February 2018

A. News from the FATF
B. Developments regarding bank de-risking
C. Regional/national news
D. Latest research and reports


1. Outcomes of FATF Plenary, 21-23 February 2018 held in Paris, including: adoption of a new counter-terrorist financing operational plan; adoption of a report to the G20 Finance Ministers and Central Bank Governors; discussion of the Mutual Evaluation Report of Iceland and of progress made in other jurisdictions; documents identifying jurisdictions that may pose a risk to the international financial system; updates on developments regarding de-risking; understanding the risks posed by virtual currencies; and more.

2. Mutual Evaluation Reports:
Both rated ‘Largely Compliant’ on Recommendation 8 on non-profits. In the case of Ukraine, the evaluation recognized the fact that the National Risk Assessment conducted was broad brush in nature and did not identify NPOs at risk, yet highlights the fact that there is a higher terrorism financing risk posed by charities.
‘Partially Compliant’ on Recommendation 8. The evaluation found that although Mexico includes non-profits under its AML obligations, it did not review the adequacy of regulations relating to civil society, nor conduct targeted outreach to the sector.

3. FATF publication: Financing of Recruitment for Terrorism Purposes (January 2018). The Global NPO Coalition provided input for this report, including feedback that the evidence base they use for NPOs is extremely weak.

1. An International Stakeholder Dialogue on Ensuring Financial Services for Non-Profit Organizations was held in The Hague on Feb 15, 2018. Organized by the Dutch Ministry of Finance, the World Bank and Human Security Collective, it brought together public- and private-sector stakeholders – banks, humanitarian organizations, government policymakers, and international organizations – to examine what each can do to reverse this phenomenon. The objective was to identify causes, and, more importantly, to share experiences, actions and strategies to ensure that access to financial services is safeguarded for NPOs. Multi-stakeholder dialogue addressing financial access challenges have been underway in the United Kingdom, the Netherlands and the United States in the past year to discuss potential solutions. This event sought to amplify these efforts, foster greater understanding and collaborative relationships between stakeholders, and, hopefully, ensure that work toward concrete solutions continues. The background paper for the meeting is here. A report is forthcoming.

2. Report on de-risking in the East & Southern Africa region by FATF-Style Regional Body, ESAAMLG.

1. Setting up of an AML/CFT Expert Hub: A three-day workshop took place in The Hague, with representatives from 16 countries, the aim of which was to set up a technical resource group of experts from countries/regions facing restrictions under the guise of CFT/AML regulation. The group will promote peer learning, share information and generate knowledge. It will also develop guidance, collect good practices, and monitor threats. For more on the hub, see here. And for one of the participants’ viewpoints, click here. 

2. Uganda: Chapter Four Uganda, the Uganda National NGO Forum and Defenders Protection Initiative organized a dialogue with the Financial Intelligence Authority on the 12th of February. Also present was the Head of Financial Crime, Compliance and Governance of the Standard Chartered bank, Uganda.

3. GIABA, the West African FATF regional body, is holding a workshop (invitation only/April 4-6/Abuja) on the ‘Development of Effective Frameworks to Fight Against ML/TF Through Non-Profit Organizations’ – Global NPO Coalition members will be present at the workshop both as resource persons and as participants. We will update you on the workshop in the next edition of the newsletter. 

1. New report (February 2018) from Centre for Global Development: Fixing AML: Can New Technology Help Address the De-risking Dilemma? looking at six new technologies [know-your-customer (KYC) utilities, big data, machine learning, distributed ledger technology (DLT), legal entity identifiers (LEIs), and biometrics] to see whether these can help with AML/CFT compliance, thereby stemming the issue of de-risking by making correspondent banking more viable.

2. Report (February 2018) of the Special Rapporteur on the promotion and protection of human rights and fundamental freedoms while countering terrorism, Fionnuala Ni Aoláin, on Promotion and protection of human rights and fundamental freedoms while countering terrorism to the Human Rights Council.

3. Summary of the work of the Global NPO Coalition on FATF in this Crime, Law and Social Change journal article (December 2017) Protecting charities from terrorists … and counterterrorists: FATF and the global effort to prevent terrorist financing through the non-profit sector by Peter Romaniuk and Tom Keatinge.

4. The fascinating relations between finance and security are explored in this open access issue of the Finance and Society journal.

5. Sur 26 journal issue (December 2017) on Reclaiming Civic Space.