FATF is the Financial Action Task Force, an inter-governmental body established in Paris in 1989 by the Group of 7 (G7). It seeks to combat money laundering, terrorist financing and other threats to the international financial system. It is both a policy-making and enforcement body. In April 1990, the FATF set out 40 detailed Recommendations on ways to counter this threat. After 9/11, a further 8 Special Recommendations were added, after the FATF’s mandate was enlarged to include the fight against terrorist financing. In 2004, a 9th Recommendation was added.
Recommendation number 8 pertains specifically to non profit organisations. It states that:
Countries should review the adequacy of laws and regulations that relate to entities that can be abused for the financing of terrorism. Non-profit organisations are particularly vulnerable, and countries should ensure that they cannot be misused:
(a) by terrorist organisations posing as legitimate entities;
(b) to exploit legitimate entities as conduits for terrorist financing, including for the purpose of escaping asset-freezing measures; and
(c) to conceal or obscure the clandestine diversion of funds intended for legitimate purposes to terrorist organisations.
Civil Society concerns:
- Recommendation 8 sets out a broad requirement to regulate the non profit sector as a whole for greater transparency and accountability. This has had numerous unintended consequences for non profit organisations, not least the difficulties faced in accessing and distributing financial resources, cumbersome registering and licencing laws, and increased state surveillance and regulation.
- Recommendation 8 also infringes on basic human rights, namely the right to freedom of expression and association and the right to privacy.
- More generally, the FATF is not regulated by an international treaty or convention, yet its policy recommendations are globally enforeceable through national legislation. This gives it enormous power and sway over global financial surveillance and regulation. It also given rise to fears of ‘policy laundering’, i.e., of states introducing surveillance/privacy-invasive measures to suit their agendas under the guise of implementing FATF standards.
Human Security Collective is part of a transnational coalition of non profit organisations seeking to highlight, stem and reverse the unintended consequences of the FATF’s policies on civil society space. To find out more about the FATF and its impact on civil society, please visit the Human Security Collective’s dedicated platform on the subject at http://www.fatfplatform.org/