In the March 13 podcast segment of AML Now, a production of the Association of Certified Anti-Money Laundering Specialists (ACAMS) John Byrne,ACAMS advisory board member speaks with C&SN director Kay Guinane about the derisking challenges that nonprofit organizations are facing and how to best maintain a banking relationship in this risk environment.
For civil society, the past year has been "one of resolute resistance against the rising tide of restrictions on fundamental freedoms and democratic values," according to CIVICUS’ 2018 State of Civil Society Report. Sobering data from the CIVICUS Monitor reveals serious systemic problems with civic space in 109 out of 195 countries covered, it notes. At the same time, "there are also numerous examples of civil society successfully advocating for progressive new laws on women’s rights, access to information and protection of human rights defenders."
Findings from the report point to 10 key trends impacting civil society in 2017. There are increasing instances of personal rule by political leaders replacing the rule of law and undermining democratic institutions in many countries. Polarizing politics and unjust economic systems propelled by cronyism are dividing societies and reducing the international community’s ability to address key global challenges such as violent conflict, inequality and climate change. Read more.
While nonprofit organizations advocate for policy changes to address the global phenomenon of derisking, financial institutions are creating cutting-edge technologies to speed and improve their compliance with anti-money laundering regulations.
A new study from the Center for Global Development assesses six new technologies and their potential to solve the derisking problem. Fixing AML: Can Technology Help Address the De-Risking Dilemma? examines machine learning, biometrics, big data, know your customer (KYC) utilities, distributed ledger technology (DLT)/blockchain, and legal entity identifiers (LEI). Machine learning is a type of artificial intelligence that could cut down on false alerts and identify undetected illicit finance techniques. Biometrics are much more robust than passwords or tokens and generally easier to use. Big data refers to datasets that are high in volume, velocity and variety and their applications offer more scalable storage capacity and processing. They also allow different types of data to be stored in one place, so compliance staff spend less time gathering information from disparate sources. They can greatly expand the range and scope of information available for KYC and suspicious transaction investigations. (Read more)
As bank "derisking" persists, areas of dire humanitarian need around the globe are hardest hit. In the case of Yemen, individuals, nonprofit organizations (NPOs) and businesses alike have been adversely affected by this global trend.
A new study from the Humanitarian Policy Group at the Overseas Development Institute (ODI), Counterterrorism, de-risking and the humanitarian response in Yemen: a call for action, examines the impact of derisking on humanitarian organizations in Yemen, and the degree of financial access afforded these groups.In Yemen, bank derisking has prevented Yemeni non-governmental organizations (NGOs) from receiving much-needed funds for humanitarian assistance, especially following the onset of war in March 2015, the study found. Derisking is contributing to the war economy and corruption in the country.
Given the fact that Yemen represents on of the world's largest humanitarian crises, the study highlights the urgent need to address the adverse effects of derisking in the country.
The study makes four recommendations to alleviate this problem, including facilitating the flow of funds through a proportional approach to counter-terrorist financing (CFT), lifting the economic sanctions on Yemen, revitalizing Yemen's central bank, and revisiting American and European CFT policies.
A new report, The Muslim Humanitarian Sector: A Review for Policy Makers and NGO Practitioners, seeks to better understand the barriers to and opportunities for greater cooperation with the Muslim aid and development sector.
Researchers from the British Council and Georgia State University, working under the auspices of the EU Commission's Bridging Transatlantic Voices Initiative, convey insight gained on the history and fugure of engagement between Muslim groups and their counterparts in the mainstream international aid and development sector.
According to the report, a global concensus has emerged that faith-based organizations are in a special position to address "shared global challenges rooted in problems of political conflict, violence, and extremism." Coupled with this are long-standing gaps in communication, knowledge, and practice "between conventional actors and their lesser-known counterparts in Muslim majority contexts" that reduce the capacity for the "effective implementation of policy strategies addressing the nexus of aid, development, and security in the greater MENA region." The current conditions in the region, including political conflict, humanitarian need, and aid flows make this an even more pressing issue.
A new documentary on the impacts of derisking on nonprofit organizations (NPOs) features an interview with Charity & Security Network's Kay Guinane. Produced by Women Peacemakers Program, the 45-minute video, Hold Your Peace, also includes interviews with grassroots women's organizations in Lebanon, Tunisia, Jordan, as well as Transnational Institute's Ben Hayes and Duke University Law School's Jayne Huckerby.
The film outlines the history of the derisking problem from the nonprofit perspective, details the impact of the trend on NPOs, and gives a special focus to grassroots women's organizations.
On October 2, 2017, Charity & Security Network joined more than 60 members of civil society, government, intergovernmental organizations, academics and the financial sector in The Hague to discuss the impact of countering terrorism financing regulations on shrinking civil society space and to develop policy recommendations.
The meetings, cosponsored by C&SN, the Women Peacemakers Program, Duke Law International Human Rights Clinic, Human Security Collective and Transnational Institute, resulted in a new conference report, Financial Inclusion for Freedom and Security. The report identifies five core areas of impact, including reduced space for women's rights organizing; impacts on programs, partners and beneficiaries; financial exclusion; prohibitive costs of due diligence and other administrative burdens; and adaptive measures affecting the safety and security of women's rights organizing. The report also summarizes C&SN's February 2017 financial access report and the meeting's discussion around it.
The conference report sets out a series of recommendations, including, but not limited to creating long-term dialogue with the financial and government sectors, reasonable risk sharing, and donor investment in direct funding mechanisms.
Women peacebuilders from around the world have increasing voiced concern about the impact of the derisking phenomenon. To learn more, Women Peacemakers Program held a regional consultation in Lebanon in January 2017 that was attended by 12 civil society organizations focused on peacebuilding and women's rights.
The resulting consultation report, Women Peacebuilders from the MENA Region Discuss Shrinking Civil Society Space Due to Countering Terrorism Financing, provides brief background information on the issue of counter-terrorism financing, its impacts on women's civil society organizing the MENA region, and key recommendations formulated by the consultation's participants.
Nonprofit organizations (NPOs) in the United States are subject to a complex system of regulation and oversight that combines registration, reporting and monitoring at the federal, state and local levels. These regulatory regimes mostly revolve around raising, spending and accounting for funds, protecting the public from fraud, and encouraging charitable contributions. The First Amendment protections for freedom of association, assembly and expression guard against undue regulation of NPOs. In some cases, religious organizations are exempt from regulatory requirements to avoid entanglement of church and state.
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.