Strong statement from FATF and MONEYVAL on States misusing AML/CFT Standards
Serbian civil society organizations (CSOs) have been increasingly worried about security-related overregulation of the sector, including the use of oversight powers designed to target the financing of terrorism to obtain banking information and information on the financial transactions of CSOs, investigative journalists, media associations and other groups working on human rights.
The UN Special Rapporteurs expressed their concern, including to the FATF. The FATF, in turn, have responded with a strong statement (read full statement here).
A few relevant extracts from the letter:
The FATF takes such allegations seriously and considers actions such as the ones subject to these allegations antithetical to our Standards, particularly the risk-based approach set out in Recommendation 8 in relation to NPOs, and the role of the Financial Intelligence Unit set out in Recommendation 29.
... the FATF Standards are designed to protect NPOs from terrorist financing, while also ensuring that their legitimate charitable activities are not disrupted or discouraged. The Standards were drafted to ensure that they are in line with international principles on human rights and fundamental freedoms. It is in direct contradiction to the FATF Standards and categorically unacceptable if its measures are exploited and used to oppress human rights under the pretext of counter-terrorism. Should this be identified in the course of a mutual evaluation, a country would be assessed negatively for not implementing the risk-based approach outlined in the FATF’s Standards.
... MONEYVAL will continue to monitor and follow-up on the serious allegations raised against Serbia. The FATF Secretariat will participate in the April 2021 MONEYVAL plenary meetings when this issue will be discussed. The FATF Secretariat will use as an opportunity to ensure that there is no ambiguity regarding the interpretation and proper implementation of the FATF Standards.
All the relevant material relating to this case can be found here.
For a full background of the case from the civil society perspective, read this brief prepared by Civic Initiatives, the Serbian CSO which led the advocacy, in association with ECNL.
Update, July 2021: Moneyval has just released this statement after its plenary, highlighting the following:
The Plenary recalls the specific limitations contained in the FATF Recommendations and Methodology with regard to the powers of the FIU to seek information from reporting entities so as to avoid indiscriminate requests without a link to a suspicion of money laundering (ML), terrorist financing (TF) or predicate offences.
The Plenary meeting calls on all members to ensure that the FATF Recommendations are not intentionally or unintentionally used to suppress the legitimate activities of civil society.
In this context, MONEYVAL emphasises the importance of involving NPOs in risk assessment activities on a voluntary basis, rather than through the exercise of formal FIU powers.
Furthermore, MONEYVAL advises its members to ensure that public entities charged with the registration and/or the supervision of the NPO sector are involved in interactions related to national or sectoral risk assessments. Henceforth, MONEYVAL shall pay particular attention to such situations arising among its membership.