By Terrance S. Carter, Nancy E. Claridge and Sean S. Carter

Context

In November 2025, the United Nations Global Counter-Terrorism Coordination Compact published a Guidance Note titled Ensuring Respect for Human Rights while Taking Measures to Counter the Financing of Terrorism. The document was developed jointly by several UN working groups. Its release reflects a growing international recognition that counter-terrorist financing frameworks – while essential to global security – have, over the past two decades, generated significant and often unintended consequences for civil society, humanitarian actors, and non-profit organizations (NPOs). Following the attacks of September 11, 2001, international efforts rapidly shifted from general anti-money laundering to targeted combatting the financing of terrorism (CFT) regimes. Over time, however, these measures were increasingly criticized for being overbroad, inconsistently applied, and, in some cases, misused to suppress legitimate civic activity. The Guidance Note responds to these concerns and draws on stakeholder consultations launched in 2020 to clarify how states can meet their security obligations while remaining compliant with international human rights, humanitarian, and refugee law.

CFT Laws are Subject to International Human Rights Standards

The Guidance Note underscores that counter-terrorist financing measures remain fully subject to international human rights standards. Even when acting in the name of security, states are bound by the principle of legality, requiring CFT laws to be clear, precise, and foreseeable. Overly broad or vague definitions of terrorism or terrorist financing increase the risk of arbitrary or discriminatory enforcement. Any limitation on rights must meet four cumulative requirements – legality, necessity, proportionality, and non-discrimination – meaning that CFT measures must be prescribed by law, genuinely required to address a legitimate security objective, proportionate to the risk involved, and applied without targeting protected groups.

Privacy

The Guidance Note highlights privacy risks arising from the collection, analysis, and sharing of financial intelligence within CFT regimes. While Financial Intelligence Units (FIUs) play a critical role in countering terrorist financing, their activities must comply with the right to privacy under Article 17 of the International Covenant on Civil and Political Rights. The Guidance Note cautions against indiscriminate data collection and information sharing practices that lack clear legal limits or effective oversight. To address these concerns, states are encouraged to implement strong data protection safeguards, limit the use of personal data to defined and legitimate purposes, and establish independent oversight mechanisms to prevent misuse and abuse.

Legal Proceedings

The Guidance Note also affirms that fair trial guarantees apply fully within CFT frameworks, whether proceedings are criminal, administrative, or regulatory in nature. Individuals accused of terrorist financing offences – or subject to preventive measures such as asset freezing – must be afforded due process protections, including the presumption of innocence, access to legal counsel, and the right to challenge decisions before an independent and competent authority. The Guidance Note further underscores the obligation of states to allow access to frozen funds for basic living expenses and extraordinary needs, such as medical care, to avoid violating economic and social rights.

Civil Society

Of relevance to charities and non-profits, the Guidance Note emphasizes the importance of protecting civic space and recognizes the essential role that NPOs play in humanitarian relief, social welfare, and human rights work. It cautions that treating the sector as inherently high-risk under CFT regimes has often resulted in disproportionate regulatory burdens, financial exclusion, and constraints on legitimate advocacy. The document strongly endorses a risk-based approach, urging states to identify only those areas of the sector that are genuinely vulnerable to terrorist abuse rather than imposing blanket restrictions. It also highlights the need for meaningful consultation with civil society actors to ensure that CFT measures are proportionate and effective.

The Guidance Note further addresses the intersection between CFT measures and humanitarian action, reaffirming that impartial humanitarian assistance is protected under international humanitarian law and should not be criminalized. Building on Security Council Resolution 2664 (2022), it supports humanitarian carve-outs that allow the provision of goods and services necessary to meet basic human needs, even where sanctions or asset freezes apply. The document also notes that gender-neutral CFT policies can have disproportionate impacts and encourages states to adopt more inclusive, data-informed approaches to risk assessment.

Private Sector

Finally, the Guidance Note considers the role of the private sector, particularly financial institutions, under the UN Guiding Principles on Business and Human Rights. Banks and other entities are encouraged to manage terrorist financing risks through targeted mitigation rather than wholesale termination of relationships with NPOs. States, in turn, are urged to establish independent oversight bodies to monitor data protection and accountability practices within the private sector.

Takeaways

For charities and non-profits, the Guidance Note offers an important reference point rather than a source of binding obligations. It reflects a growing international consensus that CTF measures must be grounded in the rule of law and respect for human rights. Boards and senior management may find the document useful when engaging with regulators, financial institutions, and policymakers, particularly on issues of proportionality, risk-based regulation, and access to financial services. As CFT regimes continue to evolve, the Guidance Note reinforces the need to ensure that security measures do not undermine the legitimate humanitarian and social objectives that charities and Not-for-Profits exist to advance.

​Read the January 2026 Charity & NFP Law Update