Report Examines Impact of FATF on Civil Society

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Date: 
May 23, 2017

Financial Action Task Force (FATF) Recommendation 8 and FATF recommendations following evaluations add to the restrictions faced by civil society organizations, according to a new report from Bread for the World, The Impact of International Counterterrorism on Civil Society Organisations: Understanding the Role of the Financial Action Task Force

Asserting that the links between measures that fight the financing of terrorism and civic space are not known widely, the report aims to "inform civil society organisations and non-profit organisations (NPOs), but also political decision makers who are not familiar with anti-terrorism measures." Specifically, it explains the role of FATF in setting international standards that affect the way in which civil society organisations are regulated by nation-states, their access to financial services, and their obligations to avoid proscribed organisations and other groups deemed to pose a terrorism risk. 

The report examines a variety of restrictive civil society laws and regulations from around the world and their relationship to FATF recommendations on the non-profit sectors. It illustrates how these recommendations have been used to impose restrictive legislation, presenting new evidence and case studies. It also examines the newer trend of de-risking, where non-profit organizations are increasingly facing difficulty with cross-border financial transactions, and banking services in general. 

Without fundamental reform to FATF's non-profit sector recommendations, the report states, the "proliferation and legitimisation of restrictive counterterrorism laws is likely to continue unabated." In addition, FATF is undermining international law by promoting laws that contravene states' human rights obligations, and a rights-based approach to financial services in which the onus is on regulators and financial institutions to service non-profits is the only way to overcome de-risking, the report explains. 

"In times when human rights and civic engagement are increasingly under pressure, international organisations have to ensure that their recommendations, evaluations and decisions have no negative impact on human rights or civic space," the report notes, adding, "They should not provide a justification for less democratic and repressive governments to introduce restrictive laws and regulatory environments for civil society organisations." 

Read the full report.