29 March 2021

FATF collects information on the incorrect implementation of its policy

The Financial Action Task Force (FATF) launched a new project to study and mitigate the unintended consequences resulting from the incorrect implementation of the FATF Standards. The philanthropy sector and the wider NPO Coalition on FATF clearly welcome this new initiative, which can be seen in the context of recent cases of incorrect implementation of FATF policy in Turkey and in Serbia. In the case of Serbia, the FATF even reminded the government that overregulation is not in line with its recommendations.

The FATF will conduct the project in two phases:

Phase One: research and engagement. The project team will analyse unintended consequences resulting from the misuse of the FATF’s standards. Results will be shared with the FATF plenary in June.

Phase Two: solutions. The second phase will develop options the FATF could consider to prevent and mitigate these unintended consequences.

The new FATF project will focus on four main areas:

  1. De-risking, or the loss or limitation of access to financial services, which has affected non-profit organisations (NPOs);
  2. Financial exclusion, a phenomenon whereby individuals are excluded from the formal financial system and denied access to basic financial services;
  3. Suppression of NPOs or the NPO sector as a whole through non-implementation of the FATF’s risk-based approach;
  4. Threats to fundamental human rights stemming from the misuse of the FATF Standards or AML/CFT assessment processes to enact, justify, or implement laws, which may violate rights such as due process or the right to a fair trial.

The FATF welcomes input to inform this project, including, for example, scholarly research; industry and civil society perspectives; and documented instances of unintended consequences. Information may be sent to pscf@fatf-gafi.org. Contributions would be most relevant for Phase One if submitted on or before 20 April 2021. See also on the FATF website. We will as the Global NPO Coalition on FATF also collect information and submit it to FATF. Feel hence free to send your input directly to FATF or send it to hsurmatz@efc.be or the FATF NPO coalition npos@fatfplatform.org. Leaarn more here or join our FATF coalition effort here.