Spaces for Change |S4C, in collaboration with the Special Control Unit Against Money Laundering (SCUML), with support from the Global Centre on Cooperative Security (GCCS), organized a two-day capacity-building workshop for non-governmental organizations (NGOs) in Nigeria’s South-East region. Held on September 17-18, 2024, the executive directors and finance officers of 50 NGOs operating in five states of the South-East region gained knowledge of the national and international regulatory frameworks applicable to charities, especially the terrorism financing risks associated with non-profit activities and how to mitigate them.
Several sessions held over the two days examined the nature and characteristics of vulnerabilities inherent in certain charitable activities that may increase NGO’s exposure to terrorism financing abuse. SCUML’s Terrorism Financing Risk Assessment (TFRA) on non-profit organizations (NPOs) in Nigeria conducted in 2021-2022 unpacks these risks and the subsets of charities where these inherent vulnerabilities are most significant. This laid the foundation for the various training sessions that increased participants’ understanding of the national and international regimes, including measures that have been put in place to combat money laundering and terrorism financing in the country.
Recognizing that NGOs can be inadvertently exploited for illegal purposes, including terrorism financing, the presentations by experts examined a wide range of scenarios and strategies for identifying risks within their organizations. Different sessions and exercises focused on strengthening internal governance systems, financial controls, sanction screening, risk mitigation, and regulatory compliance with anti-money laundering and countering financing of terrorism (AML/CFT), equipping participants with the tools necessary for navigating TF risks.
The event also underscored the operational challenges that many NPOs face due to the increasing regulatory pressures associated with the adherence to AML/CFT regulations, with constraining effects on the civic space. One key concern raised by participants was the “de-risking” practices of financial institutions, which have made it difficult for NPOs to access banking services in many localities. Many organizations struggle to meet regulatory demands, particularly the restrictions and hefty penalties imposed for minor compliance gaps. Representatives of regulatory bodies reassured that the intent of AML/CFT measures is not to hinder NPO operations, but rather to protect the sector from exploitation. The dialogue that ensued focused on balancing regulatory enforcement with preventing the disruption of the vital work of NPOs.
The workshop concluded with a set of key recommendations for enhancing the operational environment for NPOs. Among these recommendations were calls to eliminate overly punitive regulations, implementing fixed penalties in place of daily fines, and fostering greater synergy between regulators and charities. Participants expressed optimism that more initiatives of this kind would help build their capacity to meet compliance requirements while continuing their essential work in supporting communities across Nigeria. This workshop marks a critical step towards ensuring a secure and compliant non-profit sector in the South-East region.
