‘Risk and Consequence: The Future of FATF Recommendation 8 for Financial Integrity and for Civil Society’ – Global Conference

Our first global event kicked off today in Bonn, Germany  🇩🇪!

Representatives from Africa, Asia, the Caribbean, Europe, Latin America and MENA are here today for this special event organised by the the EU AML/CFT Global Facility, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Global Program ‘Combating Illicit Financial Flows’, and the Global NPO Coalition on FATF.

‘Risk and Consequence: The Future of FATF Recommendation 8 for Financial Integrity and for Civil Society’ brings together 150 participants from NPOs, Financial Action Task Force (FATF), FATF-Style Regional Bodies (FSRBs), financial intelligence units (FIUs), regulators, supervisors, and banks. For two days, they will exchange ideas on shaping the future of Recommendation 8 and identifying collaborative efforts to improve compliance and financial integrity while allowing civic space to flourish. High-level decision-makers will also be present, in order to address policy and operational gaps. By the conference’s end, we aim to determine proportionate oversight and meaningful engagement between NPOs and stakeholders.

How did this global event come about?

Between March and July 2023, the EU AML/CFT Global Facility co-hosted and sponsored a series of regional consultations for nonprofit organisations (NPOs), FATF Regional Style Bodies and Financial Intelligence Units with the aim of collecting, documenting and analysing practices of meaningful engagement between the NPO sector and relevant (inter)governmental stakeholders. The outcome of these events has informed the ongoing FATF project on the Unintended Consequences of their AML/CFT framework on NPOs, and specifically the revision of the Best Practices Paper (BPP) on the implementation of Recommendation 8.

The events took place in Buenos Aires, Warsaw, Cape Town, Amman and Bali. Participants provided substantive input and feedback on the revision of the BPP to FSRBs, FIUs and the penholders of the BPP review initiative and, in turn, these stakeholders reflected on the practices showcased by NPOs in relation to the advancement of the review, coupled with a potential (technical) change to the Standard (Recommendation 8) itself.

Central to the discussions were: an approach that is  proportionate to the terrorism financing risk; the supervision of only those NPOs that are potentially at high risk for terrorism financing abuse; the prevention of wholesale bank de-risking of NPOs; and the necessity of meaningful engagement between NPOs and all relevant stakeholders within the  AML/CFT sphere.

By the end of the global conference now taking place in Bonn, participants will have decided on proportionate approaches to oversight of the sector and what meaningful engagement between NPOs and relevant stakeholders looks like.

❓ Background: The Financial Action Task Force (FATF) sets international AML/CFT standards for over 200 jurisdictions. FATF Recommendation 8 focuses on preventing the misuse of non-profit organisations (NPOs) for terrorism financing. However, its implementation has unintentionally burdened the NPO sector with overregulation and financial exclusion. This conference explores solutions to strike a balance between security and preserving civic space.