Exposing FATF The secretive body responsible for undermining civil society and democracy across the globe

The Financial Action Task Force (FATF) is an intergovernmental organization set up in 1989 to combat money laundering and terrorist financing. It sounds innocuous, but it plays a significant role in setting global standards that have had devastating impacts on human rights defenders, civic spaces, and economies globally. Despite its wide influence, there is very little known about FATF, even within civil society.

We are witnessing a growing trend globally where counter-terrorism and money laundering laws are increasingly misused to imprison human rights defenders and shut down civic spaces. It has created a chilling effect across entire societies. The United Nations and other human rights bodies have repeatedly raised concerns over such misuse of counter-terrorism and money laundering laws, but very few know about the role FATF played in the introduction of these laws.

Our research shows that thanks to FATF:

• over 100 countries have passed draconian laws that repress civil society
• over 20,000 NGOs have been forced out of operation due to FATF-inspired laws
• 91% of non-profit organisations worldwide report difficulty in accessing finance

To give just one example: In 2020, the Indian government using FATF-led money laundering laws, froze the bank accounts of Amnesty International, which ultimately was forced to shut down its operations in India.

FATF has increasingly played a significant role in advancing the securitization of civic spaces. While FATF initially focused on combatting drugs-based money laundering, after the 9/11 terrorist attacks it singled out Not-for-Profit organizations (NPOs) as being vulnerable to becoming conduits of terrorist financing. It revised its standards and introduced Special Recommendation VIII which declared that NPOs are “particularly vulnerable” to terrorist financing risks, and recommended that countries introduce legal and regulatory measures to address these risks.

Consequently, countries introduced stringent measures on NPOs while revising their counter-terrorism laws. As FATF places non-compliant countries on its “grey” or “black” lists, which adversely impacts their foreign investment and economy, countries are quick to implement FATF recommendations and happy to take advantage of these measures to repress dissident or inconvenient voices and organisations. 

For more information, visit: https://eyesonfatf.org/what-is-fatf/ 

Since FATF standards have far-reaching consequences, we felt the need to spotlight the harms caused by FATF standards globally, to disseminate information on FATF, and advocate for positive reforms of FATF standards.

The decision to start a website and this initiative was primarily driven by the lack of public information on the harms caused by FATF. While some scholars and civil society actors, including TNI,  have written about the adverse impact of FATF standards and have raised concerns about its functioning, no focused initiative or website spotlights how FATF perpetuates these harms. FATF has couched these harms as “unintended consequences”, but we believe its standards in their current form contribute to serious human rights violations and stifling of civic spaces.

Additionally, this initiative aims to build a platform for civil society actors from different parts of the world to share their experiences of their engagement with FATF processes, and to collectively advocate for reforms of FATF standards. 

We also want to make this website a knowledge hub where all the relevant information on FATF and its processes is available for civil society actors in an accessible manner. The FATF documents and their language are technical and are often incomprehensible, so this is critical to a campaign for reform.

Mutual evaluations are in-depth country reports done by FATF members from different countries that analyse a particular country's measures to combat money laundering and terrorist financing. India’s latest Mutual Evaluation Report was published in September 2024.  While the report acknowledges that India is "partially compliant" in its regulation of NGOs, it fails to address how these laws have been weaponised to target activists, journalists, opposition politicians, and civil society organisations. International human rights organizations and bodies including the UN Special Rapporteur on Human Rights and Counter-terrorism have repeatedly raised the issue of misuse of counter-terrorism laws in India, and have also pointed out how these laws do not adhere to international legal norms.

Despite these glaring issues, FATF concluded that India’s legal and regulatory framework is producing good results and has placed India in its highest technical compliance bracket. Shortly after India was granted this rating at the FATF plenary, the government went on a spree of further cancellations of foreign funding approvals for key NGOs. This shows that FATF's poor review has emboldened India to further crackdown on civil society, and also undermines the report's integrity.

Additionally, the report failed to address the growing threat of terror financing by extremist Hindutva groups and corporate money laundering scandals like those involving the Adani Group.

This omission raises serious concerns about the credibility of FATF as an independent body. Indian civil society groups submitted three reports to FATF ahead of India’s evaluation, providing evidence and information on how India's government has failed to take action against groups allegedly involved in terrorist financing and money laundering. However, FATF failed to consider these reports. Despite repeated demands from Indian civil society groups, some of those who were targeted by the government for doing critical work, FATF did not meet them. FATF’s process does not provide any scope for civil society engagement during the mutual evaluation process. Nor does the FATF methodology document which lays down the criteria and process of evaluation include human rights standards.

For more information, visit https://eyesonfatf.org/fatf-fails-its-mandate-with-india-review-critical-issues-ignored/ 

Currently, civil society groups from the United States, India, South Africa, the Philippines, and Nigeria are involved in this project. Many academics, students, and journalists are also participating. As FATF is used by governments to target civil society, we are unfortunately not able to name all individuals and groups involved in order to protect their safety.

The opaqueness of FATF's processes must change.The body must adopt a more transparent and accessible approach, specifically its engagement with the civil society. For example, FATF states that civil society groups can provide input not less than two months prior to the onsite visit of the assessment team involved in the mutual evaluation process. However, there are no processes through which consideration of such reports can be verified. Also, FATF processes do not include any mechanism by which civil society groups can engage and raise their concerns during the mutual evaluation process.

In our view, FATF needs a complete overhaul. Its standards have done irreparable harm while also simultaneously failing to meaningfully check the proliferation of terrorism and terror financing, as well as rampant money laundering by corporations. Recommendation 8, which painted a target on the back of NPOs without any evidence, is but one example of the harm perpetrated by FATF standards. While FATF has since admitted that NPOs are only very rarely at risk of being used for terror financing, it needs to do more to ensure an end to the repression of civil society globally and the shrinking of civic space. Beyond that, it needs to go back to the drawing board to find standards that cannot be so easily misused by governments across the world.FATF's assessment methodology must be revised in line with international human rights standards, and its assessment criteria must include guidance for the assessors to ensure human rights compliance.

There are multiple pressure points that we are focusing on. First, the FATF secretariat, and member countries delegations to FATF. Second, international human rights bodies and organisations. Third, international financial institutions. Fourth, media and academia. We believe structural changes to FATF and revision of its standards will require a robust and sustained campaign from civil society, which this initiative is undertaking.

Visit https://eyesonfatf.org to find out more.