Shadow report to bolster civil society engagement
In 2019 German civil society organisations (CSOs) knew that the Financial Action Task Force (FATF) would be conducting an evaluation of Germany’s efforts to counter the financing of terrorism (CFT) in 2020/2021. VENRO, an umbrella organisation of development and humanitarian aid CSOs, decided to produce a shadow report on terrorist financing (TF) risk to the sector and the existing measures that were developed to address the risk. The report aimed to bolster civil society engagement with the German government as it updated its national terrorist financing risk assessment (RA) prior to the FATF evaluation.
VENRO presented the report “as one part of civil society’s contribution to our shared goals of combating terrorism.” The German government's final RA included some of the shadow report’s recommendations and VENRO has continued its dialogue with the government on how the RA’s findings are implemented. After VENRO sent the FATF a copy of the report, it was contacted by the FATF evaluation team. The team asked for a meeting to discuss it in order to learn more about VENRO’s work on TF issues.
The high level of public support for, and trust of, CSOs in Germany is based on a strong culture of transparency, responsibility and professionalism. The report recognised this as an important factor in preventing terrorist abuse.
The process
To produce the report, VENRO worked with other CSOs to develop an extensive online survey of CSOs that gathered information on their perception of TF risk and what mitigation measures are in place. The survey responses, together with interviews and desk research, were the basis of findings and recommendations in the report.
Several CSOs in Germany were already familiar with the FATF process, how it impacts civil society and the opportunities it creates for engagement with the government on TF issues. When these CSOs learned about the upcoming FATF evaluation and update of the German CFT measuresF, they organised a workshop where experts explained the process and issues to CSOs.
Once completed, the report was presented in a meeting at the Home Affairs Ministry. The ensuing discussion led to ongoing civil society engagement in the RA process and helped increase the pre-existing level of trust between CSOs and government.
The report stated that CSOs reported low overall TF risk and saw fraud as a greater risk to the sector. Banking practices that cause problems for CSOs with foreign links were also reported. Overall, the report found that Germany’s existing regulatory, legal and civil society self-regulatory practices are a significant factor in reducing risk for CSOs that operate in high-risk places.
The report’s recommendations urged that the RA consider the strong culture of accountability for CSOs in the RA process and examine the potential impact of any proposed new action affecting CSOs. It made specific recommendations on:
- increasing dialogue between civil society and government on ways to support CSOs that face risk;
- the impact of sanctions and blacklisting on CSO operations;
- challenges in getting adequate banking services.
Takeaways
The investment VENRO, and its allied organisations, made in informing CSOs about the risk assessment process paid off by making it possible to show broad-based support for its findings and recommendations. The shadow report strengthened CSOs' influence in their engagement with the government on the RA and gave them the freedom to be critical of CFT measures where necessary.
Next Steps
While VENRO was generally pleased with the outcome of the RA, it is continuing its dialogue with the government to ensure the findings are implemented in a manner consistent with the risk-based approach. For example, VENRO did not agree with a finding that smaller organisations are necessarily at higher risk than larger ones. In addition, it is urging increased outreach and support for risk mitigation measures rather than new compliance requirements. It is concerned that donors may be unwilling to share risk and instead attempt to impose inappropriate requirements, such as beneficiary screening.
