Financial Action Task Force (FATF) Overview

February 11, 2013

The Financial Action Task Force (FATF) is an intergovernmental policy-making body that sets anti-terrorist financing and anti-money laundering standards. These standards are used to assess the adequacy of laws and regulations in nearly every country in the world. Since 9/11, FATF has increased its focus on regulation of financial services and charities. In doing so, it created Recommendation 8 (R8) on laws relating to non-profit organizations. This measure has created negative consequences for charitable and development programs, and has impacted civil society operations and access to financial resources to support nonprofit work. Although FATF has taken positive steps since 2012 to prevent abuse or misapplication of its program, more needs to be done to ensure that anti-terrorist financing laws cut the flow of money to terrorists, not to civil society. CSOs must pay close attention to the workings of FATF to prevent new laws that impede their work. 

Fact Sheet - FATF: What Nonprofits Need to Know

 

Global NPO Coalition on FATF

Since 2012, the Transnational NPO Working Group on FATF has helped civil society raise its voicewith FATF at the national level. It has coordinated responses to draft revisions of FATF's Best Practices Paper and Typology Report, as well as working to develop a formal consultation process with FATF. More recently, it has worked for changes in R8 and its accompanying Interpretive Note (see p. 54). 

JOIN the Global NPO Coalition on FATF

The Global Coalition also facilitates the Civil Society-FATF Platform. This helpful resource contains news, background and other information about FATF to ensure that civil society is effectively engaged in the Working Group's activities. 

 

Featured Resources

Links to Key FATF Documents

Global Coalition Resources

 

See related issues: Anti-Terrorism Financing and Financial Access

 

Summary: Does the FATF Help or Hinder Financial Inclusion? A Study of FATF Mutual Evaluations

Date: 
June 10, 2019
Author: 
External Link: 

In Does the FATF Help or Hinder Financial Inclusion? Mike Pisa of the Center for Global Development examines whether the Financial Action Task Force’s (FATF) Risk Based Assessment (RBA) approach helps developing countries implement its anti-money laundering (AML) and countering the financing of terrorism (CFT) standards without increasing financial exclusion.

Abstract: Anti-Money Laundering and Countering the Financing of Terrorism

Date: 
March 12, 2019

In Untangling a Marriage of Convenience: Anti-Money Laundering and Countering the Financing of Terrorism, authors Tracey Durner and Danielle Cotter argue that, although anti-money laundering (AML) and countering the financing of terrorism (CFT) efforts have much in common, this melding places “undue burden on the private sector to understand the intent of criminals behind the actual transactions.” Some even contend that “misguided” CFT policies are leading to ineffective, and perhaps even harmful results.

Global NPO Coalition on FATF Presents: ABCs for Risk Assessment of the Nonprofit Sector in Your Country

Event Date: 
March 9, 2018

The Global NPO Coalition on FATF Presents: 

 

ABCs for Risk Assessment of the Nonprofit Sector in Your Country

 

Friday, March 9, 2018 

 

View the Recording

 

Ever since FATF revised its Recommendation 8 on nonprofit organizations in 2016, countries must conduct a terrorist financing risk assessment of the nonprofit sector. FATF requires government outreach to NPOs for these assessments, which are supposed to shape targeted, proportionate measures that only apply to NPOs at risk. 
How are governments and NPOs dealing with this process? How do risk assessments affect regulation of NPOs? How are they done? How can NPOs impact the process? 
Get answers from the experts:
*Ben Evans, Co-Founder and Senior Associate at the Greenacre Group, formerly with UK Charity Commission 
*Yann Desclercs, Managing Director, Cornerstone Advisory, formerly Chief of Compliance, Citi Bank West Africa 
*Andrew O'Brien, Dir. Policy and Engagement, Charity Finance Group (UK) 

 

Read the the Global NPO Coalition on FATF's handout: The ABCs for Risk Assessment of the Nonprofit Sector in Your Country

 

The Financial Action Task Force: What Nonprofits Need to Know

Date: 
May 27, 2015

Barriers to Cross-Border Nonprofit Operations and
The Role of the Financial Action Task Force

 

 

Nonprofit organizations – humanitarian, peacebuilding, grantmaking, human rights and more – struggle against daunting obstacles in conflict zones where need is great and risk is high.  Increasingly their work is undermined by counterterror bureaucracies that impose unnecessary restrictions on operations. Some restrictive laws are deliberate attempts to suppress political opposition and others are excessive restrictions that do not take into account the ways in which the work of nonprofits could promote greater human security.

 

FATF Adopts Guidance on Bank Customer Due Diligence

Date: 
November 20, 2017
Author: 
External Link: 

At its November 2017 plenary session the Financial Action Task Force (FATF) approved two documents relevant to nonprofit financial access concerns. First FATF adopted a customer due diligence supplement to its 2013 FATF Guidance Anti-Money Laundering and Terrorist Financing Measures and Financial Inclusion. These are combined in one document.  While focused on individuals/natural persons rather than nonprofit organizations (NPOs), the new guidance is relevant in that it demonstrates FATF’s commitment to financial inclusion and provides some indication of how the risk-based approach (RBA) can be applied to increase access to the regulated financial system. At some point in the future, a similar document focused on NPOs would be useful for all stakeholders. Second, FATF published a short statement supporting technical innovation in financial services that is consistent with its standards. 

Case Study: U.S. Nonprofit Organizations and the FATF Mutual Evaluation Process 2015-16

Date: 
November 20, 2017
Author: 
External Link: 

This case study of the Financial Action Task Force’s (FATF) evaluation of the United States, which took place in 2015-2016, reviews the experience of nonprofit organizations (NPOs) seeking to provide input to the evaluation team and makes recommendations to make the process for stakeholder input more transparent and streamlined.

Comments Submitted to FATF on Evaluation of US

Date: 
July 8, 2015

As part of its program to promote global implementation of its anti-terrorist financing and anti-money laundering recommendations, the Financial Action Task Force (FATF) will be conducting an evaluation of U.S. compliance in late 2015 and early 2016. FATF is expected to review the evaluators' report and make any recommendations in October 2016.

On July 6, 2015 the Charity & Security Network and the Council on Foundations submitted a detailed memo to the FATF Secretariat that provides the evaluation team with background information on U.S. counterterrorism laws, the impacts on nonprofit organizations (NPOs) and how this compares to FATF standards. It found that U.S. law fails to meet the FATF criteria of a risk-based approach, proportionality, protection of legitimate NPOs and consistency with human rights and humanitarian law. In a cover letter, the groups asked that the FATF evaluation team meet with representatives of the NPO sector as part of the evaluation process. The outcome of the report, and the recommendations, could provide an important opportunity for the U.S. to make its laws more civil-society friendly. 

Charity & Security Network Submits Comments on Saudi Arabia’s Treatment of NPOs for FATF Evaluation

Date: 
November 7, 2017
Author: 
External Link: 

The Financial Action Task Force’s (FATF) Recommendation 8 (R8) on Nonprofit Organizations (NPOs) is among 40 standards it uses to evaluate country anti-money laundering/counterterrorist financing programs. FATF is now conducting an evaluation of the Kingdom of Saudi Arabia, with a report due in the summer of 2018.  Under FATF procedures the June 2016 revised R8, which requires countries to apply a risk-based, proportionate approach to anti-terrorist financing regulation of NPOs, will be used to measure Saudi Arabia’s compliance. Because Saudi Arabia is a closed country where civil society rights are under harsh attack, it is not likely the R8 standard can be met. On October 31, 2017 the Charity & Security Network submitted comments to FATF, based on research of public records, that argue Saudi Arabia is using counterterrorism laws to target domestic dissent and “expressive organizations” in a manner inconsistent with FATF standards and the International Convention for the Suppression of the Financing of Terrorism. C&SN’s submission is available here. 

FATF Agrees to Formal Consultation Process

Date: 
June 29, 2015

The Financial Action Task Force (FATF) has said it will formalize its consultation process with the nonprofit organization (NPO) sector. At its June Plenary in Australia, FATF agreed to enhance its engagement with NPOs when workingon combating money laundering and terrorist financing by holding an annual discussion with NPOs on specific issues of common interest. It will also organize ad hoc exchanges on technical matters. 

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