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Published online by Cambridge University Press: 23 December 2021
Counterterrorism architecture has grown exponentially in the last two decades, with counterterrorism measures impacting humanitarian, development, peacebuilding and human rights action across the world. Addressing and mitigating the impact of these measures take various forms in different contexts, local and global. This article will address one particular form of engagement and redressal – that of the multi-stakeholder dialogue process – to deal with the unintended consequences for civil society of countering the financing of terrorism rules and regulations. The impact is seen in the difficulties that non-profit organizations face across the world in terms of financial access. Involving civil society, banks, government, financial intelligence, regulators, supervisors and banking associations, among others, in a dialogue process with clearly defined objectives is considered by policymakers and civil society to be the most appropriate and effective form of engagement for dealing with and overcoming this particular set of challenges. Multiple examples are provided of ongoing initiatives, with the nuances of each drawn out for a closer look at the conditions needed to sustain such dialogue, and an examination of whether such stakeholder dialogue processes are fit for purpose for solving the seemingly intractable problem at hand.
1 Charity & Security Network, “World-Check: The Dangers of Privatizing Terrorist Lists”, 11 February 2016, available at: https://charityandsecurity.org/financial-access/worldcheck_private_databases_raise_concerns/; Tamsin Allen, “World Check Database: Due Diligence or Blacklist?”, Bindmans, 27 September 2016, available at: https://inforrm.org/2016/09/27/word-check-database-due-diligence-or-blacklist-tamsin-allen/; Peter Oborne, “Why Majed al-Zeer's Case Against World-Check Matters”, Middle East Eye, 21 January 2019, available at: https://www.middleeasteye.net/opinion/why-majed-al-zeers-case-against-world-check-matters; Tom Keatinge, “Who Checks World-Check? It's High Time Someone Did”, Middle East Eye, 2 February 2017, available at: https://www.middleeasteye.net/opinion/who-checks-world-check-its-high-time-someone-did (all internet references were accessed in December 2021).
2 Fiona de Londras, “Politics, Accountability and Counter-Terrorism Review”, University of Birmingham Blogs, 26 July 2018, available at: https://blog.bham.ac.uk/counterterrorismreview/2018/07/26/politics-accountability-and-counter-terrorism-review/; Fionnuala Ní Aoláin, “My Priorities as UN Special Rapporteur on Counter Terrorism: The Problem of Permanent Emergencies”, Just Security, 9 October 2017, available at: https://www.justsecurity.org/45640/priorities-special-rapporteur-counter-terrorism-problem-permanent-emergencies/; Ben Saul, “The Legal Black Hole in United Nations Counterterrorism”, IPI Global Observatory, 2 June 2021, available at: https://theglobalobservatory.org/2021/06/the-legal-black-hole-in-united-nations-counterterrorism/.
3 The Norwegian Refugee Council and Islamic Relief Worldwide are members of the Global NPO Coalition on the Financial Action Task Force (FATF). This is a loose coalition of over 300 NPO networks and organizations that engages the FATF to ensure that countries apply the FATF AML/CFT standards in a proportionate and effective manner based on a risk-based and not a rule-based approach. See Global NPO Platform on FATF, “Global NPO Coalition on FATF (Financial Action Task Force)”, available at: www.fatfplatform.org.
4 Norwegian Refugee Council, “Counterterrorism Measures”, Position Paper, January 2019, Humanitarian Principles section, p. 2, available at: https://www.nrc.no/globalassets/pdf/position-papers/counterterrorism-measures_position-paper.pdf.
5 Overseas Development Institute (ODI), “Humanitarian Negotiations with Armed Non-State Actors: Key Lessons from Afghanistan, Sudan and Somalia”, 18 March 2014, available at: https://odi.org/en/publications/humanitarian-negotiations-with-armed-non-state-actors-key-lessons-from-afghanistan-sudan-and-somalia/; Eva Svoboda, “Strengthening Access and Proximity to Serve the Needs of People in Conflict”, Humanitarian Policy Group, 2015, available at: https://cdn.odi.org/media/documents/9737.pdf; Voluntary Organisations in Cooperation in Emergencies (VOICE), “The Impact of EU Sanctions and Restrictive Measures on Humanitarian Action”, Workshop Report, 2019, p. 16, available at: https://www.dgecho-partners-helpdesk.eu/download/dgechoblock/2188.
6 Global Center on Cooperative Security, “Ensuring the Effective Implementation of Countering the Financing of Terrorism Measures While Ensuring Civic Space”, Concept Note, October 2020, available at: https://www.globalcenter.org/project-descriptions/ensuring-the-effective-implementation-of-countering-the-financing-of-terrorism-measures-while-safeguarding-civic-space/; International Committee of the Red Cross, “Counter-Terrorism Measures must not Restrict Impartial Humanitarian Organizations from Delivering Aid”, 12 January 2021, available at: https://www.icrc.org/en/document/counter-terrorism-measures-must-not-restrict-impartial-humanitarian-organizations; Emile van der Does de Willebois, “De-Risking Impedes Access to Finance for Non-Profit Organizations”, World Bank Blogs, 24 February 2017, available at: https://blogs.worldbank.org/psd/de-risking-impedes-access-finance-non-profit-organizations.
7 Regarding regulatory requirements for NPOs under AML/CFT laws in Spain, see Hanna Surmatz, “EFC/WINGS Webinar – November 8th: How Can Philanthropy Engage Around FATF Money Laundering and Terrorism Financing Policy and Implementation?”, available at: http://wings.issuelab.org/resources/29200/29200.pdf.
8 De Nederlandsche Bank, “Customer Due Diligence on Foundations with Respect to Terrorist Financing”, 21 June 2018, available at: https://www.dnb.nl/en/sector-information/supervision-laws-and-regulations/laws-and-eu-regulations/anti-money-laundering-and-anti-terrorist-financing-act/customer-due-diligence-on-foundations-with-respect-to-terrorist-financing/.
9 Global NPO Platform on FATF, above note 3.
10 HSC, “Queen Maxima Discusses De-Risking of NPOs”, available at: https://www.hscollective.org/news/timeline/queen-maxima-discusses-derisking-of-npos/?acceptCookies=60a37eee04d6c; World Bank Group and ACAMS, “Stakeholder Dialogue on De-Risking: Findings and Recommendations”, 2016, available at: http://documents1.worldbank.org/curated/en/397411476868450473/pdf/109337-WP-StakeholderDialogueonDerisking-PUBLIC-ABSTRACT-SENT.pdf. De-risking of NPOs documentation focuses primarily on cross-border and international payments. It should be noted that it also occurs within countries. On this issue in this empirical study carried out in Brazil, Mexico and Ireland, see Global NPO Coalition on FATF, “New HSC/ECNL Research Report: Understanding the Drivers of ‘De-Risking’ and the Impact on Civil Society Organizations”, 20 April 2018, available at: https://fatfplatform.org/news/new-hsc-ecnl-research-report-understanding-the-drivers-of-de-risking-and-the-impact-on-civil-society-organizations/. Financial Conduct Authority, “De-Risking: Managing Money-Laundering Risk”, 24 February 2016, available at: https://www.fca.org.uk/firms/money-laundering/derisking-managing-risk.
11 Bank of International Settlements Committee on Payments and Market Infrastructure, “Cross-Border Retail Payments”, February 2018, available at: https://www.bis.org/cpmi/publ/d173.pdf; World Bank, “Defying Predictions, Remittance Flows Remain Strong During COVID-19 Crisis”, 12 May 2021, available at: https://www.worldbank.org/en/news/press-release/2021/05/12/defying-predictions-remittance-flows-remain-strong-during-covid-19-crisis; World Bank, “Migration and Remittances Data”, available at: https://www.worldbank.org/en/topic/migrationremittancesdiasporaissues/brief/migration-remittances-data; Global NPO Platform on FATF, “De-Risking & Financial Access”, available at: https://fatfplatform.org/issues/over-regulation-2/.
12 Blessing Adada Gaiya, “Issues in the Compilation and Analysis of Remittances in BPM6”, Bank for International Settlements, 17–18 February 2020, available at: https://www.bis.org/ifc/publ/ifcb52_11.pdf.
13 Lia van Broekhoven, Vanja Skoric and Ben Hayes, “De-Risking and Non-Profits: How do You Solve a Problem That No-One Wants to Take Responsibility For?”, 11 July 2017, available at: https://www.opendemocracy.net/en/de-risking-and-non-profits-how-do-you-solve-problem-that-n/; Lia van Broekhoven, “Derisking and Civil Society: Drivers, Impact and Solutions”, HSC, 2018, available at: https://www.hscollective.org/news/timeline/article-derisking-and-civil-society-drivers-impact-and-solutions/.
14 The bibliography of NPOs and financial access-related reports is available upon request; see HSC website, available at: www.hscollective.org. The most significant recent publications concerning de-risking of humanitarian NPOs include amongst others: InterAction, “Detrimental Impacts: How Counter-Terror Measures Impede Humanitarian Action”, April 2021, available at: https://www.interaction.org/wp-content/uploads/2021/04/Detrimental-Impacts-CT-Measures-Humanitarian-Action-InterAction-April-2021.pdf; VOICE, “Adding to the Evidence: The Impact of Sanctions and Restrictive Measures on Humanitarian Action”, 29 March 2021, available at: https://voiceeu.org/publications?string=The+impact+of+sanctions+and+restrictive+measures+on+humanitarian+action&start_date=&end_date=; Khaleel Desai, “Vulnerable People are Paying the Price as Bank ‘De-Risking’ Undermines Humanitarian Aid”, Islamic Relief Worldwide Blogs, 2020, available at: https://www.islamic-relief.org/vulnerable-people-are-paying-the-price-as-bank-de-risking-undermines-humanitarian-aid/; Alice Debarre, “Making Sanctions Smarter: Safeguarding Humanitarian Action”, International Peace Institute, 19 December 2019, available at: https://www.ipinst.org/2019/12/making-sanctions-smarter-safeguarding-humanitarian-action; Sherine El Taraboulsi-McCarthy, “Counter-Terrorism, Bank De-Risking and Humanitarian Response: A Path Forward”, Overseas Development Institute, 22 August 2018, available at: https://odi.org/en/publications/counter-terrorism-bank-de-risking-and-humanitarian-response-a-path-forward/.
15 FATF website, available at: https://www.fatf-gafi.org/; Nance, Mark T., “Re-Thinking FATF: An Experimentalist Interpretation of the Financial Action Task Force”, Crime, Law and Social Change, Vol. 69, 2018Google Scholar.
16 Egmont Group, “About the Egmont Group”, 2021, available at: https://egmontgroup.org/en; EUROPOL, “Financial Intelligence Units – FIU.net”, 7 December 2021, available at: https://www.europol.europa.eu/about-europol/financial-intelligence-units-fiu-net.
17 Caribbean Financial Action Taskforce, “Recommendation 29: Financial Intelligence Units”, June 2021, available at: https://www.cfatf-gafic.org/index.php/documents/fatf-40r/395-fatf-recommendation-29-financial-intelligence-units.
18 Information from a meeting with the Financial Intelligence Unit, compliance officers of banks and NPOs under Chatham House Rule in a European country.
19 FATF, “FATF Public Statement on the Situation in Afghanistan”, October 2021, available at: https://www.fatf-gafi.org/publications/fatfgeneral/documents/afghanistan-2021.html.
20 On Serbia, see United Nations Office of the High Commissioner for Human Rights, “Serbia's Anti-Terrorism Laws Being Misused to Target and Curb Work of NGOs, UN Human Rights Experts Warn”, 11 November 2020, available at: https://www.ohchr.org/SP/NewsEvents/Pages/DisplayNews.aspx?NewsID=26492&LangID=E; on Uganda, see Kenneth Kazibwe, “Govt Unfreezes Accounts of NGOs Accused of Terrorism Funding”, NilePost, 27 February 2021, available at: https://nilepost.co.ug/2021/02/27/govt-unfreezes-accounts-of-ngos-accused-of-terrorism-funding/; on Turkey, see Jonathan Spicer, “Finance Watchdog 'Grey Lists' Turkey in Threat to Investment”, Reuters, 21 October 2021, available at: https://www.reuters.com/business/finance-watchdog-grey-lists-turkey-threat-investment-2021-10-21; on Israel, see United Nations Security Council, “Identical Letters Dated 1 November 2021 From the Permanent Representative of Israel to the United Nations Addressed to the Secretary-General and the President of the Security Council”, 1 November 2021, available at: https://undocs.org/pdf?symbol=en/S/2021/915; and United Nations Office of the High Commissioner for Human Rights, “Israel's ‘Terrorism’ Designation an Unjustified Attack on Palestinian Civil Society – Bachelet”, 26 October 2021, available at: https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=27708&LangID=E.
21 HM Treasury and Home Office, UK, “National Risk Assessment of Money Laundering and Terrorist Financing 2017”, October 2017, available at: https://www.gov.uk/government/publications/national-risk-assessment-of-money-laundering-and-terrorist-financing-2017; Henk van der Veen, Lars Franciscus Heuts and Erik Leertouwer, “Dutch National Risk Assessment on Terrorism Financing 2019”, WODC, November 2020, available at: https://www.researchgate.net/publication/348382454_Dutch_National_Risk_Assessment_on_Terrorist_Financing_2019; German Federal Ministry of the Interior, Building and Community, “Sectoral Risk Assessment: Terrorist Financing Through (the Abuse of) Non-Profit Organisations in Germany 2020”, 2 March 2021, available at: https://www.bmi.bund.de/SharedDocs/downloads/EN/publikationen/2020/sectoral-risk-assessment.pdf?__blob=publicationFile&v=5; Global NPO Coalition on FATF, “Stories: Tunisia: Lessons of a Successful Multi-Stakeholder Engagement Process”, 2021, available at: https://fatfplatform.org/stories/tunisia-lessons-in-a-successful-multistakeholder-engagement-process/.
22 If a country has performed an assessment that concludes that the entire sector is at risk for terrorism financing and has been broadly regulated to prevent abuse, the evaluators will criticize the methodology applied for having been insufficiently specific to determine which sub-set is at risk. This happened to Australia in their country evaluation in 2014. See FATF and Asia/Pacific Group on Money Laundering (APG), “Terrorist Financing and Financing of Proliferation”, in Anti-Money Laundering and Counter-Terrorist Financing Measures – Australia, Fourth Round Mutual Evaluation Report, FATF, Paris and APG, Sydney, 2015, available at: https://www.fatf-gafi.org/media/fatf/documents/reports/mer4/4-Terrorist-Financing-and-financing-proliferation-Mutual-Evaluation-Australia-2015.pdf.
23 German Federal Ministry of the Interior, Building and Community, above note 21.
24 FATF, “FATF Methodology for Assessing Compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems”, November 2020, available at: https://www.fatf-gafi.org/publications/mutualevaluations/documents/fatf-methodology.html.
25 Michael Pisa, “Does the FATF Help or Hinder Financial Inclusion? A Study of FATF Mutual Evaluation Reports”, Center for Global Development, 23 May 2019, available at: https://www.cgdev.org/publication/does-financial-action-task-force-fatf-help-or-hinder-financial-inclusion-study-fatf.
26 Accountancy Van Morgen, “Rabobank Must Accept Palestinian Aid Foundation to Provide Auditor's Report”, 3 September 2021, available at: https://www.accountancyvanmorgen.nl/2021/09/03/rabobank-moet-palestijnse-hulpstichting-als-klant-houden-door-accountantsverklaring/.
27 Norwegian Refugee Council, “Toolkit for Principled Humanitarian Action: Managing Counterterrorism Risks”, 27 May 2020, available at: https://www.nrc.no/toolkit/principled-humanitarian-action-managing-counterterrorism-risks/.
28 The self-assessment tool has not yet been made public; see Start Network, “A New Era of Humanitarian Action”, available at: https://startnetwork.org/. TechSoup presented the tool in this recording during Humanitarian Networks and Partnerships Week (HNPW): Islamic Relief Worldwide, “HNPW: Financial De-risking & Humanitarian Impact – Protecting NGOs Ability to Support the Vulnerable”, available at: https://www.youtube.com/watch?v=NOzLXamQ2g8.
29 Global Governance Centre at The Graduate Institute, Geneva, “Compliance Dialogue on Syria-Related Humanitarian Payments”, available at: https://www.graduateinstitute.ch/research-centres/global-governance-centre/compliance-dialogue-syria-related-humanitarian-payments; Justine Walker, “Risk Management Guide for Sending Humanitarian Funds to Syria and Similar High-Risk Jurisdictions”, May 2020, available at: https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/200526-risk-management-guide_en_0.pdf.
30 VOICE, above note 14.
31 K. Desai, above note 14.
32 FATF, “FATF Guidance: Anti-Money Laundering and Terrorist Financing Measures and Financial Inclusion, With a Supplement on Customer Due Diligence”, available at: http://www.fatf-gafi.org/media/fatf/Updated-2017-FATF-2013-Guidance.pdf.
33 FATF, “FATF Report to the G20 Leaders’ Summit”, November 2018, para. 32, available at: https://www.fatf-gafi.org/media/fatf/documents/reports/Report-G20-Leaders-Summit-Nov-2018.pdf.
34 FATF, “Statement by the FATF President: COVID-19 and Measures to Combat Illicit Financing”, available at: https://www.fatf-gafi.org/countries/a-c/china/documents/statement-covid-19.html.
35 FATF, “Mitigating the Unintended Consequences of the FATF Standards”, available at: https://www.fatf-gafi.org/publications/financialinclusionandnpoissues/documents/unintended-consequences-project.html.
36 E. van der Does de Willebois, above note 6.
37 German Federal Ministry of the Interior, Building and Community, above note 21, p. 49.
38 HM Treasury and Home Office, UK, above note 21, para. 12.8.
39 David Anderson QC, Independent Reviewer Of Terrorism Legislation, “Terrorism Prevention and Investigation Measures in 2012”, March 2013, available at: https://www.legislationline.org/download/id/4605/file/terrorism%20prevention%20and%20investigation%20measures%20in%202012_independent%20reviewer_2013.pdf.
40 World Bank Group and ACAMS, “Stakeholder Dialogue on De-Risking: Supporting Financial Access for Humanitarian Organizations and Charities”, 2017, available at: https://documents1.worldbank.org/curated/pt/538271487141265874/pdf/112804-WP-SupportingFinancialAccessforHumanitarianOrganizationsandCharities-PUBLIC-ABSTRACT-SENT.pdf.
41 Sue E. Eckert, Kay Guinane and Andrea Hall, “Financial Access for U.S. Nonprofits”, Charity & Security Network, February 2017, available at: https://www.charityandsecurity.org/system/files/FinancialAccessFullReport_2.21%20(2).pdf.
42 Consortium for Financial Access, “Banking Nonprofit Organizations – The Way Forward”, Charity & Security Network, June 2019, available at: https://www.moneylaundering.com/wp-content/uploads/2019/06/ACAMS.Report.NPOs_.060119.pdf.
43 Netherlands Ministry of Finance, World Bank Group and HSC, “International Stakeholder Dialogue: Ensuring Financial Services for Non-Profit Organizations”, 15 February 2018, available at: https://fatfplatform.org/assets/Final-Report_Feb-15.pdf and at: https://www.hscollective.org/assets/Final-Report_Feb-15.pdf.
44 Global NPO Coalition on FATF, “High-Level Discussion on De-Risking, Side Event at G20 Summit”, 11 December 2018, available at: https://fatfplatform.org/news/high-level-discussion-on-de-risking-side-event-at-g20-summit/; Global NPO Coalition on FATF, “C20 Japan: Financial and Security Constraints for CSOs”, 14 May 2019, available at: https://fatfplatform.org/news/5122-2/; HSC, “C20 Panel on the Financial Integrity/Financial Inclusion Conundrum”, 11 November 2020, available at: https://www.hscollective.org/news/timeline/c20-panel-on-the-financial-integrityfinancial-inclusion-conundrum/; Global Partnership for Financial Inclusion, “G20 2020 Financial Inclusion Action Plan”, October 2020, available at: https://www.gpfi.org/sites/gpfi/files/sites/default/files/G20%202020%20Financial%20Inclusion%20Action%20Plan.pdf.
45 Netherlands Ministry of Finance, World Bank Group and HSC, above note 43.
46 See HSC, “New Report: A Business and Human Rights Perspective on Bank De-risking of Non-Profit Clients”, 2021, available at: https://www.hscollective.org/news/timeline/new-report-a-business-and-human-rights-perspective-on-bank-de-risking-of-non-profit-clients/; and NYU Paris EU Public Interest Clinic, “Bank De-Risking of Non-Profit Clients: A Business and Human Rights Perspective”, June 2021, available at: https://www.hscollective.org/assets/Uploads/NYU-HSC-Report_FINAL.pdf.
47 Duke Law and Women Peacemakers Program, “Tightening the Purse Strings: What Countering Terrorism Financing Costs Gender Equality and Security”, March 2017, available at: https://law.duke.edu/sites/default/files/humanrights/tighteningpursestrings.pdf; Gender, Peace & Security Working Group of WO=MEN Dutch Gender Platform and HSC, “Protecting us by Tying our Hands: Impact of Measures to Counter Terrorism Financing on Dutch NGO's Working on Women's Human Rights and Gender Equality”, April 2019, available at: https://www.hscollective.org/assets/Uploads/2019-04-Protecting-us-by-tying-our-hands.pdf.
48 FATF, “Mitigating the Unintended Consequences of the FATF Standards”, 2021, available at: http://www.fatf-gafi.org/publications/financialinclusionandnpoissues/documents/unintended-consequences-project.html.
49 Global Counterterrorism Forum, “Good Practices Memorandum for the Implementation of Countering the Financing of Terrorism Measures While Safeguarding Civic Space”, September 2021, available at: https://www.thegctf.org/Portals/1/Documents/Links/Meetings/2021/19CC11MM/CFT%20GP%20Memo/CFT%20Memo_ENG.pdf?ver=fahs72ucLyyYOTj7WDwBkQ%3d%3d.
