From India to Spain, civil society is becoming increasingly constrained, with the FATF – set up to combat financial crime – unwittingly restricting NGOs
The right to freedom of association and expression is not adequately protected in many countries.
Associate director for participation with the Open Society Human Rights Initiative.
Laws restricting the space for civic activism are proliferating at an alarming rate. In the past three years, more than 60 countries have proposed or passed over 100 laws restricting freedom of assembly or the foreign funding and activities of civil society organisations.
An array of forces is driving this trend, from perceived threats to national security to suspicion of foreign funding for civil society. But one unlikely and unwitting organisation that is partly to blame is largely unknown. The Financial Action Task Force (FATF), established by G7 countries to combat money laundering and terrorism financing, offers its seal of approval to nations that implement its security recommendations.
FATF’s seal of approval is no small thing. Even though the taskforce is not treaty-based and has no legal authority, more than 180 states have signed up to what is – in practice if not in law – a global convention.
FATF evaluations have been made with little scrutiny, transparency or public accountability
Countries in compliance with FATF recommendations are certified as safe places to do business; those not compliant risk being shunned by the global financial system. To date, FATF recommendations and evaluations have been made with little scrutiny, transparency or public accountability. Its meetings take place behind closed doors, the minutes of which are incomplete, and there are no mechanisms to gain further insight into its decision-making processes.
Our main concern is that the FATF’s regulations fail to take into account human rights – there are no meaningful safeguards for freedom of association and expression. As a result, countries that implement FATF regulations risk legitimising the repression of NGOs and civil society.
For example, when it comes to money laundering or supporting terrorist groups, there is no evidence that non-profits are particularly vulnerable to misuse. Yet the FATF has singled them out through a targeted regulation, special recommendation 8, which has had unintended consequences for the sector.
Recommendation 8 has led to increased surveillance and state regulation, difficulties in accessing and distributing financial resources, onerous and restrictive laws, and the reduction of civil society space. In short, it has strengthened existing state tools used to clamp down on civil society.
Even worse, the FATF has welcomed regulatory steps by countries that restrict civil society, from Spain and India to those with more restrictive regimes such as Colombia, Indonesia, Mexico, Saudi Arabia and Uzbekistan.
However, a recent breakthrough may remedy these unintended consequences. In July, a global coalition of Open Society grantees announced that the FATF had agreed to meet regularly with civil society groups and organise ad hoc exchanges on technical matters.
The FATF also committed to respecting international obligations regarding freedom of association, assembly and expression, as well as humanitarian law; implementing a more targeted approach to identifying those at risk of money laundering and terrorism financing; and recognising that no additional regulations should be applied if existing legislation and self-regulation mechanisms are sufficient.
Since not all non-profit organisations are at risk of abuse, the FATF further agreed that any counter-terrorism measures should not apply to the entire non-profit sector, and that government over-regulation s not a desirable outcome of implementing FATF standards.
This breakthrough constitutes the start of the coalition’s work with the FATF. We hope to improve its regulations, policies and assessment practices, and mitigate their negative effects.
In the weeks and months to come, the coalition will push for clear rules of engagement so that NGOs can participate in the drafting and revision of FATF recommendations. By involving civil society, the FATF has an opportunity to become more effective and respectful of rights, while recognising civil society for what it is – the cornerstone of an open society.
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