UN Counterterrorism Committee Says Anti-Terrorist Finance Rules Should Not Harm Nonprofits

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Date: 
November 29, 2012

Efforts to combat anti-terror finance should not interfere with the ability of civil society organizations to meet their obligations, according to a statement issued at the conclusion of the Nov. 20, 2012 meeting of the United Nations’ CounterTerrorism Committee (CTC) on preventing terrorist financing. It also noted that increased engagement and input from the non-profit sector are essential in establishing a successful anti-terror finance framework.  The statement is similar to one the Financial Action Task Force (FATF) made at its October meeting in Paris.  Held at UN Headquarters in New York, talks at the meeting centered on current trends and challenges in countering terrorist financing and to discuss the revised standards used by the FATF.   The CTC monitors each UN member’s compliance with the UN’s counterterrorism sanctions programs.

“Legitimate efforts to prevent abuse of the non-profit sector for terrorist financing purposes should not undermine the sector’s legitimate role and purpose.  Therefore, a balanced regulatory approach, including dialogue with the NPO sector, is key to an effective implementation of the relevant international framework,” the statement said from the chair of the CTC.

The FATF’s anti-terror finance standards, which have been criticized for being overly-broad in scope and abused by governments to suppress political opposition, were also discussed at the meeting.  In addition to praising the FATF’s October statement to “continue its dialogue with the private sector and civil society,” on anti-terror finance matters, E.J. Flynn from the UN Counter Terrorism Executive Directorate (CTED), voiced strong concerns about the impact of measures restricting the rights and freedoms of civil society, in particular, charitable organizations.  He said:

“Serious concerns relating to the regulation of non-profit organizations and NGOs have been raised in at least three respects. The first is that counter-financing laws can have a serious impact on the ability of humanitarian organizations to carry out their work in some areas facing crises such as famine and conflict. Well-established humanitarian principles state that this work must be carried out in conformity with the principles of neutrality, independence and impartiality, but these principles could be compromised by certain counter-financing requirements. There are concerns in some States that counter-financing measures could place legitimate humanitarian actors in danger of criminal prosecution under material support laws. Moreover, concerns have been raised over the extent of regulation placed on NGOs, and whether or not it is appropriate, or proportionate.”

Flynn concluded his remarks by saying he will continue to work with UN members, the FATF, and civil society on two complementary goals:

first, taking effective action to prevent and to punish the financing of acts of terrorism, and second, placing our responses to the threat of terrorism within a framework of respect for human rights, so as to ensure that our collective action against terrorism strengthens -- rather than weakens -- our simultaneous commitment to human rights and the rule of law.”

Another speaker, a representative from Pakistan, was also critical of FATF polices directed at the nonprofit sector, saying:

“[R]ecommendation 8 of FATF regarding the abuse of non-profit entities for the financing of terrorism might have some unintended consequences for charities around the world. In some cultures, it is a religious duty to pay a fixed amount of income to poor and it is usually done through charities. For example, in Islam zakat is obligatory for every Muslim who can afford to pay it. Developing States’ capacity needs to be enhanced so that they could introduce regulatory framework for it without undermining the legitimate role and the right to freedom of association of non-profit organizations.”

UN Secretary-General Ban Ki Moon opened the meeting by saying that anti-terrorist financing policies need to respect human rights and the rule of law. “This is necessary not only to preserve our moral authority,” he said, “but also to avoid fuelling grievances which terrorists exploit to justify their unjustifiable actions, to gain safe haven in different communities and to recruit new affiliates.