International Stakeholder Dialogue: Ensuring Financial Services for Non-Profit Organizations

International Stakeholder Dialogue: Ensuring Financial Services for Non-Profit Organizations

Non-profit organizations (NPOs) providing essential humanitarian and development assistance must be able to access financial services in order to carry out their activities, particularly in crisis situations and areas of conflict. Sometimes NPOs operate in high risk countries, subject to sanctions, or exposed to real and perceived terrorist financing (TF) or money laundering (ML) threats. In assessing the ML/TF/sanctions risks of their clients and related transactions, banks and other financial institutions must consider threats of criminal or terrorist activities that they are legally bound to assess and mitigate. Concerns regarding the risks associated with NPOs activities in high-risk areas, international sanctions and AML/CFT compliance requirements, and business considerations may result in refusal to on-board certain clients or to perform financial transactions, particularly international wire transfers. When legitimate parties are ‘derisked’, critical needs of refugees and others in dire need could be jeopardized. Food and medical aid are not delivered, humanitarian workers are left unpaid, and core foreign and international development policy objectives are undermined.

This particular International Stakeholder Dialogue, organized by the Dutch Ministry of Finance, the World Bank and Human Security Collective in The Hague, was an initiative bringing together public- and private-sector stakeholders – banks, humanitarian organizations, government policymakers and regulators, and international organizations – to examine what each can do to reverse this phenomenon. The objective was to identify causes, and, more importantly, to share experiences, actions and strategies to ensure that access to financial services is safeguarded for NPOs. Multi-stakeholder dialogue addressing financial access challenges have been underway in the United Kingdom, the Netherlands and the United States in the past year to discuss potential solutions. This event sought to amplify these efforts, foster greater understanding and collaborative relationships between stakeholders, and, hopefully, ensure that work toward concrete solutions continues.

The meeting included plenary sessions and interactive roundtable discussions preceded by brief presentations from different perspectives to raise relevant questions and offer suggestions on possible responses.  The sessions were on:

  • Research on the effects of sanctions, counter-terrorist financing, and anti-money-laundering measures on financial access for NPOs, and potential solutions
  • Compliance  and controls: What measures would be helpful to banks in meeting due diligence requirements and approving NPO transactions to high-risk locations or recipients? Do smaller NPOs face different challenges than larger NPOs, and if so, how can they be addressed and managed? What can NPOs do to help in the due diligence process? What measures could be beneficial in overcoming financial access challenges, e.g. training, guidance, technological innovations, information-sharing? What good practices can be identified and disseminated?
  • Assessing and managing risk: What impact has the revision of FATF Rec 8 had on banks’ risk assessments of NPOs? What can regulators and policymakers do to encourage a more risk-based approach by banks? How can risk be evaluated and mitigated in high-risk contexts by banks and NPOs? What measures might stakeholders take to promote humanitarian transfers into high risk jurisdictions?
  • Responses and solutions: How have stakeholders responded to financial access challenges? What preliminary lessons can be drawn from dialogues, and can or should these processes be replicated in other countries/regions? What measures can international organizations take? What actions can each stakeholder group undertake take to address these challenges?
  • Outcomes and next steps

Rapporteurs summarized the roundtable discussions to identify conclusions and concrete steps that can be taken in the short, medium and longer term.

See here for the detailed agenda and here for the background paper produced for the meeting.

We hope this multi-stakeholder meeting makes a tangible contribution to the global policy debate. A report of the meeting is forthcoming.

Working on Solutions to the Problem Nonprofits Face in Accessing Banking Services

The Global NPO Coalition on FATF hosted a webinar on working on solutions to the problem nonprofits with international activities face in accessing banking services. This follows on from two important studies that were presented in May.

The webinar featured:

  • Sue Eckert on the World Banks/ACAMS Multi-Stakeholder Dialogue on NPO Financial Access
  • Six members with updates from advocacy efforts in Europe, South America and North America
  • Jerry Brito, Director, Coin Center, on piloting use of cryptocurrency for grantmaking, humanitarian emergencies
  • Hanna Surmatz, European Foundation Centre, with an update from the recent FATF Plenary

For a recording of the webinar, see here and for the slides, here.

Workshops in Mali

Dec 8-9, Bamako, Mali: HSC together with the Alliance for Rebuilding Governance in Africa (ARGA) organized a two-day workshop in Bamako on ‘Youth Engagement in Promoting Governance and Countering Violent Extremism’. For details of the programme, see here.

Dec 11-14, Bamako, Mali: Training workshops on youth leadership related to P/CVE with HSC’s implementing partners PJC and REJEFPO. See here and here for details.

A charter of values on youth engagement for the promotion of governance and the prevention of violent extremism was also signed.

 

Soliciting Innovative Ideas on Building Social Cohesion

November 25th, Loosduinen, The Hague: People in the community came together to share innovative ideas on improving social cohesion and building community resilience in Loosduinen. The top 8 initiatives will win 1000 euros to implement the ideas presented. Watch the video of the meeting here. And to apply for funding to implement your idea for the neighbourhood, go here. The deadline for applications is Friday, 15 December 2017.

And for more on the project, see here.

Workshops and meetings in Mali

A second series of workshops/meetings took place in the middle of November in six communes in Bamako district, in collaboration with ARGA as well as the mayor of the communes.  These were on:

  • Governance leading to the Prevention and Countering of Violent Extremism
  • Multistakeholder Engagement in Governance leading to Peace Building
  • Lobby and Advocacy

 

 

 

 

 

 

 

A proposal for building a national strategic P/CVE action plan was also discussed.

A workshop on inter/intra religious dialogue with youth networks at the G5 Sahel country/level also took place between November 17 and  November 20, with the participation of the ministers of reconciliation and youth. Working groups of G5 youth networks defined action plans for themselves for the forthcoming years (2018-2020). For a news report on this, see here (in French) and here (in English).

 

 

 

 

 

 

 

 

 

For more on the project, go here.

The Impact of De-risking on Humanitarian Organizations – Shared Risk: Shared Responsibility

November 28th, London: The World Humanitarian Action Forum (WHAF) held a roundtable discussion on ‘The Impact of De-risking on Humanitarian Organizations – Shared Risk: Shared Responsibility’. The WHAF is a one-day event organised by several humanitarian organisations and aims to encourage dialogue and action through collaboration and partnership working. This roundtable – one of three – was led by the Humanitarian Policy Group at The Overseas Development Institute (ODI) and The London School of Economics, and supported by HSC along with Islamic Relief Worldwide, Al Rayan Bank, Human Appeal, Al Khair Foundation, Charity & Security Network, The Norwegian Refugee Council and Muslim Charities Forum.

The roundtable consisted of three 90-minute sessions, and explored:
Session 1: The Problem
The implications of de-risking on humanitarian response with illustrative examples from the countries addressed in the research.
Session 2: The Practice
How humanitarian organisations are adapting to de-risking and the alternative routes of transferring funds they resort to. Available recourse (if any) within the legal system for de-risked clients.
Session 3: The Policy
Policy changes needed to ensure financial access for humanitarian organisations without exacerbating vulnerability to a common terrorist threat

For a recording of the sessions, see here.

Journey to Extremism in Africa: UNDP Report

October 25th, Amsterdam: The UNDP Report Journey to Extremism in Africa was released in Amsterdam today.

Between 2011 and early 2016, 33.300 people in Africa lost their lives to violent extremism. Millions have seen their livelihoods affected through loss of a breadwinner. In order to build an evidence base for effective development measures against violent extremism, UNDP’s Regional Bureau for Africa interviewed an unprecedented number of former recruits about their motivations in joining groups such as Boko Haram, Al Shabaab and IS. 718 individuals from Kenya, Nigeria, Somalia, Sudan, Cameroon and Niger were interviewed, allowing UNDP to construct a roadmap of the journey to extremism.

UNDP presented its conclusions at the event – organized in cooperation with the Dutch Ministry of Foreign Affairs and Knowledge Platform Security & Rule of Law. UNDP’s Regional Programme Manager Mohamed Yaya discussed policy pathways with Security Policy Director Hester Somsen and Somali prevention expert Ilwad Elman. The discussion was facilitated by HSC’s Fulco van Deventer.

Civil Society Working Group on FATF – Indonesia

Bogor, Indonesia: A civil society working group on FATF has been set up in Indonesia after two days of workshops on FATF and the FATF evaluation process in Bogor. Twelve organizations have formed a core group and plan to reach out via their members/networks to civil society in at-risk areas. The structure is loose and based on common goals of:
1) engaging with the Indonesian Financial Intelligence Unit (FIU) ahead of the FATF onsite visit
2) developing the group as a hub/resource for civil society and issues of countering the financing of terrorism (CFT) and preventing violent extremism (PVE) that intersect with civil society freedoms.

More information to follow.

Workshops in Bamako, Mali: ARC project

A series of workshops with and for local partners took place on Sept 28, 29 and Oct 4, 5 in Bamako, Mali as part of the project ‘A Human Security Approach to Address the Root Causes of Conflict and Violence in Mali’.  The sessions focussed on:

  • P/CVE
  • Human Security
  • Youth Leadership
  • Engagement Strategies
  • Governance

For details, see here. For more on the project, go here.

Financial Inclusion for Freedom and Security

 

The Hague, October 2nd: To prevent conflict and sustain peace and democracy, civil society must be able to freely and independently organize itself and perform its duties. However, civil society space is being increasingly constrained not only directly, via crackdowns on civil society protests and organizing or the harassment, jailing or killing of activists, but also in the form of legislation and regulation for civil society organizations, via national and international security policies. An important challenge in this regard comes from countering the financing of terrorism (CFT) regulations, which inform international and national policies regulating civil society, and are a driving force in banks’ de-risking behaviour towards the sector.

This interactive event showcased new research on the topic of shrinking space for civil society, and more specifically on the negative impact of counter-terrorism financing regulations on civil society space. It highlighted how these measures have a disproportionate effect on vulnerable segments within civil society, such as women’s rights organizations.

 

 

 

More specifically, core objectives included:

– Increasing awareness of the importance of a holistic notion of what ‘shrinking space’ implies for different civil society actors;
– Sharing the latest international studies and providing groundbreaking case studies and new data on how CFT regulations interact with civil society’s freedom to organize and operate; its gendered impact, and how this in turn impacts on peace and human rights worldwide;
–  Providing insights into effective alliance building in the context of influencing multilateral processes around CFT (e.g., World Bank, FATF, CTITF and CTED); highlighting ongoing and new initiatives;
–  Providing action-oriented recommendations aimed at sustaining critical civil society space and financial inclusion.

Speakers included:
  • Jayne Huckerby, Clinical Professor of Law, Director International Human Rights Clinic, Duke University School of Law
  • Isabelle Geuskens, Executive Director, Women Peacemakers Program
  • Ben Hayes, Fellow, Transnational Institute
  • Kay Guinane, Director, Charity & Security Network
  • Sangeeta Goswami, Advocacy and Communications Officer, Human Security Collective
Resources:
  1. Tightening the Purse Strings: What Countering Terrorism Financing Costs Gender Equality and Security, by Women Peacemakers Program & Duke Law International Human Rights Clinic
  2. Financial Access for US Nonprofits by the Charity & Security Network
  3. On Shrinking Space: A Framing Paper by the Transnational Institute
  4. De-risking and non-profits: how do you solve a problem that no-one wants to take responsibility for? by Ben Hayes, Lia van Broekhoven and Vanja Skoric
This event was organized by Women Peacemakers Program (WPP), Duke International Human Rights Clinic (Duke IHRC), Human Security Collective (HSC), Charity & Security Network (C&SN) and Transnational Institute (TNI) in cooperation with the Knowledge Platform Security and Rule of Law.