FATF trying to prevent overuse of counter-terror financing rules in non-profit sector

The Financial Action Task Force is looking to revise its current recommendations aimed at safeguarding non-profit organisations from being abused for terrorist financing, to ensure that they do not hurt these organisations’ legitimate activities instead. The international anti-money laundering and anti-terror funding watchdog says that “7 of the Interpretative Note to Recommendation 8 lists examples of measures that countries can apply to NPOs according to their terrorist financing risks exposure. However, in view of their inclusion in the body of the Interpretative Note 8, these examples may have been perceived by some countries or jurisdictions as compulsory.” As per the FATF’s draft proposal, countries should develop an understanding of the different degrees of terrorist-financing risk posed to non-profits and the corresponding levels of mitigating measures they require. ‘Overly burdensome’ The draft text adds that countries should be mindful of the potential impact of measures on legitimate non-profit activities, and apply them where they are necessary to mitigate the assessed terrorist-financing risks, without “unduly disrupting or discouraging legitimate NPO activities”. “For NPOs identified to be at low risk of TF abuse, countries may focus only on the undertaking outreach concerning terrorist financing issues, and may decide to refrain from taking additional mitigating measures,” it adds.