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, with 40 detailed Recommendations set out to counter this threat.
Recommendation 8 pertains specifically to non-profit organizations. The revised Recommendation states that:
Countries should review the adequacy of laws and regulations that relate to non-profit organisations which the country has identified as being vulnerable to terrorist financing abuse. Countries should apply focused and proportionate measures, in line with the risk-based approach, to such non-profit organisations to protect them from terrorist financing abuse, including:
(a) by terrorist organisations posing as legitimate entities;
(b) by exploiting legitimate entities as conduits for terrorist financing, including for the purpose of escaping asset-freezing measures; and
(c) by concealing or obscuring the clan
(International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation: The FATF Recommendations. Paris: FATF/OECD, 2012, Updated 2016, p.13.)
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 organizations, not least the difficulties faced in accessing and distributing financial resources, cumbersome registering and licensing 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 organizations from humanitarian, development, peacebuilding and human rights backgrounds, seeking to highlight, stem and reverse the unintended consequences of the FATF’s policies on civil society space. HSC has developed a direct engagement with the FATF Secretariat and its working groups on the perceived threats of terrorism financing within the non-profit sector. This engagement will lead to a practical understanding of the impact of anti-terrorism financing measures on the non-profit sector, as well as increased capacities of non-profits in tackling issues of corruption, fraud, terrorism and other unlawful use of funds.To find out more about the FATF and its impact on civil society, please visit the coalition’s dedicated platform on the subject at http://www.fatfplatform.org/. The Non Profit Platform on the FATF has been set up to ensure that civil society is effectively engaged in the debate on anti-money laundering and combatting terrorism financing. Our vision is to have a free and fully-enabled civil society operating space.
For more information, please contact Sangeeta Goswami at firstname.lastname@example.org