The International Journal
of Not-for-Profit Law

Volume 4, Issue 4, June 2002

FATF

Financial Action Task Force Responds to Terrorist Activities by Targeting NPOs

At an extraordinary plenary held in Washington last October, the Financial Action Task Force (FATF) agreed to a number of new measures designed to focus attention on financing of terrorist activities.  Among the measures is one targeted specifically at NPOs.  In this regard, the group agreed to “[e]nsure that entities, in particular non-profit organizations, cannot be misused to finance terrorism.”

Under the agreement, countries have been asked to review their legislation and regulations to ensure that NPOs cannot be misused in this way.  The suggestion is made that NPOs are particularly vulnerable to such misuse, presumably because of lax oversight by governments.

It is expected that there will be follow-up actions in various countries to comply with this agreement.  For example, Canada and the UK have each looked to charity law and attempted to strengthen it to avoid such problems.  For a report on the developments in Canada, see Canada Country Update, Vol 4, Iss 2/3.  In the UK, the Charity Commission issued a report in March 2002 describing its approach to charities that may be involved in terrorism.[1]

Subsequent developments along these lines will be followed by IJNL.  Further information about the FATF actions can be obtained by contacting Helen Fisher of the OECD Media Relations Division at helen.fisher@oecd.org .

[1] See Charity Commission Press Release PR 22/02, March 13, 2002.

World Bank

Report Issued on the World Bank Enabling Environment Project

The World Bank has issued a report following the CIVICUS-sponsored seminar in the Hague in October 2000.  Since that time the project has been taken forward by an Advisory Group and by Bank staff.  The seminar and the subsequent consultations identified two important concerns: A Handbook that was offered by the Bank; and the taking by the Bank of a prescriptive approach to legal frameworks. In this respect, the Bank has transferred copyright in the Handbook, and the Bank staff has moved in the direction of facilitating the sharing of knowledge and experiences among practitioners through a new website to be established in the context of the Global Development Gateway.

The Bank has also been appropriately influenced by the need to relate this activity more directly to Bank operations. Thus, concerns about relating the legal enabling environment to social accountability issues and implementation of Community Driven Development (CDD) are reflected in the current report on the project.  This also stresses the creation of tools to assess the legal environment in various countries. Social accountability and CDD represent increasingly important elements in Bank supported operations.  The Bank received guidance in this regard from the Advisory Group.