FATF Updates Evaluation Criteria to Match Revised Recommendation 8

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Date: 
October 26, 2016

The Financial Action Task Force (FATF) made important changes to the criteria it will use to evaluate countries' implementation of Recommendation 8 (R8), its standard for government anti-terrorist financing regulation of nonprofits, at its October 2016 Plenary. The purpose of the changes is to make it consistent with the June 2016 revision of R8, which removed language that unduly characterized nonprofit organizations (NPOs) as being "particularly vulnerable" to terrorist financing abuse. The new methodology is found in Immediate Outcome 10 at pages 117-119 of FATF's Methodology handbook. It adds helpful new criteria to ensure countries take a risk-based, proportionate approach to any regulation of NPOs. It implicitly recognizes the chilling impact such regulations may have by adding that they should not "discourage legitimate NPO activities." The new methodology criteria will apply to future evaluations, implying that evaluations already underway will continue under the old Immediate Outcome 10. A comparison of the revised and old Immediate Outcome 10 is here.  

FATF's Plenary outcomes statement says:

"In June 2016 the FATF revised its Recommendation 8 to ensure that its implementation is in line with the risk-based approach and does not disrupt or discourage legitimate non-profit activities. The FATF has updated its assessment Methodology for Recommendation 8 and Immediate Outcome 10 to bring it into line with those revisions. Future assessment of members of the FATF and FATF-style Regional Bodes will be conducted on the basis of this revised Methodology. They will focus on the extent to which measures being applied to NPOs are focused and proportionate, in line with the risk-based approach, such that NPOs are protected from terrorist financing abuse and legitimate charitable activies are not disrupted or discouraged."

The revisions are found in Immediate Outcome 10 at 10.2, (a) 4, 10 and a new paragraph 11. 

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PDF icon Immediate Outcomr 10 Revisions.pdf805.37 KB