On August 18, 2023, the Wolfsberg Group published its response to the FATF Public Consultation on the draft FATF R.8/INR Amendments and Best Practice Paper to Combat the Abuse of the Non-Profit Organization (NPOs) Sector.
To know more, click here: https://www.fcctimes.com/2023/08/21/enhancing-npo-security-against-terrorist-financing-wolfsberg-groups-valuable-contribution-to-fatf-revisions/
The feedback covers the Group’s views on:
- NPOs’ risk awareness and mitigation.
- Access of legitimate NPOs to financial services.
Wolfsberg’s input includes the following comments on the Best Practices Paper:
- NPOs should establish reasonable, risk-based controls to mitigate risks once they identify and assess their likelihood and impact.
- The BPP title should emphasize TF (the FATF Best Practice Paper to Combat the TF Abuse of NPOs).
- The FATF’s broad definition of NPOs, which includes carrying out other types of “good works,” is prone to misinterpretation and unintended consequences, requiring further qualification.
- The reference in paragraph 33 should be expanded to include all financial transactions, not just wire transfers.
- The inclusion of Virtual Asset Service Providers (VASPs) in the list of private sector entities acknowledges their increasing role in monetary value movement.
- The obligation for Non-governmental organizations (NPOs) to verify fund legitimacy, separate from CDD, would be strengthened under paragraph 48.
- The proposal suggests defining a “registered bank account” due to the rise of VASPs and the specificity of bank account references.
- Wolfsberg suggests that incorporating Financial Institutions (FIs) in paragraph 56 and section 2.3.3 could help identify typologies and best practices for addressing TF abuse of NPOs.
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