Positive Updates out of Engagement with the Financial Action Task Force (FATF)

Thursday, July 9, 2015 - 1:56 pm
Katherine La Beau

Over the last two years, the Council has been actively engaging with the intergovernmental Financial Action Task Force (FATF) as they have taken steps that could shift the global regulatory environment for cross-border philanthropy.

FATF has a large impact on nonprofit activity worldwide because of its recommendation for anti-terrorist financing regulation of nonprofits, along with its Best Practices Paper for complying with the recommendation. For example, a recent FATF-inspired Mexican law, the subject of a Council conference call in early July 2015, places new burdens on grantmakers and grantees in Mexico. Starting in the fall of 2015, FATF will undertake an evaluation of U.S. laws and regulations on counterterrorism, including those that affect cross-border philanthropy. 

Recently, there have been several important developments in our work with FATF:

  • FATF Secretariat Memorandum. Working with the Charity & Security Network as a valuable partner and co-signatory, on July 6th the Council submitted a memorandum to the FATF Secretariat in advance of the U.S. evaluation to acclimate the FATF U.S. evaluation team to counterterrorism laws and regulations that impact the work of U.S.-based nonprofit organizations (NPOs). We also offered to meet with the evaluators when they arrive in the U.S. and convene a representative group of U.S. nonprofits and grantmakers to advise the team. You can read the full memorandum to the FATF Secretariat, along with the cover letter, here
  • Formal NPO Engagement with FATF. Last month, the Council, the European Foundation Centre, WINGS, and DAFNE co-signed a letter to the FATF President requesting adoption of a formal engagement process with the global nonprofit sector. At its June plenary, FATF agreed to formalize its engagement with NPOs, stating: “The FATF is committed to continuing a constructive engagement with NPOs on these important issues, and will continue doing so on an ad hoc basis, as needed, to facilitate its technical work. The FATF also agreed to enhance its engagement by holding an annual discussion with NPOs on specific issues of common interest.”
  • Updated Best Practices Paper: Also at the June plenary, FATF implemented its revised Best Practices Paper on Recommendation 8 for combatting the diversion of charitable funds to terrorist purposes. This final version incorporates nearly all revisions put forth by NPOs globally, including the Council, and is a positive development for the sector.

You can also learn more about FATF in a recent article by the Council’s partner, Kay Guinane of the Charity and Security Network.  

FATF is an important actor within the global regulation of philanthropy and its recommendations can significantly impact the flow of philanthropic funds across borders. The Council will continue to work with both FATF and U.S. policymakers on these and other global regulatory issues in our work to create a positive enabling environment for cross-border philanthropy around the world.


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