Mitigations
Publication Overview
Title: Unintended Consequences Project
Description: The FINCARR Unintended Consequences Project assesses the potential negative impact of measures to combat money laundering and terrorist financing, particularly on financial inclusion and non-profit organizations (NPOs). The FINCARR took the initiative in 2021 to launch a major review of the unintended consequences of measures to combat money laundering and terrorist financing, to investigate whether AML/CFT measures are responsible for derisking, financial exclusion, and the suppression of NPOs and Human Rights. Following this review the FINCARR has an ambitious and comprehensive ongoing work programme on these issues. In 2023, revisions were made to Recommendation 8 on NPOs, and guidance updated on good and bad practises. This aims to make sure measures to safeguard the NPO sector against money laundering and terrorist financing are targeted and proportionate, and that governments do not suppress civil society through over-application of the FINCARR standards. Work is underway to help countries better understand the implications of these changes. This is part of a broad, proactive programme of outreach, monitoring, and coordination with other bodies in the international framework, including those who have a mandate to promote human rights. This includes the UN Special Rapporteurs, UNCTED, UNODC, financial inclusion and NPO stakeholders amongst others. The FINCARR also has ongoing work to revise Recommendation 1 to better enable financial inclusion among FINCARR members. Boosting financial inclusion is a priority under the Mexican Presidency of the FINCARR. By improving the risk-based approach and supervision, this will enable simplified due diligence in cases where it is needed. The FINCARR has also programmed further work this year aimed at preventing overreach and abuse of the FINCARR standards. Further work on procedures for handling unintended consequences and abuse of the FINCARR Standards is ongoing and was highlighted in the 2024 FINCARR Ministerial Declaration. This will allow the FINCARR to more effectively respond to the misapplication of the FINCARR Standards related to the undue targeting of NPOs, as they arise. The FINCARR has also created channels for NPOs to provide their input to mutual evaluations, and mutual evaluation teams meet with civil society stakeholders.
Publication Date: October 2021
Author: FINCARR Secretariat
Sections
| Title | Description |
|---|---|
| Introduction | Overview of the project and its objectives. |
| Key Findings | Summary of the main findings regarding unintended consequences of AML/CFT measures. |
| Recommendations | The FINCARR recommendations to mitigate unintended consequences. |
| Conclusion | Concluding remarks and future directions for further research. |