Civil Society Response to EC SNRA Money Laundering and Terrorist Financing

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December 16, 2016
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December 21, 2016

The European Commission is currently undertaking a Supra-National Risk Assessment (SNRA) of money laundering and terrorist financing risks affecting the internal market. In its presentation of the initial findings in a consultation meeting organized by DG Justice on October 4th, 2016, the EC pointed to 16 sectors and activities that might be at risk for terrorism financing, collection and transfer of funds through not-for-profit organizations (NPOs) being among them. Regarding the former, risk scenarios are related to the establishment of NPOs with the aim to fundraise for terrorist purposes domestically and across borders. Regarding the latter, risk scenarios are related to the possible abuse of NPOs for fundraising localized terrorist activity or cross-border financing by sending money to areas where CSOs operate close to terrorist areas of activity.

Civil Society Europe (CSE) together with the European Center for Not for Profit Law (ECNL), the European Foundation Center (EFC) and Human and Security Collective (HSC) have prepared a position paper on the European Commission’s initial findings. While being aware of the need to raise more awareness on these threats, CSE, ECNL, EFC and HSC are concerned that in a number of countries, including EU ones, certain measures and legislations have had an unintended chilling effect on civic space, namely, freedom of assembly and the ability of NPOs to register and to access funding.

In their position paper CSE et al. argue that EU must conduct careful evaluation and impact assessments before engaging in policy making, adopt a rights-based approach, but also coordinate its actions with existing efforts at the UN, FATF and member-state level and ensure coherence with already existing EU initiatives. Furthermore, CSE et al. highlight that SNRA consultation process shall be open enabling participation of the wider NPO sector, while securing continuous dialogue between the NPO sector and policy-makers, but also with other sectors that have impact on the NPO sector. Regarding the initial findings presented by the EC on October 4th, 2016, CSE et al. highlight that the risk products as collection of funds and transfer of funds shall not be analyzed as unique to NPO sector and that the analysis does not clearly distinguish between collection and transfer of funds by NPOs. More so, they state that both the threat analysis and the vulnerability analysis do not take evidence and risk-based approach. Additionally, CSE et al. emphasize that no rules-based approach can provide zero risk and that in assessing the potential risk and in the evaluation of the possible mitigating measures, it is important to consider the overall impact of such measures and to ensure that these are not counterproductive to the goals they try to achieve. Finally, they underline that NPOs contribute to the reduction of terrorism risks through their work and they are interested to continue the dialogue with EC, while suggesting that other sectors shall be subjected to risk assessment too.

Read the risk scenarios for CSOs identified by the European Commission here, and the position paper on the European Commission’s initial findings here.

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