On 16th November 2023, the Financial Action Task Force (FATF) amended Recommendation 8 and its Interpretative Note to address the misapplication and misinterpretation of Recommendation 8, that had led countries to apply disproportionate measures on Non-Profit Organisations (NPOs). Implementing proportionate and risk-based measures are crucial for an effective approach in identifying, preventing and combatting TF abuse of NPOs. Some updates from the report include:
- As per R.8, countries need to periodically identify organisations that fall within the definition of NPOs and assess the TF risks that they faced;
- R.8 now requires countries to implement focused, proportionate and risk-based measures to address TF risks identified; and
- R.8 clarifies that countries must ensure oversight or monitoring of NPOs, but they need not designate and supervise NPOs as reporting entities or require them to conduct customer due diligence.
The document can be accessed here.