NPO Sector Review Methodology

    What is it?

    The Methodology for Assessing Laws, Regulations and Other Measures allows governments to assess the relative levels of terrorist financing risk and vulnerability within a country’s NPO sector by reviewing its mitigating measures.  It has been developed with the support of the IMF and World Bank.

    Do I need to undertake a review of the mitigating measures?

    FATF Recommendation 8 requires that countries ‘review the adequacy of laws and regulations that relate to non-profit organisations which the country has identified as being vulnerable to terrorist financing abuse’ (our emphasis). R8 states that the sector review should cover the laws, regulations, outreach and other policy measures which applies to these ‘at risk’ organisations.

    If your country has identified a risk of terrorist financing within its NPO sector, then it must review the laws, regulations and other measures which are designed to mitigate that risk.


    Flowchart on need for a review: click here for larger image

    How does the Methodology work?

    The FATF Methodology for R8 refers to “measures, including laws and regulations” that the review should cover The scope of this Methodology therefore covers ‘other measures’ in addition to laws and regulations, including self-regulation, policy measures and outreach.

    The Methodology is based upon the unparalleled experience of Greenacre’s experts in undertaking 20 formal assessments of NPO regulatory environments in the Gulf, Asia, Africa and Europe, including the development and implementation of assessment tools in Indonesian and The Philippines.

    Greenacre has distilled that experience into 31 indicators across three categories as follows:

    I: Policy Environment: This category area considers government policy towards the civil society sector. This category has eight sub-categories, which amongst other things covers how government develops the skills and competencies of the CSO sector; how government engages with the CSO sector; and how fair and proportionate policies, laws and regulations are. The eight sub-categories covered are: oversight; proportionality; reputation; environment; supporting; development; consultation; and sustainability.

    II: Supervisory Measures: This category covers all laws and regulations that relate to oversight of the CSO sector, with assessments made about how they work in theory and in practice. It assesses whether the government has the tools, skills and competence to supervise the sector effectively. It has the following twelve sub-categories: establishment; registration; governance; financial; transparency; monitoring; intelligence; investigations; intervention; cooperation; coordination; and policy.

    III: Practice and Culture of the Sector: This category area looks at how civil society operates at a sectoral and individual level, assessing the degree to which it protects itself from risk. It has eleven sub-categories, covering: environment; forming; transparency; governance; financial; project; risk; abuse; self-regulation; development; and consultation.

    Outcomes

    An assessment completed using the Methodology enables the clear identification of areas of greatest risk and vulnerability within the categories and sub-categories included. There should then follow a process of consultation and discussion about the technical, political and strategic priorities for action. Greenacre’s senior experts can contribute to this process.

    The Methodology has been designed to meet the requirements of FATF R8 and Immediate Outcome 10 on Domestic Reviews and identification of high risk within the NPO sector.

    Implementing the Methodology

    The Methodology is implemented by local implementing partners, with guidance from Greenacre both before and during the implementation process. There is some flexibility in the make-up of the implementing team, although Greenacre will require assurances that it is representative and competent before licensing the Methodology.

    Prior to the assessment, Greenacre and the implementing partners will agree the scope of the assessment. The Methodology is modular, which enables implementers to conduct a full holistic review of the not-for-profit sector in-country, or select key modules to address particular concerns that are higher risk. This process will be influenced by the threat assessments available, and will impact upon the specific categories and sub-categories included.

    Local implementers will then undertake an assessment of the selected categories and sub-categories using the specific indicators that the Methodology provides. The assessment process is flexible. However, it will usually require collection of information from a wide range of sources, and include both desk-based analysis and field interviews.

    Costs

    Greenacre can licence the Methodology to any partner or jurisdiction that satisfies its minimum implementation criteria. Aside from the cost of the licence and Greenacre’s project guidance, most costs will be incurred by local implementers. The final fee will depend upon a number of variables including the scope of the assessment, the size of the country and the local cost level.

    Next steps

    If you are interested in discussing how you can use the Methodology for Assessing Laws, Regulations and Other Measures, please contact our Director Ben Evans who leads on this work at Ben@greenacregroup.co.uk.