01 July 2016
Most people have never heard of “Recommendation 8,” the regulation intended to protect the nonprofit sector from abuse through terrorist financing. It’s a technical section of an esoteric regulatory system that governs the global flow of money.
Until this month, it was also a flawed regulation that left civil society vulnerable to illegitimate government crackdowns.
Created by the Financial Action Task Force (FATF), the regulatory body established to combat money laundering and funding for terror, the aim of Recommendation 8 may have been well intentioned. But its actual impact has been insidious, as governments have used it to justify undue restrictions on civil society, from increased state surveillance to restrictions on foreign funding for development, conflict resolution, and human rights work.
Its use as a tool for limiting civic space may soon end, however. Earlier this month, the FATF adopted a rewritten version of the standard, the culmination of an almost three-year effort by the Non Profit Platform on the FATF, a coalition of Open Society Foundations grantees that engaged and worked with the task force.
According to the FATF, “The revised standard aims to ensure that the implementation of Recommendation 8 … does not disrupt or discourage legitimate nonprofit activities.”
The European Center for Not-for-Profit Law, a coalition member, hailed the revisions as a victory for the nonprofit sector, saying it removes the argument for misusing or misinterpreting the FATF standard for the purpose of closing civic space.
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