Foresight Piece on the Future of FATF Recommendation 8

Research interrogating the normative counterterrorism financing framework related to non-profits and its implementation at national level.   

This foresight piece sets out to interrogate whether getting rid of the non-profit sector-specific terrorism financing recommendation (FATF’s Recommendation 8 [R8]) would help alleviate the unwarranted overregulation, suppression, and financial exclusion to which civil society worldwide has been subjected over the past two decades and more. Interviews with a variety of stakeholders informed the piece and led to the formulation of a dual lens when considering the question. Would it be better or more effective to stick to an ‘evolutionary’ approach and seek to keep refining the recommendation and how it is implemented so that civil society and its operational environment are not impacted? Or would it be more prudent to go for a ‘revolutionary’ approach and look to reimagine how non-profits are dealt with in the framework altogether? What would better support the many challenges facing civil society caught up in the web of legislative, regulatory and policy developments set up to combat financial crime?

Overlaying this dual lens, this report tries to answer these questions by viewing them through three relevant vantage points:

  • that of the recommendation itself (‘Recommendation 8 is not going to find you any terrorists’),
  • that of the national context (‘Using a cannon to kill a mosquito’), and
  • that of the market ('Markets [are] dancing to another drumbeat’).

Going beyond just R8 and non-profits, this foresight piece asks wider questions around the accountability of the FATF as a body (Why ‘kill the golden goose?’). Who is the FATF accountable to? How can those harmed by its actions seek redress? Is there adequate transparency around its ways of working, including around the grey-listing process? Who sits at the policymaking table? Who funds the FATF, and from which pot? 

Stemming from this intensive interrogation, which is rooted in the practice at the global, regional and national level of many of the stakeholders we spoke to, the piece concludes by outlining what would be prudent and effective to leave behind and what to take forward in terms of the FATF framework on non-profits. It also outlines some dilemmas and some seemingly intractable or knotty issues that need further thinking and research.

Read the report here