March 13 podcast segment of AML Now, a production of the Association of Certified Anti-Money Laundering Specialists (ACAMS) John Byrne,ACAMS advisory board member speaks with C&SN director Kay Guinane about the derisking challenges that nonprofit organizations are facing and how to best maintain a banking relationship in this risk environment.
While nonprofit organizations advocate for policy changes to address the global phenomenon of derisking, financial institutions are creating cutting-edge technologies to speed and improve their compliance with anti-money laundering regulations.
A new study from the Center for Global Development assesses six new technologies and their potential to solve the derisking problem. Fixing AML: Can Technology Help Address the De-Risking Dilemma? examines machine learning, biometrics, big data, know your customer (KYC) utilities, distributed ledger technology (DLT)/blockchain, and legal entity identifiers (LEI). Machine learning is a type of artificial intelligence that could cut down on false alerts and identify undetected illicit finance techniques. Biometrics are much more robust than passwords or tokens and generally easier to use. Big data refers to datasets that are high in volume, velocity and variety and their applications offer more scalable storage capacity and processing. They also allow different types of data to be stored in one place, so compliance staff spend less time gathering information from disparate sources. They can greatly expand the range and scope of information available for KYC and suspicious transaction investigations. (Read more)
As bank "derisking" persists, areas of dire humanitarian need around the globe are hardest hit. In the case of Yemen, individuals, nonprofit organizations (NPOs) and businesses alike have been adversely affected by this global trend.
A new study from the Humanitarian Policy Group at the Overseas Development Institute (ODI), Counterterrorism, de-risking and the humanitarian response in Yemen: a call for action, examines the impact of derisking on humanitarian organizations in Yemen, and the degree of financial access afforded these groups.In Yemen, bank derisking has prevented Yemeni non-governmental organizations (NGOs) from receiving much-needed funds for humanitarian assistance, especially following the onset of war in March 2015, the study found. Derisking is contributing to the war economy and corruption in the country.
Given the fact that Yemen represents on of the world's largest humanitarian crises, the study highlights the urgent need to address the adverse effects of derisking in the country.
The study makes four recommendations to alleviate this problem, including facilitating the flow of funds through a proportional approach to counter-terrorist financing (CFT), lifting the economic sanctions on Yemen, revitalizing Yemen's central bank, and revisiting American and European CFT policies.
The U.S. Treasury Department is soliciting input on continuing its suspicious activity (SARS) and currency transaction reporting (CTR) requirements without change for another three years.
In two Federal Register notices (83 FR 5829 and 83 FR 5828) February 9, the Financial Crimes Enforcement Network (FinCEN) published notices and requests for comment on these two regulatory programs under the Bank Secrecy Act (BSA).
The BSA authorizes the U.S. Treasury to require financial institutions to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, and regulatory matters, or in the conduct of intelligence or counter-intelligence activities to protect against international terrorism, and to implement counter-money laundering programs and compliance procedures. This authority is delegated to FinCEN. The information collected under these regulations assist federal, state and local law enforcement, as well as regulatory authorities, in the identification, investigation and prosecution of money laundering and other matters.
FinCEN plans to renew the existing regulations without change. However, organizations and individuals have the opportunity to comment on this plan by April 10, 2018. Instructions for submitting comments can be found at www.regulations.gov. For the SARS notice, refer to Docket Number FINCEN-2017-0011 and OMB Control Numbers 1506-0001 and 1506-0029. For the CTR notice, refer to Docket Number FINCEN-2017-0012 and OMB Control Number 1506-0004.
A new documentary on the impacts of derisking on nonprofit organizations (NPOs) features an interview with Charity & Security Network's Kay Guinane. Produced by Women Peacemakers Program, the 45-minute video, Hold Your Peace, also includes interviews with grassroots women's organizations in Lebanon, Tunisia, Jordan, as well as Transnational Institute's Ben Hayes and Duke University Law School's Jayne Huckerby.
The film outlines the history of the derisking problem from the nonprofit perspective, details the impact of the trend on NPOs, and gives a special focus to grassroots women's organizations.
On October 2, 2017, Charity & Security Network joined more than 60 members of civil society, government, intergovernmental organizations, academics and the financial sector in The Hague to discuss the impact of countering terrorism financing regulations on shrinking civil society space and to develop policy recommendations.
The meetings, cosponsored by C&SN, the Women Peacemakers Program, Duke Law International Human Rights Clinic, Human Security Collective and Transnational Institute, resulted in a new conference report, Financial Inclusion for Freedom and Security. The report identifies five core areas of impact, including reduced space for women's rights organizing; impacts on programs, partners and beneficiaries; financial exclusion; prohibitive costs of due diligence and other administrative burdens; and adaptive measures affecting the safety and security of women's rights organizing. The report also summarizes C&SN's February 2017 financial access report and the meeting's discussion around it.
The conference report sets out a series of recommendations, including, but not limited to creating long-term dialogue with the financial and government sectors, reasonable risk sharing, and donor investment in direct funding mechanisms.
Women peacebuilders from around the world have increasing voiced concern about the impact of the derisking phenomenon. To learn more, Women Peacemakers Program held a regional consultation in Lebanon in January 2017 that was attended by 12 civil society organizations focused on peacebuilding and women's rights.
The resulting consultation report, Women Peacebuilders from the MENA Region Discuss Shrinking Civil Society Space Due to Countering Terrorism Financing, provides brief background information on the issue of counter-terrorism financing, its impacts on women's civil society organizing the MENA region, and key recommendations formulated by the consultation's participants.
- Sue Eckert, World Banks/ACAMS Multi-Stakeholder Dialogue on NPO Financial Access
- Six members with updates from advocacy efforts in Europe, South America and North America
- Jerry Brito, Dir. Coin Center, on piloting use of cryptocurrency for grantmaking, humanitarian emergencies
- Hanna Surmatz, European Foundation Centre, with update from the recent FATF Plenary
* Please note: Because a technical glitch during the program booted the organizer out of the webinar program, the recording ends approximately 7 minutes before the end of the presentations. However, you can view all of the slides presented by clicking on the link above.
I’m a child of the 80s, and The Clash is still a vital part of my playlist. Recently, I had the opportunity to travel to London to speak about financial access for nonprofits, an issue near and dear to us at Charity & Security Network. The added bonus was that as I prepared my talk, scheduled meetings around the conference and made travel plans, The Clash’s music became my earworm.
The World Humanitarian Action Forum was convened by UK-based Humanitarian Forum -- a network of humanitarian and development organizations from Muslim donor and recipient countries, the West, and multilateral organizations – in collaboration with more than 30 organizations from around the world. I was part of the de-risking roundtable, one of three conference tracks, along with approximately 50 participants from the UK, Netherlands, Belgium, Turkey, Yemen and other countries, most of whom represented organizations impacted by de-risking.
Just three days before International Human Rights Day, Charity & Security Network joined CIVICUS Alliance, the International Center for Not-For-Profit Law ICNL) and a defendant in the J20 criminal trial stemming from the Inauguration Day protests to present testimony on restrictions of the freedoms of association and peaceful assembly in the U.S. before the InterAmerican Commission on Human Rights.
Charity & Security Network’s Andrea Hall presented data from the February 2017 report, Financial Access for U.S. Nonprofits, on the financial access difficulties that nonprofits are having in accessing banking services. Her testimony outlined how this problem, which includes account closures and wire transfer delays, severely impedes the organizations’ ability to carry out their programs. Access to funds is integral to the right to freely associate.
Bobbie Traut of CIVICUS led the panel and gave an overview of the problems with freedom of association and assembly in the U.S. today, highlighting data available in the CIVICUS Monitor. Charity & Security Network is a research partner on the Monitor.
Nick Robinson of ICNL discussed the serious threats to freedom of peaceful assembly that have passed or are pending in various state legislatures. He also explained that the militarization of local police has created a hostile and dangerous environment for protestors that includes kettling and the use of chemical agents without proper warning. That information is contained in ICNL's protest law tracker.
Elizabeth Lagesse is a defendant in what is known as the J20 criminal trial. She is also a plaintiff in a civil lawsuit against the Washington, D.C. metropolitan police concerning the same events. Lagesse is facing multiple criminal charges associated with the protest, including felony rioting, inciting a riot and conspiracy to riot, even though prosecutors have admitted in court that they have no evidence that she harmed any people or property. More than 230 protesters, journalists and legal observers were arrested. As prosecutors have aggressively pursued these charges, they have depicted political organizing as a political conspiracy, she said, and described the prosecution’s disruption to the lives of her and her co-defendants, each of whom face up to several decades in prison. She also noted the chilling impact of these cases on other protesters.
The U.S. government was then given an opportunity to respond to the civil society panel’s presentation. They used this time to present a history lesson on freedom of speech in the United States. Following their remarks, the IACHR commissioners publicly scolded the U.S. government representatives for making “no reference to what is happening” in their remarks, and noting their serious concern with the problems outlined by civil society. The only way things can change is by admitting there has been a regression, … and that the regression is caused by the highest levels of power in the U.S. government,” said IAHCR chairwoman Margarette May Macaulay. She added that the situation with the J20 defendants is “unacceptable” and that she expected the U.S. government’s answer to focus on that. Finally, she noted that given the current state of civil liberties in the U.S., the country’s founders must be “turning in their graves.”