ATF/AML Update

By Terrance S. CarterNancy E. Claridge and Sean S. Carter

Mar 2022 Charity & NFP Law Update
Published on March 31, 2022



Report by The International Committee of the Red Cross

The International Committee of the Red Cross (ICRC) published volume 103 of its International Review of the Red Cross (the “Journal”) that focusses on the interrelated topics of counterterrorism and international humanitarian law. The 772-page journal, released on February 23, 2022, features interviews with UN special rapporteurs and State officials (including Elissa Golberg, Assistant Deputy Minister at Global Affairs Canada), as well as articles on several themes, such as the impact of sanctions and other counterterrorism measures on the humanitarian space; legal and policy debates about sanctions and other counterterrorism measures; and financial access, de-risking and the role of the banking sector.

The problem that the Journal addresses is that despite the legitimacy of States adopting approaches to counter terrorism, “efforts to cut off all sources of direct and indirect support to terrorists and terrorist organizations have quickly – and predictably – generated a new set of humanitarian challenges.” Counter terrorism measures “have often been overly broad” resulting in a real and substantial harm to humanitarian efforts and preventable civilian suffering.

The Journal recognizes that measures, such as Resolution 2615, adopted by the UN Security Council in December 2021 (and reported on in Carters’ January 2022 Charity & NFP Law Update) are an important step towards bringing counterterrorism efforts back into balance with States’ other international commitments. The resolution was adopted with a view to ensuring the provision of humanitarian assistance and other activities to support basic human needs in Afghanistan, and clarified that such activities would not violate earlier resolutions regarding limiting contact and support of the Taliban. Resolution 2615, which received unanimous support, “marked an important step in ensuring that counterterrorism and sanctions measures do not harm or undermine vital humanitarian work.”

However, there are still several other areas of concern that need to be addressed. In its review of the interaction between international counterterrorism law and international humanitarian law, the Journal notes that the criminal law aspects of counterterrorism measures may be concerning “when those measures are written so broadly as to criminalize as terrorist activities those that are otherwise lawful under [International Humanitarian Law].” Canada is identified as one of the countries where “the current wide definition (and application) of complicity, association with, and support to terrorism offences” exposes humanitarian and impartial medical assistance to suspicion and threats, with specific reference made to subsection 83.03(b) and section 83.19 of the Criminal Code.

Overall, the Journal explores several interesting ideas about how to bring back a balance to counterterrorism measures and humanitarian activities. Charities and not-for-profits, especially those that engage in international humanitarian work, may wish to further review the ICRC’s extensive Journal in light of its engagement on several timely topics affecting both Canadian and international organizations.

FATF Discusses Beneficial Ownership, Unintended Consequences to NPOs, in its Sixth Plenary

The Financial Action Task Force (“FATF”) held its sixth Plenary from March 2-4, 2022 at which international delegates addressed several strategic initiatives for the organization moving forward. Notably, the FATF adopted amendments to Recommendation 24 and its Interpretive Note, which require countries to ensure that “competent authorities have access to adequate, accurate and up-to-date information on the true owners of companies.” A true owner, also referred to as a beneficial owner, is the person who ultimately enjoys the benefit of ownership of property, even if the title to the property is in the name of a different person, for example, a shell corporation.

The FATF has also completed its work “to identify and analyse unintended consequences of the FATF Recommendations,” especially regarding how to prevent the application of these measures leading to de-risking, financial exclusion and undue targeting of non-profit organizations (NPOs). As reported on in  November 2021 Charity & NFP Law Update, the FATF had published an earlier synopsis of a “stock-take” which set out how some countries may incorrectly implement FATF Recommendations resulting in undue targeting of NPOs. The substantive work regarding how FATF can mitigate these unintended consequences of its Recommendations without diminishing the effectiveness of global AML/ATF measures has been referred to FATF Working Groups.



Read the March 2022 Charity & NFP Law Update