On November 20-21, Spaces for Change| S4C organized a two-day Learning and Practice Workshop (LPW) on Financial Action Task Force (FATF) Recommendation 8 (R8) which united stakeholders in Ghana and Nigeria involved in preventing and countering the financing of terrorism (CFT) in the non-profit sector to share experiences, knowledge and information regarding the domestic implementation of FATF’s R8 and developing proportionate regulatory measures for Ghanaian charities in line with the risk-based approach. Co-hosted together with Ghana’s Financial Intelligence Centre (FIC) and the Ghana Non-Profit Organization Secretariat (NPOS), participants at the LPW held in Accra, Ghana, comprised 25 representatives of government departments, security agencies, regulatory bodies, civil society and members of the Civil Society Working Group on the NPO National Risk Assessment.
Within the next few months, Ghana will be publishing the findings of the country’s Terrorism Financing (TF) national risk assessment (NRA) in compliance with FATF Recommendation 8 which will lay the foundation for identifying and mitigating risks within the non-profit sector in Ghana. The two-day workshop leveraged the Nigerian experience to increase the capacities of Ghanaian national authorities to implement R8 correctly and secure a COMPLIANT rating for the country just like Nigeria. Along this line, the workshop delved into Ghana’s current FATF rating on R8, identified gaps within the context of the current rating, and proffered recommendations for implementing proportionate and targeted measures based on the outcomes of the risk assessment.
Experts from Nigeria, Netherlands and the United Kingdom elucidated key principles of FATF’s R8 and global best practices for conducting participatory NRA exercises. Since the September 9, 2011 terrorist bombing in the United States of America, the world has witnessed a global tightening of the civic space resulting from the drastic implementation of numerous anti-money laundering and countering the financing of terrorism (AML/CFT) initiatives and measures. Countries have implemented these measures in ways that produced negative consequences and chilling effects on NPOs, making it difficult for them to operate and carry on their humanitarian and charitable operations. Against this backdrop, the LPW focused on sharing knowledge and tools for conducting a proper risk-based assessment according to global best practices and also applying focused and proportionate measures targeted at the identified risks, without disrupting the legitimate operations of charitable entities.
On the processes for conducting NRA, participants gleaned from the Nigerian experience. Officials and technical experts from Nigeria extensively discussed the steps, procedures and mechanisms the country put in place, enabling it to move from a NON-COMPLIANT to a COMPLIANT rating on FATF R8. Most importantly, Nigerian terrorism financing risk assessment was conducted with the strong participation of civil society and NPOs operating in diverse regions of the country. Nigeria also revised its AML/CFT legal regimes which classified NPOs as obliged reporting entities which means that NPOs in Nigeria are exempted from the onerous compliance requirements vested on Designated non-financial Institutions (DNFIs) on account of their high-risk spectrum to money laundering and terrorism financing. Additionally, Nigeria developed targeted regulations for the subsets of NPOs which the NRA identified to be at risk of terrorism financing, departing from the previous practice of blanket application of AML/CFT regimes to the entire universe of NPOs operating in the country.
Experts also walked Ghanaian counterparts on the roles of NPOs before, during and after NRA. Drawing again from the Nigeria experience, S4C’s research, Unpacking the Official Construction of Risks and Vulnerabilities for the Third Sector in Nigeria triggered an overhaul of the NPO risk assessment process in Nigeria. The research revealed that the NRA conducted in 2016 fell short of FATF’s R8 and challenged the classification of NPOs as DNFIs. It recommended a separate NRA for the NPO sector to properly ascertain the level of terrorism financing risks within the sector. The massive interest the report generated laid the foundation for constructive engagement between government authorities and the NPO sector. It also addressed myths and misconceptions, strengthened capacity of actors, facilitated policy reforms that comply with FATF R8, culminating in the current COMPLIANT rating for Nigeria.
The workshop also covered other TF issues affecting NPOs such as bank de-risking, financial exclusion of NPOs and the next steps after the NRA. Since bank de-risking and financial exclusion often form part of the unintended consequences of implementing FATF R8, NPO leaders learned about the rudiments of self-regulation, know-your-customer (KYC), risk management analysis and due diligence to protect their organizations from terrorism financing abuse. Officials, on the other hand, learned about the risk mitigation strategies after NRA, the nitty-gritty of targeted outreaches, developing targeted regulation to monitor at-risk NPOs and continuous risk-based monitoring.
The LPW was organized with the support from the Mott Foundation, and in partnership with the NPO Global Coalition on FATF and Green Acre Associates.
