Coalition webinar on recent revisions to Recommendation 8

The Global Coalition organized a webinar on 7th March 2024 to discuss the recent changes to the Recommendation 8 (p.13) and its Interpretive Note (pp.65-66), as well as changes to the guidance document on the implementation of the Recommendation (the Best Practices Paper). Moderated by Charity & Security's Ashleigh Subramanian-Montgomery, the first half featured FATF's Tom Neylan, the Head of its Risk and Policy Unit, who outlined the following salient features:

  1. OBJECTIVE: The main objective of Recommendation 8 is to protect NPO from TF abuse. But the fact that this should be done without disrupting and discouraging legitimate charitable activity has now been made part of the objective (p.13)
  2. SCOPE: This has been re-framed. It has now been made clear that the Standard applies to only a subset of NPOs as not all NPOs meet the FATF definition. Countries are often seen to draw the line in the wrong place. The revisions will seek to ensure that the line is narrowly drawn - and gives countries the license to do so. 
  3. RECONNECTING WITH THE RISK ASSESSMENT – the focus should be on an evidence-based Risk Assessment, and not a default to high-risk for the sector (given that the vast majority of NPOs are low risk).  
  4. MEASURES: need to be focussed, proportionate and relevant to the risk
  5. SELF-REGULATION: when accounting for risk, sectoral self-regulation measures need to be taken into account in the mitigating measures column
  6. The Best Practices Paper has now includes BAD practice (so what countries should NOT do)

Also mentioned was the need for assessor training to reflect the changes; an updating of the FATF methodology for use in the 5th Round of evaluations (2025), where countries will be marked down for doing too much; the need for awareness raising, including with government. The focus on mitigating Unintended Consequences will continue in the FATF's new work programme (to be tabled in June).

Caudia Guadamuz from ICNL, Roselyn Hanzi from Zimbabwe Lawyers for Human Rights and Vanja Skoric from ECNL responded to Tom's presentation from the regional, national and global perspectives, respectively. They highlighted what more needed to be done at those levels to ensure that the implementation of financial integrity standards does not harm the operational environment of civil society.


The second half of the webinar was HSC presenting their new foresight piece on the 'Future of Recommendation 8'. Read the full report here, and a blog summarizing the main arguments (published in Just Security) here.    


CLICK HERE for webinar recording.