The introduction of stringent anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations has brought CSOs in the Western Balkan region under heightened scrutiny, challenging their operational freedom and effectiveness. The new policy paper, written by the Balkan Civil Society Development Network in collaboration with ECNL, is the first compilation that discusses relevant international standards and analyses their legal and practical implications on CSOs’ legitimate activities in the countries of the region.
The paper coherently outlines recent challenges that CSOs have encountered due to the adoption of AML/CFT standards. These include the absence of a risk-based approach, the ambiguity in defining beneficial ownership, and issues with how banks handle CSO clients.
It also highlights best practices and solutions through examples from the region. It discusses how North Macedonia improved FATF compliance through collaboration between various stakeholders and implemented appropriate measures for CSOs. Similarly, it showcases Serbia’s efforts in building national coalitions with international support to push back against overregulation. Notably, for the first time, it charts the self-regulation efforts CSOs have undertaken, which provide valuable tools for mitigating the risk of terrorism or money laundering abuse. This underscores their critical role in ensuring compliance and enhancing CSOs' effectiveness, governance, accountability, and transparency.
It also presents comprehensive recommendations, tailored to regulatory authorities, financial institutions, and CSOs, as well as international bodies like FATF, MONEYVAL, and EU institutions, that CSOs can use to further advocate for the improvement of legal framework and removal of over-regulation when it comes to AML/CFT standards.