U4 Anti-Corruption Resource Centre

This Anti-Corruption Helpdesk brief was produced in response to a query from a U4 Partner Agency. The U4 Helpdesk is operated by Transparency International in collaboration with the U4 Anti-Corruption Resource Centre based at the Chr. Michelsen Institute.

Query

What are the unintended consequences of AML/CFT laws and regulations? Please provide an overview of incidents in which they have been used by governments to restrict civic space and infringe on human rights?

Summary

Civic space and human rights have been under assault across the world, and, in some settings, AML/CFT regulations have played a major role in legitimising and providing justification for these measures at the domestic level.

FATF’s law and policymaking processes do not provide any meaningful transparency or opportunities for civil society engagement, neither at the domestic, nor at the international level. With little input from human rights organisations and experts, the “counter-risks” of abuse and misappropriation for AML/CFT regulations only increase. Despite advances to FATF’s Recommendation 8, which concerns TF risks for non-profit organisations, significant issues remain. Measures taken under the guise of AML/CFT regulations include heavy restrictions on CSOs’ ability to register, operate, and access resources, as well as direct measures against specific CSOs, such as audits, investigations, prosecution, de-registration, closure and expulsion.

Caveat: this Helpdesk Answer was commissioned to subsidise contributions to FATF’s public consultation on the “unintended consequences” of AML/CFT regulations.

Contents

1. Overview of AML/CFT’s impact on civic space and human rights

a. Civil society’s role in countering terrorism and money laundering

b. Rising concerns about AML/CFT regulation abuse

2.FATF’s law-making process

a. Domestic repercussions

3. FATF and NPOs

a. Actual risks

b. De-risking

c. Restrictions on foreign donations

4. References

Authors

Guilherme France, tihelpdesk@transparency.org

Reviewers

Sophie Lemaitre (U4 Anti-Corruption Resource Centre)

Saul Mullard (U4 Anti-Corruption Resource Centre)

Jorum Duri (Transparency International)

Date

29/04/2021

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