The project was completed in 2013.
CTITF Working Group on Tackling Financing of Terrorism launched a project on identifying risks to the NGO sector from terrorist financing typologies and explored ways to safeguard the sector. Final report here.
Terrorism Financing typologies show that one of the way in which terrorists obtain funds is through non-profit organizations (NPOs). They give examples of NPOs being used to raise, transfer and divert funds for terrorist purposes. They also identify terrorist organizations posing as legitimate NPOs.
The Financial Action Task Force (FATF) adopted, in October 2001 (Special Recommendation VIII) asked countries to review the adequacy of laws and regulations that relate to entities that can be abused for the financing of terrorism and ensure that NPOs are not misused by terrorists. This should be done while “safeguarding and maintaining the practice of charitable giving and the strong and diversified community of institutions through which it is operated”.
This broad and general language does not specify how the review and adoption of standards can be done. The FATF became aware that the diversity of the NPO sector and the differences in the level of oversight among countries as well as the lack of clear indications of concrete measures to be implemented required additional guidance and published a Best Practice Paper in 2002 that offered a range of options for preventing the misuse of NPOs for terrorist purposes. After 2002, however, FATF members continued to indicate their difficulties in implementing SR VIII and an interpretative note was issued in 2006.
In monitoring the implementation of paragraph 1d) of the resolution 1373 (2001) that asks States to prohibit entities within their territories from making any fund available to terrorists, CTED is, from its dialogue with States and on-site visits, collecting a lot of information on countries’ approaches to review their NPO sector.
In particular, during its focused visit to the United Kingdom from the 17 to 19 November 2008, the delegation from CTED met with the Charity Commission and noted that it has “achieved a high level of success in its work to regulate and cooperate with charities with a view to preventing their abuse for terrorist financing”. CTED also noted that the Charity Commission “implements an efficient and wide-reaching international capacity-building programme, and is also working successfully with other States to improve the regulation of NPOs overseas”.
Moreover, numerous entities of the CTITF Working Group on Tackling the Financing of Terrorism (including CTED, the IMF, the World Bank, and UNODC) have done prior research on the role of NPOs and charities in terrorism financing.
Building on its prior work, notably its 2009 report which highlighted the risk of terrorism financing in the non-profit sector, the CTITF Working Group on Tackling the Financing of Terrorism, under the leadership of the Counter-Terrorism Committee Executive Directorate (CTED), will facilitate a meeting of an expert working group and a series of regional workshops relating to the risk of terrorism financing through the abuse of the non-profit sector (NPOs).
The long-term impact of this project will allow national and regional professionals in this field and government policy-makers will be able to use best practices and methodologies to create and implement effective and mutually agreeable frameworks for the non-profit sector to address terrorist financing. This will strengthen the defences of the non-profit sector against the risk of terrorism financing and deny terrorist organizations access to the provision of funds from donors to legitimate charities. It will also raise awareness in governments of the need to remain vigilant and to help increase the transparency and accountability of the non-profit sector.
How was the project designed?
This is a three-phase project.
Phase 1: involved a first expert working group meeting, held in London in January 2011. It was intended to share standards and best practices for protecting the non-profit sector from being used to finance terrorism.
Phase 2: involved organization of three regional workshops in order to disseminate the findings and recommendations from the expert group meeting. These regional workshops are targeted at regions in which they are hosted to address region-specific threats and raise awareness about pertinent standards and best practices arising from the expert group meeting. The aim is to involve governments, regulatory bodies and other competent authorities that regulate charities and non-profit organizations at the local level.
Phase 3: is facilitating sustainability of the outputs of the expert working group meeting and the regional workshops by encouraging regional and international cooperation, as well as by supporting follow-up meetings and training sessions arranged and hosted by participants in regions already targeted. This phase was completed in 2013.
What were the planned outputs of these meetings?
Outputs from the expert working-group meeting included:
- A discussion paper discussing emerging regulatory models and practices for this sector.
- Increased awareness of the terrorism financing risks posed to the non-profit sector and of challenges faced in preventing the abuse of non-governmental organizations.
- Increased understanding and discussion of standards and best practices used to regulate non-profit sector.
- Enhanced sharing of information and knowledge about counter-terrorism financing tools.
- Expanded international cooperation and networking between professionals working in this field.
As a result of the three regional workshops participants will:
- Increase their ability to assess the non-profit sector in their region/countries and analyze the threat of terrorism financing.
- Learn what approaches would mitigate the risk in their region/countries and adopt a mechanism for monitoring their national NPO sector.
- Learn how to build cooperative and effective relationships with their NPO sectors and work in consultation to implement regulatory frameworks.
- Have access to a discussion paper mapping emerging challenges for regulation of this sector in their region.
The project was funded by Canada, Switzerland, New Zealand, Sweden and the UK.