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Standing up Against Counter-Terrorism Measures that Constrain Civic Space

In close cooperation with a broad network of organizations, ECNL is co-leading engagement with the Financial Action Taskforce (FATF) regarding its recommendations and standards that contribute to shrinking civic space. Specifically, the Recommendation 8 sets out a broad framework for regulation of the non-profit sector (NPOs) to prevent abuse by terrorists. The premise is that NPOs are seen as being particularly vulnerable to abuse for the financing of terrorism in a number of ways that FATF Recommendation 8 sets out: e.g., by being a conduit for funds, by obscuring diversion of funds and by being a front for terrorist organisations.

This broad brush tarring of the entire sector is contrary to the evidence base and has been criticised widely by the NPO sector as well as donor community. In addition, Recommendation 8 has had numerous unintended consequences since some governments have tightened rules on the NPO sector beyond what is required under Recommendation 8. As a result, it’s application in these cases meant the shrinking of the financial, operational and political space of NPOs in particular and civil society in general. Additionally, the parts of civil society that are most affected are most likely to be the organisations working in high risk and high need areas on development, conflict transformation and human rights. This, ironically, is counterproductive to mitigating terrorist threats.

More on FATF: FATF is the Financial Action Task Force, an inter-governmental body established in Paris in 1989 by the Group of 7. It seeks to combat money laundering, terrorist financing and other threats to the international financial system. It is both a policy-making and enforcement body. Its Recommendation 8 pertains specifically to non-profit organisations, stating that:
Countries should review the adequacy of laws and regulations that relate to entities that can be abused for the financing of terrorism. Non-profit organisations are particularly vulnerable, and countries should ensure that they cannot be misused:
 (a) by terrorist organisations posing as legitimate entities;
 (b) to exploit legitimate entities as conduits for terrorist financing, including for the purpose of escaping asset-freezing measures; and
 (c) to conceal or obscure the clandestine diversion of funds intended for legitimate purposes to terrorist organisations.

Civil Society concerns:

  • Recommendation 8 sets out a broad requirement to regulate the non-profit sector as a whole for greater transparency and accountability. This has had numerous unintended consequences for non-profit organisations, not least the difficulties faced in accessing and distributing financial resources, cumbersome registering and licensing laws, and increased state surveillance and regulation.
  • Recommendation 8 also infringes on basic human rights, namely the right to freedom of expression and association and the right to privacy.
  • More generally, the FATF is not regulated by an international treaty or convention, yet its policy recommendations are globally enforceable through national legislation. This gives it enormous power and sway over global financial surveillance and regulation. It also given rise to fears of ‘policy laundering’, i.e., of states introducing surveillance/privacy-invasive measures to suit their agendas under the guise of implementing FATF standards.

ECNL is part of a transnational coalition of non-profit organisations seeking to highlight, stem and reverse the unintended consequences of the FATF’s policies on civil society space. To find out more about the FATF and its impact on civil society, please visit the dedicated platform on the subject.

A string of successes in changing global counter-terrorism policies that impact civic space

Financial Action Task Force says “yes” to formalised annual consultation with NPOs