Recommendations for Improving the Implementation of FATF Evaluation Process
A group of international non-governmental organizations that monitor changes in non-profit law and policy globally met recently to discuss the effects of changes to the Financial Action Task Force’s (“FATF”) Recommendation 8 and its interpretive note on the FATF evaluation process. As a matter of background, the FATF is an inter-governmental body responsible for setting and monitoring international standards for combating money laundering and financing of terrorism and proliferation. Information and commentary on the changes to the FATF’s Recommendation 8 and its Interpretive Note can be found in our Anti-Terrorism and Charity Law Alert No. 46. The meeting of international NGOs took place on September 21, 2016 and the meeting outcomes and recommendations are publically available.
The purpose of the gathering was “to address the evaluation process from a government, non-profit and FATF perspective in light of the recent revision of FATF Recommendation 8 […] and its Interpretative Note”. The main recommendation from the meeting was a need for a “genuine and continuous dialogue between the various stakeholders and NPOs, and concrete guidance for governments and evaluators” to allow countries to prepare for evaluation processes and for NPOs to engage with both the evaluation and with the risk assessment performed by the country. The document also offers a list of recommendations to encourage this, as well as a list of main points and takeaways from the discussions. Some of the recommendations include developing a standard approach for evaluators engaging with the non-profit sector, “[d]evelop[ing] clearer guidance for governments and evaluators about the effectiveness review,” and making national risk assessments of the non-profit sector public.
FATF President Speaks at UN Security Council Meeting
The President of the Financial Action Task Force (“FATF”), spoke at a meeting of the United Nations Security Council on December 15, 2016 about recommendations on countering terrorist financing (collectively, “FATF U.N. Recommendations”). The FATF is an inter-governmental body responsible for setting and monitoring international standards for combating money laundering and financing of terrorism and proliferation. During the FATF U.N. Recommendations, the President of the FATF said that the important challenges facing the global community include the fact that “some countries simply do not have the capacity to exercise effective controls”, and that countries may not understand the potential links between business intelligence and countering terrorist financing. The President recommended that the global community support capacity building for those countries that need it, ensure that more work is done to “link-up the relevant authorities in each country”, and ensure that emerging financial technologies are not exploited for terrorist financing or other criminal purposes.
The actions of the FATF are increasingly relevant to charities and non-profits around the world as this policy making body sets broad goals and recommendations for implementations of actions to counter money laundering and terrorist financing nationally, and charities and non-profits have been specifically identified by the FATF as a specific potential conduit for illicit funding. The information sharing and regulatory regimes recommended by the FATF will have a real impact on member nations (like Canada) and charities and non-profits need to keep themselves aware as they operate domestically and internationally.