Two important events surrounding the Financial Action Task Force (FATF) are expected in the coming months, both with a big impact on nonprofit organizations (NPOs).

Following the June FATF Plenary in Australia, the NPO sector can now expect a revision of the Recommendation 8 Interpretative Note (IN). At the same time, the FATF will begin its periodic evaluation of the U.S. in late 2015. The results of that evaluation will likely shape U.S. counterterrorism laws and policies affecting NPOs going forward.

Several NPO umbrella groups, including European Center for Not-for-Profit Law (ECNL), European Foundation Centre (EFC), Human Security Collective (HSC) and US Charity Security Network (CSN), met with FATF members and the FATF secretariat in early September. During those meetings, FATF revealed that its plans to revise the IN, with the goal of making it consistent with its Best Practices Paper (BPP), which was updated in June to better reflect the risk-based approach. NPOs played a large part in the latest BPP revision and their concerns and comments were incorporated into the paper. The revision to the IN is significant because its contents are binding, while the BPP is merely guidance. Once the IN revision is complete, FATF will consider whether changes to Recommendation 8 itself are also needed.

Many laws restricting civil society space in many parts of the world can trace their origins to R8. Both the upcoming evaluation and the revision of the IN present important opportunities for the NPO sector to become involved to make ensure their voice is heard and that civil society space is protected.

At its June Plenary, FATF also committed to engage in a more formal dialogue with the NPO sector. Although the details of this engagement have not yet been hammered out, FATF’s statement will usher in a new phase of cooperation with the NPO sector.

According to the official FATF announcement:
FATF is committed to continuing a constructive engagement with NPOs on these important issues, and will continue doing so on an ad hoc basis, as needed, to facilitate its technical work. The FATF also agreed to enhance its engagement by holding an annual discussion with NPOs on specific issues of common interest.”

The NPO sector will need to coordinate with the FATF Secretariat to translate this statement into practice. It is crucial for FATF and the NPO sector to demonstrate that constructive consultation can work. In addition to annual consultation meetings, electronic/online consultations with the wider NPO sector with realistic deadlines for responding could be an option to ensure widespread NPO input.

Both the U.S. evaluation and the IN revision are approaching quickly. NPOs should seize the moment to become involved in these important processes. At the same time, although approval of a consultation with the NPO is not expected before June 2016, discussions are starting now. Because conversations will begin at the October 2015 FATF plenary, NPOs should submit initial suggestions on what needs to be changed in the IN, and make the case for a revision of Recommendation 8 itself, which singles out the NPO sector as being “particularly” vulnerable to abuse for the financing of terrorism. This broad-brush tarring of the entire sector is contrary to both the evidence and the new emphasis on a risk based approach.

The Global NPO Working Group on FATF, spearheaded by several NPOs, seeks to ensure that FATF’s countering the financing of terrorism measures do not disrupt legitimate NPO activities and that there is sustained dialogue between FATF and the NPO sector. The working group is drafting suggested changes for the IN, with work on R8 to follow.

For more information or to become involved, please contact Kay Guinane of the Charity & Security Network at [email protected].

For more information on FATF, please see the Global NPO Working Group on FATF’s website:

http://fatfplatform.org