A February 2012 report from the Transnational Institute and Statewatch finds that the legal and regulatory measures the Financial Action Task Force (FATF) recommends are being used by governments to suppress nonprofits. The FATF is an international consortium of 36 countries that sets anti-terrorist financing and anti-money laundering standards used by 180 countries.

After examining the effects of FATF regulations in nearly 160 countries, including the U.S., Transnational Institute and Statewatch found FATF rules are being used by governments as an “instrument, to further cut back on the space of civil society…freedom to access and distribute financial resources for development, conflict resolution and human rights work.”

Paraguay, for example, was tagged by the FATF in the mid 2000s as being non-compliant with FATF standards. Its response was to pass the Anti-Terrorist Law of 2010 which “did not clearly define what constitutes terrorism and included acts such as ‘dangerous interventions or obstacles on public roadways’, ‘noise pollution’ and other actions which ‘intimidate Paraguayan citizens’.” With sentences up to 15 years for some offenses, the law is widely seen as a mechanism to suppress protest and limit the capacity of nonprofits.


The report also links the FATF regime to the overly-broad terrorist ‘blacklisting’ and asset-freezing regime used by the U.S. and UN, an increase in government surveillance of nonprofits around the world, and the prosecution of nonprofits for ‘material support’ of terrorism. The report soundly rejects the ‘one size fits all’ approach to nonprofit regulation used by the FATF and calls for “urgent reforms limiting the scope of FATF Special Recommendation VIII and clarifying its purpose and intent.”