European Foundation Centre: Coalition partners challenge Financial Action Task Force

The EFC and its key partners in a global non-profit organization (NPO) coalition initiative have taken the lead to stop the disruption of legitimate activities undertaken by NPOs, which have been put at risk by counter-terrorism policy introduced by the Financial Action Task Force (FATF). 

Despite the lack of evidence to this effect, there are some government bodies, including FATF, which believe that NPOs including foundations are particularly vulnerable to terrorist abuse. At the start of this year, EFC, as part of the core group of the global 120+ NPO coalition on FATF, co-signed a letter to FATF, requesting that it stop targeting the NPO sector and revise Recommendation 8 in line with the FATF-endorsed risk-based approach. The co-signatories cover a wide range of non-profits including foundations, donor networks, service delivery organizations, and human rights and transparency organizations, based in both the ‘global north’ and the ‘global south’.

FATF’s language, in addition to its power to evaluate country implementation of its standards, has helped push overly restrictive regulations for non-profits around the globe and contributed to the growing problem of bank de-risking. FATF has already taken some positive steps to address these problems, as seen in its 2015 revision of the Best Practices Paper, which now includes specific revisions recommended by the global NPO coalition. It is now hoped that FATF will this year undertake a revision of Recommendation 8 and its interpretative note.

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