19 May 2023

Philea contributes to FATF Private Sector Consultative Forum

On 8 and 9 May 2023, Philea represented the philanthropic community at the annual Financial Action Task Force (FATF) Private Sector Consultative Forum (PSCF) in Vienna, together with the wider FATF NPO Coalition. Throughout the event, the Coalition successfully addressed issues of major concern for NPOs in relation to the FATF normative framework on anti-money laundering and counter-terrorism financing, as well as their implementation.

The revision of the FATF Best Practices Paper (BPP) on Recommendation 8 was discussed at the panel on ensuring financial access for Non-profit Organisations (NPOs), which focused on challenges and solutions from multiple stakeholder perspectives. Recommendation 8 deals with the risk of terrorism-financing for NPOs, and is particularly important for the tendency of banks to de-risk and therefore hinder financial access for NPOs.

The Public Consultation on the BPP will be a crucial step for non-profit actors to provide examples of good governance they have put in place to prevent money laundering and terrorism financing. The BPP will likely also include a list of bad practices put in place by governments. Philea will contribute to the Consultation, which should open in June, also on behalf of WINGS. From a longer-term perspective, Philea and the whole NPO Coalition on FATF will continue our advocacy efforts towards a change in Recommendation 8 itself, and the methodology so that overregulation and financial exclusion for NPOs can be finally called out.

A well-attended side event, organised by the NPO Coalition on FATF, allowed a deeper dive into these topics and a fruitful exchange between NPO, FATF, Member States and FATF-style regional bodies (FSRB) representatives. Topics included the role of sectoral self-regulation in mitigating risk, with the illustration of positive examples of risk assessments carried out by NPOs themselves, the revision of the BPP on Recommendation 8 (see above), and the new round of FATF country evaluations. The side event was also attended by the UN Special Rapporteur on counter-terrorism and human rights, Fionnuala D. Ní Aoláin and her team, to whom we are extremely grateful for their clear-eyed views on the role of the fundamental rights and freedoms in effective counter-terrorism, and continued support in all of the Coalition’s work.

Throughout the rest of the Forum sessions, Philea and other NPO Coalition members made multiple interventions from the floor, addressing inter alia concerns about privacy rights with the proliferation of Public-Private Partnerships and data biases in Artificial Intelligence-based systems used to gain operational efficiencies in fighting financial crime. Following a question from Hanna Surmatz, Philea’s Head of Policy, the session on Beneficial Ownership (BO) confirmed the need to identify the person directing the organisation as BO of a public-benefit organisation.