An Analysis of US Treasury’s Terrorist Financing Risk Assessment

In anticipation of the Financial Action Task Force’s (FATF) evaluation of US implementation of its anti-money laundering and terrorist financing (AML/TF) standards, the US Department of Treasury published the first National Terrorist Financing Risk Assessment on June 12, 2015. While the section on non profit organisations (NPOs) offers little new information on current risks of terrorist abuse, it does find that abuse of the charitable sector tends to involve individual fundraisers claiming a charitable purpose but outside of any charitable organization recognized by the U.S. government.” [p. 3] (emphasis added) According to FATF, the national risk assessment is the first step in analysing the need for measures to protect the charitable sector from terrorist abuse. It adds that any restrictions should be targeted to actual risk so that the activities of legitimate NPOs are not disrupted. The findings in this assessment raise questions about the necessity of many restrictions that currently apply to US NPOs, especially those recognised as tax-exempt by the federal government.

Treasury did not conduct public outreach to solicit input or comments despite guidance from FATF encouraging it to engage all relevant stakeholders, including the non profit sector.  The 61-page document is based solely on government sources. Our US coalition partner, Charity & Security Network (CSN), analyses the US national terrorist financing risk assessment document in detail for its implications on NPOs and the upcoming FATF evaluation. See more here.