March 2020

Contents:
• FATF news
o Outcomes of the February plenary and implications for NPOs
o FATF Presidency: Germany
• Regional update
o Eastern and Southern Africa: capacity building and
engagement
o Latin America: Bank de-risking; Regional Risk Assessment
o Central Asia: Training curriculum
o Europe: Comments on EC Roadmap, particularly on regulatory
approach and supervisory structure
 National update: Tanzania, Jordan, Cyprus, North Macedonia,
Argentina and Mexico, El Salvador, Honduras, Peru
 Resources
• Upcoming events
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FATF news:
Outcomes of the February plenary:
Read the outcomes here. Trinidad and Tobago were removed from the FATF enhanced monitoring list, while Albania, Barbados, Jamaica, Mauritius, Myanmar, Nicaragua and Uganda were added to the existing list.
In terms of potential implications for the NPO sector, the FATF called out strategic deficiencies in supervision and the assessment of sectoral TF risk in the following countries: Botswana, Iceland, Jamaica, Mauritius and Uganda.

 

FATF Presidency:
From July 1, 2020, Dr Marcus Pleyer (Germany) will take on the Presidency of the FATF for a two-year term.

 
Regional update:
Eastern and Southern Africa:
Building upon an initial convening in Uganda in late 2018 for NPOs working in East and Southern Africa, Coalition partner Defenders Protection Initiative (Uganda) with support from ICNL is currently implementing a one-year project that will benefit participating NPO partner networks and new members to build and capacitate the East and Southern Africa network on FATF. The project will promote a deeper and broad understanding of FATF-related issues and processes among NPOs and enhance strategic partnership between NPOs, the FATF-style regional body ESAAMLG and Financial Intelligence Units at national and regional levels. Initiatives aim to increase the capacity of NPOs to play a stronger role in domestic, regional and international FATF processes and promote an increased understanding of the impact of FATF-inspired legislation on civic space and on how to effectively respond to threats and restrictions. It will also promote constructive dialogue between NPOs and regulatory bodies at local, regional and international levels.
 
Latin America:
GAFILAT (FATF Regional Body for Latin America): As an outcome of on-going engagement with the GAFILAT Executive Secretariat by Global NPO members, Gabriela Pellón of the Expert Hub and Jocelyn Nieva of ICNL were invited to facilitate a two-hour session at GAFILAT’s March 5th workshop on the issue of bank de-risking of NPOs. Workshop participants included senior GAFILAT officials and 49 financial and DNFBP (designated non-financial business and professions) supervisors from FIUs, Central Banks, and other relevant government authorities from all 17 GAFILAT member countries, plus a few key partners and funders. An overview of the impact and drivers of de-risking of NPOs was presented; and examples of effective multi-sector approaches to the problem shared. Small group and plenary discussions were facilitated on what has been done in the participating countries; what priority actions should be taken; and what contributions different sectors could make towards reducing the incidence and severity of bank de-risking problems.
The session was well-received by the participants, who acknowledged extremely limited experience in their countries to study or mitigate NPO de-risking. Needed next steps highlighted by working group participants included:
• NPO sector Risk Assessments;
• Written guidance and training sessions for Financial Institutions (FIs);
• Proportionate, risk-based regulations for FIs related to NPOs; and
• Technical assistance for FIUs from international experts.
GAFILAT Executive Secretary Esteban Fullin and representatives of the German International Cooperation Agency (GIZ) and the Alliance for Financial Inclusion (AFI) all proposed follow-up engagement with the Global NPO Coalition on the issues raised in the session.
 
GAFILAT: Regional NPO Sector Risk Assessment
Additionally, an expert group of Global NPO Coalition members has collaborated with the GAFILAT Executive Secretariat to design a survey for GAFILAT member governments to map NPO sector risk as well as country practices in implementing FATF’s Recommendation 8. The expert group will work with GAFILAT on capacity-building activities to help government officials understand and correctly complete the survey. The group is also preparing to develop and disseminate parallel surveys for NPOs and FIs in the GAFILAT countries.  NPO partners will be supported in those countries to promote broad participation in each of the three surveys in order to produce a comprehensive map for the region.
 
Central Asia:
OSCE: The OSCE commissioned Global Coalition members Human Security Collective (HSC) and Greenacre Group to develop a comprehensive training curriculum for representatives of NPOs and relevant government agencies covering 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 has now been developed and is set to be initially rolled out in Central Asia.
 
Europe:
In December 2019, the European Council set out its strategic AML/CFT priorities for the coming years. Additionally, the European Commission’s 2020 Work Programme announced that in order “to ensure the integrity of the European financial system and reduce the risks of instability, a new Action Plan on Anti-Money Laundering will seek to improve the supervisory system and improve the enforcement of the rules”.
Members of the Global NPO Coalition (Civil Society Europe, DAFNE/EFC, ECNL and HSC) submitted joint comments on this roadmap, and will continue to engage on the suggestions of moving from a Directive to a Regulatory approach and on the potential creation of a European supervisory structure, including the inherent risks and opportunities of such approaches.
 
National update:
Tanzania: Coalition partner Legal and Human Rights Centre’s (LHRC) Tito Magoti was arrested by the Tanzanian authorities in December 2019 and, in blatant contravention of international law, was not informed of the reason for his arrest, nor could he avail of his right to legal representation or the right to inform his family of his arrest or where he was being detained. It was only after LHRC filed an urgent petition (Habeas Corpus), that Mr Magoti was charged, four days later, with money laundering offences (among others). Given that he has been charged with offences that are unbailable, he remains in prison. To read more on this growing trend in Tanzania, used to silence and threaten Human Rights activists, read LHRC’s letter and advocacy position here.

 

Jordan: Global Coalition members ICNL and the Al-Hayat Center have begun a collaboration in Jordan, building the capacity of government, NPOs, lawyers and the media on the FATF rules and regulations and their impact on the NPO sector. International expertise will be used to provide technical assistance around a sectoral risk assessment. Events are currently on hold due to the COVID-19 outbreak.

 

Cyprus: The FATF Mutual Evaluation Report for Cyprus was published in December 2019 by Moneyval (the FATF Regional Body). Coalition member Civil Society Advocates engaged on the issue ahead of the onsite visit last May, but were not invited to meet with the assessors. Some of the points that they raised, however, were taken on board in the assessment report, including the lack of a sectoral risk assessment resulting in harsh regulatory measures primarily for Societies and Foundations.
Civil Society Advocates’ Clairie Papazoglou writes:
‘Following this report, the Republic of Cyprus has asked and has been granted, a technical assistance grant to help the relevant authorities with carrying out the risk assessment of the NPO sector and developing best practices, while engaging the NPO sector. We look forward to being in involved in this process, as we’ve been promised by the Ministry of Interior’.

 

North Macedonia: Local NPO Konekt established a relationship with the FIU and convinced the government to engage with the NPO sector in the Risk Assessment process as well as in the follow on. The government established a formal working group, including NPOs, for the conduct of a sectoral Risk Assessment. A first training workshop for the working group was conducted by ECNL and the Greenacre Group. In addition, ECNL and Konekt formulated comments for the FIU on their official Guide for NPOs on TF risks: the FIU has recognized the need to address these comments and to update the material in order to be compliant with FATF’s Recommendation 8.

 

Argentina and Mexico: Coalition members from Argentina and Mexico, Gabriela Pellón and Miguel de la Vega (UnidOSC), authored a report in 2019 on mitigating the risks of terrorism financing and corruption in the NPO sectors of the two countries. Read the Executive Summary (translated into English now) here.

 

El Salvador: NPOs here are particularly concerned about a 2019 draft law’s reporting and oversight obligations on the sector that are identical to those applied to many for-profit entities.  NPOs are also raising objections about the government’s lack of engagement with the sector in conducting risk assessments. Facilitated by Coalition member ICNL, and led by the local Foundation of Studies for Application of the Law (FESPAD), there have been meetings with Congressional committees, the FIU, and other officials. FESPAD anticipates that they will be invited to participate in legislative reviews of the draft law as well as a multi-sector dialogue on the next risk assessment.

 

Honduras: A working group of NPOs here are designing a sectoral risk assessment methodology (with input from Coalition members in the region). Representatives of the FIU, the Honduran Association of Banking Institutions, and the NPO sector oversight agency have all indicated interest in collaborating with this sector initiative.  A multi-sector dialogue on the sectoral risk assessment will take place as soon as circumstances permit.

 

Peru: Early this year, the Peruvian umbrella organization, the National Association of Centers, convened a meeting between NPO and FIU representatives to raise awareness on the role of the sector and the negative impact of current AML/CFT laws on their work, and to promote collaboration going forward. Meeting participants agreed to work together to (a) improve regulations and practices affecting the sector so that they are more in line with Recommendation 8; (b) simplify oversight of NPOs that offer microcredit financing; (c) produce written guidance to reduce bank de-risking of NPOs; and (d) ensure NPO participation in the national risk assessment planned for this year.
 
 
Resources:
Tom Keatinge and Florence Keen, March 2020. A Sharper Image: Advancing a Risk-Based Response to Terrorist Financing. RUSI Occasional Paper.

 

Nigeria: The Closing Spaces Database has been redesigned to be a one-stop-shop for everything related to civic space in Nigeria. Navigation on the site has been made easier and more secure to enable information resources to be more accessible from anywhere in the world. You can now sort closing space incidents by the categories of rights violated (freedom of speech, assembly or association rights) or by the mode of attack (unlawful arrests and detentions, kidnaps, restrictive legislations, physical attacks, etc), or by geographical regions, or by specific West African countries affected by civic space restrictions.

 

FATF Toolkit, in Spanish and English

 

 
Upcoming events:
27 March, 1400 East Africa Time: Webinar organized by Defenders Protection Initiative, Uganda, on recent development in the realm of AML/CFT legislation and relating/relevant to civic space in Africa.

 

Most in-person events have been put on hold for the time being due to the pandemic.

 
If you have any questions on the above or, indeed, examples of similar processes or work in your country you wish to share with the members of the Global NPO Coalition, please send a short paragraph to Sangeeta Goswami at npos@fatfplatform.org or sangeeta@hscollective.org