FATF Paper to Combat the Abuse of Non Profit Organisations

FATF Paper to Combat the Abuse of Non Profit Organisations

The FATF is consulting all interested stakeholders in advance of finalizing the Guidance/BPP. 

The Financial Action Task Force (FATF) says it is considering proposals for the update of the FATF Best Practice Paper to Combat the Abuse of Non Profit Organizations (NPOs). This project is being undertaken in parallel to the proposed amendments to Recommendation 8 and its Interpretive Note (also under public consultation) to better clarify the implementation of a risk-based approach.

In June 2022, the FATF Plenary agreed to review the Best Practice Paper and established a Project Team of FATF delegations to consider the necessary changes and gather relevant information.

According to FATF, the Guidance/BPP proposed for public consultation reflects the work and discussion of the Project Team, as well as members’ and other stakeholders’ input of relevant case studies and data on best practices to combat the abuse of NPOs.

The FATF is consulting all interested stakeholders in advance of finalizing the Guidance/BPP. Views from practitioners, experts and stakeholders from the NPO sector and the financial institutions are being invited.

Of particular interest, comments and additional input is invited regarding:

Mitigating TF risk at an NPO individual level (section 3.2 and Annex B of the BPP);

Implementing good governance at an NPO individual level to meet R.8 objectives (section 3.4 and Annex B of the BPP);

Financial institutions’ initiatives to ensure access of legitimate NPOs to financial services, including risk-based mitigating measures (section 4.2 and Annex C of the BPP);

NPOs and donors’ initiatives to ensure access of legitimate NPOs to financial services (section 4.3 and Annex C of the BPP); and

Examples of misapplication of R.8, to identify avoidable practices and to help countries, financial institutions and NPOs correctly implement the risk-based approach.

You can provide your response, including any drafting proposals, by 18 August 2023. At this stage, the FATF says it has not approved the draft Guidance/BPP and will consider the views received to revise the text before its proposal for adoption at the FATF October 2023 Plenary.