• Global update: G20
• Regional update: Latin America, Africa
• FATF Mutual Evaluation Update: Belgium, Sweden
• National: Pakistan, Kosovo, Indonesia, Moldova, Nigeria, Tunisia, Germany
As mentioned in the last edition of the newsletter, this FATF Report to the G20 Finance Ministers and Central Bank Governors on ongoing work to fight money laundering and terrorist financing includes tackling issues around financial inclusion and de-risking, calling for national regulators to reflect FATF guidance and for the G20 to clarify regulatory expectations. While the G20 has recognized the impact of de-risking on financial inclusion and is working with different bodies such as the Financial Action Task Force (FATF) and the Word Bank to address it and find solutions, its efforts do not consider the negative effect of de-risking on the financial inclusion of non-profit organizations (NPOs) and the people who benefit from or depend on the work of NPOs.
During the first half of the 2018, several coalition members (co-led by HSC, ECNL and ICNL) embarked on an initiative to raise the issue of financial access for NPOs at the G20 Summit, to be held in November 2018 in Buenos Aires, Argentina. The main aim of the initiative is to put the issue of NPO financial access on the G20 agenda, and get the G20 to task:
• the Global Partnership for Financial Inclusion (GPFI) to set up a sub group on financial access for NPOs (or amend the mandate of an existing group) and monitor the impact on NPOs;
• the FATF to address the issues specific to FATF-related processes, such as the risk assessment and evaluation of compliance, in line with the risk-based approach.
To this end, members of the Global NPO Coalition:
• have engaged with the C20 (the civil society engagement group of G20) – our asks on the issue have been included in the official C20 recommendations delivered to the G20;
• held awareness-raising workshops on de-risking and FATF issues at recent C20 meetings;
• are part of a panel discussing these issues at the G20 Interfaith Summit next month (September);
• continue to advocate for these issues with the FATF, with diplomatic missions, with the OECD, with G20 member countries, and others.
The Global NPO Coalition was invited to present to the Working Group on Terrorist Financing (GTFT) at the XXXVIIth GAFILAT (Financial Action Task Force of Latin America) plenary held between 23 and 27 July in Panama City, Panama. Presentations were made on the financial access problems facing NPOs as well as on NPOs and Risk Assessment.
In addition, a workshop was organized with civil society from across the region prior to the GAFILAT meeting, so as to garner their opinions prior to the meeting and feed this into the presentations made.
As a result of this, GAFILAT is open to further engagement, which will be followed up by our regional coalition members. Furthermore, coalition members from Argentina and Mexico have just been funded for a national/regional project working on a risk-assessment methodology, among other issues.
Workshops by Coalition partners for civil society organizations on FATF-related issues are planned (at a sub-regional level) for Uganda (October) and Gambia (November).
FATF Mutual Evaluation update:
Many positive re-ratings on Belgium’s follow-up report to the 2015 Mutual Evaluation, including on Recommendation 8 on non-profits (now Largely Compliant and not just Partially Compliant)
Some positive re-ratings on Sweden’s follow-up report after it was placed in the ‘enhanced follow-up’ track given its performance in the 2017 Mutual Evaluation process.
Coalition members co-convened, with local partners, a multi-stakeholder dialogue (civil society, government, CT authorities, multilateral organizations) on the impact on and implications for civil society of Pakistan’s FATF commitments. Pakistan was placed on the FATF ‘grey list’ in June 2018, being identified as one of the jurisdictions facing strategic AML/CFT deficiencies.
Members of the Global NPO Coalition took part in a workshop with Kosovar NPOs in June 2018 prior to the FATF Mutual Evaluation Report onsite visit, which assesses whether Kosovo has the necessary AML/CFT laws and regulations in place and whether these are effective. The workshop touched on how FATF Recommendation 8 affected civil society, what the FATF evaluation cycle looked like, what the entry points were for NPO engagement in the evaluation and follow-up process, and, specifically, how NPOs could prepare ahead of the evaluation visit. A Council of Europe representative was also present for part of the meeting, and shared their thoughts on the upcoming onsite visit.
As mentioned earlier, NPO colleagues from Kosovo had the opportunity (during 2017/18) of participating in the government-led working group conducting a risk assessment of the NPO sector. Civil society representatives in the group managed to provide substantive input to the draft risk-assessment report, including getting additional time from the government for internal sectoral consultation on the report. As a result, the risk assessment report does not include particular harmful measures or legislative restrictions for NPOs. It does include a lot of “soft” measures based on education, increased cooperation and implementation of existing frameworks, as well as developing a detailed National Action Plan on counter-terrorism (CT) measures. Kosovar NPOs plan to follow up on those measures to make sure these are not harmful for NPOs.
They are waiting for the final evaluation report to be published by year-end in order to strategize around follow-up activities.
Global Coalition members are continuing to assist the engagement of NPOs in FATF-related work, especially around post-evaluation engagement with the Indonesian government and the Financial Intelligence Unit.
Colleagues in Moldova have increased their activities ahead of the FATF country evaluation, have prepared an analysis of relevant legislation and have established contact with MONEYVAL (the European FATF regional body). They are preparing for an onsite evaluation visit in October – Global Coalition members aim to co-organize a strategy/preparation workshop for NPOs ahead of this.
The situation here is described by one of our coalition members.
A planned workshop in September will cover topics such as the laws and regulations used to justify the crackdown on social media and civic spaces; the scale of regulation for non-governmental organizations, and the risks/legal liabilities they may be exposed to for non-compliance; as well as AML/CFT requirements more specifically.
For a recent article on the situation in the country as regards civic space, see here. A new project involving several members of the coalition is just getting underway, partnering with Tunisian NPOs work on FATF-related issues, especially to follow up on risk-assessment work. The aim is also to engage with the regional FATF body for Middle East and North Africa, MENAFATF.
Colleagues in Germany gathered different NPOs to analyze the sector’s risk assessment and have met the government institutions in charge of preparing the National Risk Assessment and evaluation, in order to discuss cooperation. Civil society has been encouraged to focus on assessing their own sector’s risks and possible mitigation measures.
• UNODC (Vienna, 2018), Guidance manual for Member States on terrorist financing risk assessments.
• Spanish-language toolkit: The International Center for Not-for-Profit Law has just published a Spanish-language toolkit for NPOs on ‘Anti-Money Laundering and Counter-Terrorism Financing Laws and the Financial Action Task Force (FATF) Standards and Procedures’.