Anecdotal evidence suggests a common misperception that nonprofit and civil society organisations (NPOs/CSOs) are vulnerable to money laundering (AML) abuse, providing the groundwork for AML laws to target legitimate civil society work.
New report, commissioned by the by the EU AML/CFT Global Facility, and written by Ben Evans (Greenacre Group) and ECNL’s Vanja Skoric, finds that there is actually little evidence of systemic or widespread abuse of CSOs for money laundering. Even allowing that most cases go undetected, the number of cases found was very small, in both absolute and relative terms.
The genesis of this report lies in discussions held within the Global CFT Expert Hub, as CSOs and activists highlighted an increase of AML measures restricting civil society. The report draws on a survey of observed cases of illicit financing in CSOs in 15 core countries: Argentina, Bulgaria, Cyprus, India, Indonesia, Jordan, Kenya, Kyrgyzstan, Mexico, Moldova, Nigeria, North Macedonia, Spain, Tunisia and the United Kingdom.
It also includes an analysis of the legal and regulatory regime for money laundering and CSOs. As the report finds there is no obvious correlation between the strictness of a jurisdiction’s money laundering regulations for CSOs, and the level of observed risk, and in many countries it remains unclear what was the basis of AML regulation for the sector.
Download the full report below: