The EFC and its key partners in a global NPO coalition initiative have taken the lead to stop the disruption of legitimate activities undertaken by NPOs, which have been put at risk by counter-terrorism policy introduced by the Financial Action Task Force (FATF). The EFC is the lead foundation network in the coalition’s core group, forming part of the EFC’s ongoing work to promote and safeguard an enabling framework for foundations.
Despite the fact that there is little to prove the contrary, there are some government bodies, including FATF, which believe that NPOs including foundations are particularly vulnerable to terrorist abuse. At the start of this year, EFC as part of the core group of the global 120+ NPO coalition on FATF, co-signed a letter to FATF, requesting that they stop targeting the NPO sector and that they revise Recommendation 8 in line with the FATF-endorsed risk-based approach. The co-signatories cover a wide range of non-profits including foundations, donors networks, service delivery organisations, human rights and transparency organisations, based in both the ‘global north’ as well as the ‘global south’.
The NPO coalition letter notes that Recommendation 8 fails to recognise that the vast majority of the millions of NPOs pursue legitimate charitable activities and that abuse of terrorist financing is rare and this should be reflected accurately in this policy document. FATF’s language, in addition to its power to evaluate country implementation of its standards, has helped push overly restrictive regulations for non-profits around the globe and contributed to the growing problem of bank de-risking. FATF has already taken some positive steps to address these problems, as seen in its 2015 revision of the Best Practices Paper, which now includes specific revisions recommended by the global NPO coalition. It is now hoped that FATF will this year undertake a revision of Recommendation 8 and its interpretative note.