Greenacre’s NPO Sector Risk Assessment Methodology helps countries to assess the vulnerability of NPOs to terrorists financing abuse. It provides guidance in identifying NPOs ‘at risk’ of terrorist financing. Identifying ‘at risk’ NPOs is the first step in complying with FATF Recommendation 8, and a key element in demonstrating effectiveness in line with FATF Immediate Outcome 10.
The Basis of the Methodology
The Methodology is based on the principles and requirements set out in the Financial Action Task Force (FATF) Recommendation 8 (R8) and Immediate Outcome 10 (IO.10). The Methodology is designed to help countries demonstrate that they have complied fully with all the relevant requirements of FATF R8 and IO.10.
Why is this needed?
FATF has recently made a number of significant and helpful changes to R8 and IO.10. Nevertheless, many countries still struggle to implement its requirements effectively, as:
– NPOs operate by a fundamentally different model which requires specialist regulation and risk assessments;
– The guidance provided by FATF is not comprehensive, nor does it provide a clear process map for how the various requirements and best practices from different sources should be coordinated and implemented;
– The fundamental changes to the criteria by which compliance is assessed have not been fully appreciated.
The Methodology clearly sets out a systematic and comprehensive process which:
– Ensures compliance with all requirements of FATF R8 and IO10, and incorporates its suggestions on best practices.
– Provides a logical progression through the process required by FATF.
– Incorporates the key principles of demonstrating that actions are risk-based and proportionate.
– Provides full references to the relevant sections of the FATF requirements.
– Provides a format through which compliance can be clearly demonstrated to evaluators.
– Is locally-owned and designed to ensure full stakeholder engagement.
How does the Methodology work?
Our Terrorist Financing experts advised both FATF and the global NPO coalition on the comprehensive revisions to R8. Combining this with their extensive knowledge of approaches to NPO regulation from around the world, they analysed all relevant FATF documentation to develop a systematic and logical approach to ensuring and demonstrating compliance with R8 and IO.10.
Samples of completed documents from Greenacre’s NPO Sector Risk Assessment Methodology © Greenacre Group 2017.
The Methodology employs a six-step approach to identifying which NPOs are at risk of terrorist financing. It provides full guidance for implementers, including guidance on how to assess evidence, and how to reach credible conclusions where there is little data on which to base assessments.
The Methodology has been developed by the Greenacre Group’s TF experts. They are former UK government officials with fifteen years experience in formal assessments of laws and regulations to combat terrorist financing in the NPO sector. Their work has a specific focus on compliance with FATF Recommendation 8.