FATF Best Practices Paper Revision is a Victory for NPO Sector

Date: 
July 2, 2015

The Financial Action Task Force’s (FATF) June 2015 update of its Best Practices Paper (BPP) incorporates almost all of the changes requested by the nonprofit organization (NPO) sector. With a new emphasis on a risk-based approach to counter-terrorism financing (CTF) regulation and specific mention of freedom of association, assembly and expression, NPOs are hailing this as long-awaited victory.

This latest BPP revision, which offers guidance on FATF Recommendation 8, on laws relating to NPOs, states at its outset that FATF recognizes “the vital importance of the NPO community in providing charitable services around the world, as well as  the difficulty of providing assistance to those in need, often in remote regions.” It also recognizes the efforts of NPOs to promote transparency in their work and “to prevent misuse of the sector by those wishing to support terrorist financing and terrorist organisations.” Read more

FATF: Regulations Should “Not Harm” the Work of Civil Society

Date: 
October 22, 2012

Regulations on countering terror finance should “not harm” the work of nonprofit groups, the Financial Action Task Force (FATF) said in an Oct. 19, 2012 statement.  The FATF, an intergovernmental policy making body that sets the money laundering / terrorist financing (ML/TF) standards in nearly 180 countries, concluded its October meeting by calling for continued “dialogue” with civil society on implementing its financial policy recommendations.  A February 2012 report from the Transnational Institute and Statewatch finds many of the legal and regulatory measures recommended by the FATF invite “excessive state regulation and surveillance, which restricts the activities and thus the operational and political space of civil society organizations.”

Global NPO Response to FATF’s Call for Comments on Best Practices Paper Revisions

Date: 
April 27, 2015

Seventy nonprofit organizations (NPOs) from 28 countries submitted joint comments April 24, 2015 on the draft Financial Action Task Force (FATF) Best Practices Paper (BPP). The comments stressed that the final Best Practices Paper should guide governments on how to take a risk-based and proportional approach to protecting NPOs from terrorist abuse. The Transnational Nonprofit Working Group on FATF (Working Group) hopes that a consultation process between FATF and the NPO sector can be formalized so that NPOs are not again put in the position of trying to comment in a short time frame on a draft that has not been made publicly available.  

Global NPO Response to FATF’s Call for Comments on Best Practices Paper Revisions

April 27, 2015

Seventy nonprofit organizations (NPOs) from 28 countries submitted joint comments April 24, 2015 on the draft Financial Action Task Force (FATF) Best Practices Paper (BPP). The comments stressed that the final Best Practices Paper should guide governments on how to take a risk-based and proportional approach to protecting NPOs from terrorist abuse.  The Working Group hopes that a consultation process between FATF and the NPO sector can be formalized so that NPOs are not again put in the position of trying to comment in a short time frame on a draft that has not been made publicly available.  Read more

FATF Releases Report on Terrorism Risks to Nonprofits

Date: 
July 17, 2014

A report on the risks non-profit organizations (NPOs) face from terrorist abuse was released in June 2014 by The Financial Action Task Force (FATF). The FATF, an inter-governmental body that makes recommendations for country level anti-terrorist financing policy, used over 100 case studies derived from governments and open sources to map vulnerabilities for terrorist abuse present in the NPO sector.

Counterterrorism Measures Drive Banks to "De-Risk"

July 17, 2014

An article in Foreign Affairs by former investment banker Tom Keatinge uncovers how counterterrorism regulations make banks more willing to close "risky" accounts, such as remittance services and some nonprofits. Since 9/11, efforts by the U.S. and the international community to stop the flow of money to terrorist groups has led to banks having "prime responsibility for securing the national and international financial borders."

The impact of this trend was most visible when Barclays UK closed the accounts of the Money Services Businesses (MSBs) used by many diaspora communities to send remittances. Barclays and other banks like HSBC and the Merchants Bank of California were concerned that stiff penalties (in the order of billions of dollars) could be imposed on them for failing to adequately ensure their accounts were not being used for terrorist financing purposes. Meanwhile, countries like Somalia, "which receives more money from remittances than it does development aid" were cut off from a vital resource. 

Ironically, as Keatinge points out, "restrictive regulations have simply pushed large pools of funds outside formal channels—encouraging criminals and terrorists to finance their activities in the shadows." 

More about the closure of MSBs can be found here. 

Input on Civil Society Engagement with Multilateral Institutions

June 25, 2014

Maina Kiai, UN Special Rapporteur on the rights to freedom of peaceful assembly and of association, is soliciting input for an upcoming report on civil society engagement with multilateral institutions. The report seeks to "assess the extent to which States facilitate or diminish civil society’s involvement" with multilaterals, such as the UN and the Financial Access Task Force, and will also "assess how policies and practices by multilateral organisations impact positively or negatively the ability of civil society organisations to exercise their freedom of association"

Civil society organizations are strongly encouraged to send in their experiences—positive and negative—working with multilateral institutions. A concept note and questionnaire provide background and specific questions to answer. All comments for the report can be sent to info@freeassembly.net.

FATF Releases Guidance for Complying with UN’s Targeted Sanctions Regime

Date: 
July 12, 2013

On June 28, 2013 the Financial Action Task Force (FATF) released an updated guidance for governments implementing financial sanctions in line with the United Nations Security Council resolutions relating to curtailing terrorist financing.  FATF’s Recommendation 6 calls on governments “to freeze, without delay, the funds or other assets” of entities designated by the UN Security Council under the al-Qaida/Taliban sanctions regime (Security Council Resolutions 1267/1989) and Security Council Resolution 1373. 

FATF Incorporates Nonprofits' Recommendations into Update of Best Practices Paper

July 6, 2013

The Financial Action Task Force (FATF) amended its Best Practices paper for governments to “combat the abuse of nonprofit organizations” (NPOs) by terrorists on June 25 that incorporates suggestions provided by a civil society working group. The document is a “limited update to reflect the…need to protect NPOs’ legitimate activities.”

The changes are a significant improvement over the previous document and will hopefully avoid the misuse or misinterpretation of FATF anti-terrorist financing standards that has contributed to unnecessary and harmful infringements on the rights of freedom of association and expression in some countries.

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