In May 2024, the EU adopted a new legislative package to better align rules on anti-money laundering and countering the financing of terrorism (AML/CFT) across Member States, with implementation planned for July 2027. While the reform aims to address emerging risks, it raised significant concerns for the civil society sector. In particular, stricter due diligence requirements could lead to increased scrutiny of human rights defenders and organisations, making it harder for them to open bank accounts. In addition, bringing crowdfunding platforms under these rules introduces new compliance burdens, which puts pressure on smaller, donation-based platforms. This may discourage donations and reduce fundraising options for non-profits.
We identified an important opening, as the detailed Regulatory Technical Standards and guidelines are still being developed. Because these define the exact scope of the obligations, this has been a crucial stage to get involved. Together with the Human Security Collective, Philea, Civil Society Europe and the European Fundraising Association, ECNL engaged constructively with the European Banking Authority, and successfully secured key improvements to these technical rules - helping to ensure they better reflect the realities of civil society and vulnerable communities.
The most important change was that having nonprofits as clients no longer increases the risk profile of banks and other financial institutions – an important safeguard against unnecessary refusals of services. Similarly, philanthropic projects are no longer treated as riskier than other types of crowdfunding initiatives. This means that a charity or public-interest campaign trying to raise money - whether for community support or human rights work - should be able to use crowdfunding platforms on the same terms as any other project, without facing unfair barriers, delays, or refusals simply because of the cause it represents.
Another systemic shift is the increased flexibility in identifying groups, such as asylum seekers, refugees or stateless persons, who may not have standard identification documents for legitimate reasons. Financial institutions can now rely on alternative, credible ways to verify a customer’s identity, making this a significant step toward financial inclusion for people who would otherwise struggle to open a bank account.
These changes demonstrate the value of early, cross-sector engagement in shaping technical rules that have far-reaching consequences for civic space. ECNL will continue to engage with the emerging AML Authority and monitor the remaining standards to ensure implementation remains proportionate, risk-based, and supportive of civil society.
The difference this work made:
- Improved civil society’s access to financial services.
- Philanthropic projects are no longer considered to have higher risk than other types of crowdfunding initiatives.
- People in vulnerable situations, such as those forced to flee and not having standard identitification documents, have easier access to financial services.
Image: Nadia Nadesan & Digit / https://betterimagesofai.org