Public Consultations on a) the FATF Best Practice Paper to Combat the Abuse of Non Profit Organisations, and b) on the Revision of FATF Recommendation 8 and its Interpretive Note

The FATF launched a set of consultations in the context of the FATF Recommendation 8 on NPOs.
Indeed, as stated in the FATF Recommendations (last updated in February 2023), the revision of the standard on NPOs aims to provide clarity regarding the specific subset of NPOs that should be subjected to supervision and monitoring. This revision brings INR.8 in line with the FATF Typologies Report on the Risk of Terrorist Abuse of NPOs (June 2014) and the FATF Best Practices on Combatting the Abuse of NPOs (June 2015). These reports emphasize that not all NPOs pose a high risk and should fall under the purview of R.8. The objective is to enhance the implementation of R.8/INR.8 by.
Hence, the FATF consultations a two-fold:
On the one hand, the FATF is soliciting feedback on proposed updates to the BPP aimed at combating the abuse of NPOs. These updates are being considered in parallel with proposed amendments to Recommendation 8 and its Interpretive Note, which seek to provide clearer guidelines for implementing a risk-based approach.
The FATF has established a Project Team comprising delegations from FATF to review the BPP and gather relevant information. The proposed Guidance/BPP, now open for public consultation, incorporates the work of the Project Team, as well as input from members, stakeholders, and case studies highlighting best practices in countering NPO abuse.
Stakeholders, including practitioners, experts, financial institutions, and NPO sector representatives, are invited to provide their views and input on specific areas of interest. These include mitigating terrorist financing risks at the individual NPO level, implementing good governance practices to meet Recommendation 8 objectives, ensuring access to financial services for legitimate NPOs, and identifying misapplications of Recommendation 8.
Responses, along with any drafting proposals, should be submitted to FATF.Publicconsultation@fatf-gafi.org by 18 August 2023 (18:00 CET). Submissions should include the organization’s name, nature of activity, and contact details. It is important to note that all submissions received during the public consultation will be shared with FATF delegations. The provided contact information will only be used for the purpose of the consultation and any subsequent engagement on this issue.
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On the other hand, the FATF is currently considering amendments to Recommendation 8 of the FATF Standards and its Interpretive Note (R.8/INR.8) in order to protect NPOs from potential abuse related to terrorist financing.
The draft amendment text, which is now open for public consultation, aims to address the issue of excessive application of preventive measures to the NPO sector in certain countries. This over-application can have a detrimental impact on the legitimate activities of NPOs.
The FATF is actively seeking input from various stakeholders, including practitioners, experts, stakeholders from the NPO sector, and financial institutions. Of particular interest is feedback on paragraph 7(b)(iii) of the Interpretive Note, which currently lists examples of measures that countries can adopt for NPOs based on their exposure to terrorist financing risks.
Stakeholders are invited to choose the most suitable option from four alternatives provided. These options range from removing the examples and relocating them to the Best Practices papers, to transferring them to a footnote or summarizing them in a new footnote within the Interpretive Note. The final option is to retain the current wording and keep the examples in paragraph 7(b)(iii) of INR.8.
Responses, including any proposed draft amendments, should be submitted by 18 August 2023 (18:00 CET) to FATF.Publicconsultation@fatf-gafi.org. Submissions must include the organization’s name, nature of activity, and contact details. It is important to note that all submissions received during the public consultation will be shared with FATF delegations. The contact information provided will be used solely for the purpose of the consultation and future engagement on this matter.
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Submissions to both consultations will be shared with FATF delegations, and participants are asked to indicate their organization’s name, nature of activity, and contact details. Specific drafting proposals can be inserted directly into the draft text. The FATF has not yet approved the draft Guidance/BPP & draft amendment text to R.8/INR.8. They will consider the received views to revise the text before proposing its adoption at the FATF October 2023 Plenary.