Paris, 10 July 2025 - The FATF has introduced a new process to address unintended consequences arising from the misapplication of its Standards on non-profit organisations (NPOs), strengthening global efforts to protect legitimate NPO activity from disproportionate disruption.

The non-profit sector performs a vital role in our society, providing relief and support to groups of the population in need, at times of urgent crisis and often in challenging circumstances and regions. Unfortunately, at times, bad actors have also taken advantage of charitable fundraising to provide cover for the financing of terrorism.

The FATF Standards help protect the non-profit sector from abuse for terrorist financing.  Using the risk-based approach, these measures should not disrupt or discourage legitimate NPO activities. However, the misapplication of the FATF Standards can lead to unintended consequences, such as the illegitimate targeting and suppression of legitimate NPOs.

To ensure that these unintended consequences can be addressed in a timely manner, the FATF has adopted a dedicated procedure to identify, assess and address unintended consequences stemming from the way countries implement the FATF Standards on NPOs. It allows countries, the International Monetary Fund and the World Bank to raise concerns of unintended consequences when a country’s misapplication of the FATF Standards disrupts legitimate NPO activity. It builds on other FATF procedures that assess the implementation of the FATF Standards on NPOs, such as the mutual evaluation process, to ensure that there are no gaps in the FATF’s ability to address such issues.

FATF President Elisa de Anda Madrazo underscored the significance of this step:

“Safeguarding the legitimate work of non-profit organisations is essential. This new procedure reflects FATF’s commitment to proportionality and responsiveness. It ensures that our Standards protect both people and principles—targeting terrorist financing without disrupting the crucial, often life-saving work, of NPOs.”

The new procedure applies to both FATF and FSRB member countries, unless an FSRB chooses to opt-out of the FATF-led UIC process and set up their own process for their members.

This initiative is part of FATF’s broader strategy to address the unintended consequences of its Standards, enhancing transparency, accountability, and trust in global efforts to combat illicit finance.

The new procedures are set out in the following documents as follows:

• The 2023 Universal Procedures (at paragraph 130(bis))
• The FATF 5^th Round Procedures (at paragraph 136(bis))
• The 2022 Universal Procedures (at paragraph 55(bis))
• The FATF 4^th Round Procedures (at paragraph 101(bis))