December 2019

FATF news
o Outcomes of the October plenary
o FATF Strategic Review
Global update
o ‘No Money for Terror’ conference in Melbourne
Regional update
o Latin America and the Caribbean
o Central Asia
o Europe
National update
o Nigeria
o Tunisia
o Kosovo
o Argentina,
o Kazakhstan, Kyrgyzstan and Tajikistan
Upcoming events

FATF news:
Outcomes of the October plenary:
Read the outcomes here. Tunisia, Ethiopia and Sri Lanka were removed from the enhanced FATF monitoring list, while Iceland, Mongolia and Zimbabwe were added to it.

After 30 years of its existence, the FATF has embarked on a strategic review, ‘to consider the experience of the conduct of mutual evaluations to date which should inform the future of FATF’s work post the current round of mutual evaluations. This will aim to strengthen the efficiency and the effectiveness of FATF and make the FATF’s country assessments and monitoring processes more timely, effective and risk-based’. More below.

FATF Strategic Review:
The Royal United Services Institute (RUSI)’s Centre for Financial Crime and Security Studies held a panel on the 18th of November, which included FATF Executive Secretary David Lewis, and which reflected on the announcement of the above-mentioned FATF strategic review. A number of Global Coalition members were present to attend the all-UK panel discussion. A clip of the panel can be found here.

Global update:
‘No Money for Terror’ Conference, Melbourne:
Members of the Global NPO Coalition on FATF took part in the second ‘No Money for Terror’ conference, a two-day event (7 and 8 November) following on from the first one convened in 2018 by French President Emmanuel Macron in Paris. The Coalition’s presence was facilitated by the Australian Council for International Development (ACFID). It was represented by its co-chairs, Lia van Broekhoven (Human Security Collective {HSC}) and Kay Guinane (Charity & Security Network), and members Ira Novita (PINGO, Indonesia) and Bridi Rice (ACFID).
A session on 8 November focussed on NPOs (‘Ways to strengthen and prevent the exploitation of the not-for-profit sector for terrorism purposes, including through risk assessments, education and outreach activities’). NPOs and the private sector had ‘observer’ status at this session. The Coalition prepared a statement for the event, which was circulated to delegates.

Regional update:
Latin America and the Caribbean:
GAFILAT: An official side event with NPOs took place at the recently-concluded GAFILAT (FATF-Style Regional Body for Latin America) plenary in Arequipa, Peru. This follows on from sustained advocacy with GAFILAT by the International Center for Not-for-Profit Law (ICNL), by Gabriela Pellón (the Expert Hub member from Argentina), and by the Global NPO Coalition. Regional trends and emblematic examples of problems with Recommendation 8 implementation were presented to leaders of GAFILAT’s Executive Secretariat, Terrorism Financing Working Group, and incoming and outgoing Presidents. The NPO participants and GAFILAT officials also discussed mutual interest in collaborating on a regional sector risk assessment. GAFILAT members were expected to vote on a motion to discuss this regional risk assessment at the plenary. The meeting with GAFILAT was extremely productive, and has managed to mobilize the Executive Secretariat to work, by 2020, together with the Global NPO Coalition and the Expert Hub on the FATF, not only on the mapping of regional risks, but also, as partners in Latin America, to help with the correct implementation of Recommendation 8. The challenge in the short and medium term is to discuss and agree on what form and shape the NPO contribution takes within the alliance.
ICNL, along with Expert Hub members Gabriela Pellón and Miguel De la Vega (Mexico), organized a regional workshop, concurrent to the Arequipa GAFILAT Plenary, to prepare NPO leaders to engage with GAFILAT and their own countries on sectoral risk assessments, among other opportunities. NPO participants at this workshop came from Argentina, Bolivia, Brazil, the Dominican Republic, El Salvador, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru and the United States. The workshop was effective in raising awareness, improving technical knowledge and, even more so, says Gabriela, ‘thinking of ourselves as a collective/group at the regional level’.

Caribbean Financial Action Task Force (CFATF):
Our members are currently at a regional workshop in Port of Spain, Trinidad and Tobago, on a multi-sector collaboration for improved compliance with Recommendation 8. The workshop includes representatives of NPOs, FIUs, other oversight agencies, the Trinidadian ACAMS chapter and universities from 15 CARIFORUM countries. The event has been co-sponsored by ICNL, along with the World Bank, and is being held in collaboration with CFATF.

WINGS: The 2nd WINGS (Worldwide Initiatives for Grantmaker Support) Regional Meeting for Latin America and the Caribbean on ‘Finding Common Paths to Fostering an Enabling Environment in the Region’ took place at the end of October. Global NPO Coalition members Jocelyn Nivea (ICNL) and Gabriella Pellón discussed the impact of the FATF regime on the operational environment of civil society, including on financial access, and suggested possible engagement and advocacy pathways. Read the full report of the WINGS event here.

Central Asia:
OSCE: Coalition member HSC attended the Security Committee meeting of the Organization for Security and Cooperation in Europe (OSCE) in late September in Vienna, and stressed the need for government and civil society collaboration in order to understand terrorism financing and the potential abuse of civil society, as well as adequate measures that can be developed, with an emphasis on capacity building and training rather than repression. The need for a robust sectoral risk assessment was highlighted.
Following on from this, Global Coalition members HSC and Greenacre Group have been tasked with developing a curriculum for representatives of NPOs and relevant government agencies on, among other issues, the FATF standards, their unintended consequences, the risk-based approach and sectoral risk assessments, self-regulatory measures and existing laws and regulations, relevant UN Security Council Resolutions, etc. This curriculum will be developed next year and is to be rolled out initially in Central Asia.

The European Council has set its strategic AML/CFT priorities for the coming years. See here for the details.

National update:
A group of 7 NPOs, led by Coalition member Spaces for Change, met with assessors from FATF/GIABA (the FATF-Style Regional Body for West Africa) as part of the onsite visit related to Nigeria’s AML/CFT Mutual Evaluation peer-review process. The NPOs expressed their concerns about the results of Nigeria’s National Risk Assessment (NRA) on Money Laundering and Terrorism Financing risks in the country, strongly objected to the introduction of another dedicated regulator, and stressed the existence of already-existing self-regulation measures in the sector. For further details on the discussions, see here.
Victoria Ohaeri, Executive Director of Spaces for Change, writes: ‘FATF/GIABA has sent in a draft assessment report on the recently-concluded ME [Mutual Evaluation] process. Most of our concerns/demands were reflected in the draft report, especially as regards the failure to conduct a specific risk assessment of the NPO sector to identify NPOs at risk of ML and TF; the classification of NPOs as DNFBPs [Designated Non-Financial Businesses and Professions]; the need to strengthen CAC [Corporate Affairs Commission – one of the CSO regulators] regulation… there was no mention of any need for an additional regulator for NPOs, etc. The report concluded that as a result of the classification of NPOs as DNFBPs and the imposition [of] AML/CFT requirements meant for such entities on NPOs, SCUML [Special Control Unit Against Money Laundering] has arguably disrupted and discouraged legitimate operations of NPOs. The report, however, expressed concerns about NPOs not filing STRs [Suspicious Transaction Reports], even for false positives. Across the broad, strengthening corporate oversight through CAC was emphasized.’

Tunisia has been under a lot of pressure to reform its AML/CFT rules/regulations/institutions and bring them in line with global standards after being put on both the FATF and EU ‘blacklists’ (‘high-risk and other monitored jurisdictions’) in the recent past. With CSOs in Tunisia starting to feel the squeeze in terms of operational space, they have been organizing themselves nationally and internationally to counter this.
A consortium including KADEM, HSC, Greenacre Group, ICNL and ECNL was set up to work on an effective risk assessment of the sector, preferably with buy-in from the FIU (Commission Tunisienne des Analyses Financières or CTAF). Coalition partner Amine Ghali (KADEM) writes:
‘Constructive discussions, centred on specific expertise provided by the consortium, yielded an agreement on the collaboration between state institutions and local CSOs in order to update the risk assessment of the sector using a new and innovative methodology (developed by Greenacre Group). During this past year, these state institutions (including CTAF, the General Directorate of Associations and Political Parties at the Presidency of the Government, the Anti-Terrorism Commission) and CSOs (ASF, Jamaity, ASDI and KADEM) have worked together to update the sectoral risk assessment, which was then presented by CTAF to MENAFATF [the regional FATF body]. The collaboration and the work done on Recommendation 8 in a way which protects civil society freedoms, and the relevant actions to be implemented to mitigate ML/TF risks within the NPO sector, has been much valued by the regional body.
As a result, at the latest MENAFATF plenary in Cairo (end of November 2019), Tunisia was found compliant with Recommendation 8 – one of only six countries globally to be rated so. Just as importantly, there is now a genuine partnership between government and civil society on issues relating to possible TF risks in the NPO sector and measures to be implemented to mitigate these risks.’
The FATF has also now removed Tunisia from its ‘high-risk and other monitored jurisdictions’ list.

Research conducted among its members by Kosovar NGO umbrella organization CiviKos points to the fact that, in the NGOs’ experience, ‘bank derisking’ was pervasive. Derisking is interpreted as the practice of financial institutions (banks) restricting access to or increasing the threshold for their services. In Kosovo, this was taking the form of:
• the closing of bank accounts without prior notification,
• higher maintenance fees for NGO accounts as opposed to individual or corporate accounts (sectoral inequity), and
• unusual due-diligence requirements (resulting from conflation of the ‘beneficial owner’ with the founder of the organization rather than the person legally authorized in statute).
A multi-stakeholder dialogue was convened by CiviKos (in collaboration with ECNL and ICNL, and with the contribution of Coalition member Human Security Collective) in Pristina in October to discuss some of these issues. In attendance were NGOs (including a few who were part of the research) and representatives of the Central Bank, the Financial Intelligence Unit, the Ministry of Finance, the Ministry of Public Administration and the Banking Association. This was the first such multi-stakeholder dialogue – with the involvement of NGOs – on this topic in the country. For the report on the event and the recommendations, see here.

A multi-stakeholder dialogue was organized by Universidad Austral (Pilar) and ICNL to discuss the financial access issues facing nonprofits in Argentina. With over 70 participants, including representatives from public and private banks, NGOs and NGO umbrella bodies, as well as banking associations, the conference concluded that ongoing dialogue between various stakeholders was essential to tackling the financial access problems facing NGOs. This had to be done together with the exploration of innovative mechanisms that facilitate the relationship between NGOs and banks. Read the report here.

Kazakhstan, Kyrgyzstan and Tajikistan:
ICNL conducted three separate FATF-related workshops for CSOs in Almaty, Bishkek and Dushanbe in the last month. This follows on from the 3-day regional workshop that took place earlier in June.

UN Special Rapporteurs and China:
The Special Rapporteur on the promotion and protection of human rights and fundamental freedoms while countering terrorism, along with the Working Groups on Arbitrary Detention & Enforced/Involuntary Disappearances and nine other Special Rapporteurs, have released this communication regarding China’s Counter-Terrorism Law and its regional implementing measures. In particular, the experts express concerns that the law is overbroad and being misused, resulting in serious violations – including arbitrary detention, enforced disappearance, torture, and other violations of fundamental freedoms, particularly to minority communities such as Uyghurs and Tibetans. In addition to requesting further information, the mandate holders offer recommendations and encourage the Chinese government to engage in a process of independent review of its counterterrorism laws and practice.

Balancing Act: Anti-terror efforts and humanitarian principles. A conversation on how counter-terror laws impede aid work. With Coalition member Emma O’Leary from the Norwegian Refugee Council.

FATF Toolkit, in Spanish and English

ECNL’s CSO Meter: Country and regional reports on the state of civil society environment in the 6 Eastern Partnership (EaP) countries in Europe.

Global Terrorism Index, 2019

RUSI: Suspicious Transaction Report podcast, a fortnightly podcast from the Centre for Financial Crime and Security Studies at RUSI.

Upcoming events:
Regional FATF training for South and South-East Asia, organized by ICNL and PINGO, in March 2019 in Jakarta, Indonesia.