Regional Workshop on Supporting the Prevention of Abuse of
NPO’s for Financing of Terrorism
Session 5: Outreach to the non-profit sector and the financial
services sector.
Adri Kemps
Advisor Netherlands Helsinki Committee
Bratislava, 29th October 2014

Introduction
 The World of Giving
 Accountability in Society
 Rule of Law and Civil Space: Human Rights and Space
for Civil Society
 Trends towards Restrictions
 Best Practices on Good Governance and Accountability
 Independent (Third Party) Monitoring and Code of
Conducts to Prevent Abuse

Accountability in Society
Not-for-
Profit
(NPO’s)
Profit /
Commercial
Sector
State / Public
Sector
• Code of Conduct
• (Independent)
Certification
• Transparency
• Free Market
•Competition
• Legislation
• Taxation • Good Governance
• Regulation
• Rule of Law

NPOs need Protection and Public Space
 Studies and statements in the NGO-sector following Rec. 8 (former SR VIII)
found that measures to protect NPOs against abuse should be based on risk-
analysis and should be combined with models of good governance and
strengthening public trust.
 There is no single model/solution to uphold transparency and accountability,
according to ECNL study (2009) on recent public and self-regulatory initiatives
improving transparency and accountability on NPOs in the EU.
 Since 2012 more than 50 countries have introduced or enacted legislation
constraining civil society (EFC, 18/9/2014)
 Independent studies indicate that in an increasing number of countries human
rights and NPO’s are confronted with legal, financial and logistical barriers
including harassment of human right-defenders and shrinking civil space
(Closing Space, Carnegie Endownment, 2014)

Regulation and the Work of Civil Society
 “[…] It will be important that regulations and actions in this area do not
harm the legitimate activities of such organizations.” – FATF, 22 October 2012
 UN’s CTC stated that efforts to suppress anti-terror finance should not
interfere with the ability of civil society organizations to meet their
obligations. – 20 November 2012
 “[…] As these abuses are addressed, the Security Council recalls the
importance of fully respecting the rights to freedom of religion or belief
and freedom of expression and association of individuals in civil
society […]” – Presidential Statement UN Security Council UN Doc. S/PRST/2013/1, 15 January 2013
 Based on FATF’s report on risk of terrorist abuse in NPO’s (June 2014) and
engagement process with NPO’s the question arises how the NPO-
sector could strengthen its own accountability, and thus protect the
work of civil society.

Challenges
 NPO’s are highly diversified, both in typology and in the extent of risk,
therefore, measures –including those regulating financial transactions– should
be in proportion to the risk of abuse.
 The principle of ‘know your donor, know your benificiary’ is widely accepted
within oversight on fundraising. However, its implementation needs to placed
at an international level in the light of globalization and digitalization.
 Prevention of abuse of NPO’s for financing terrorism requires fact-based
approaches to avoid undue harm to NPO’s scope and functioning, while
protecting security and safety.
 State-measures to prevent abuse of NPO’s should make use of, and facilitate,
mechanisms developed by self-regulatory and independent monitoring
structures of civil society.
 Respecting freedom of association and expression, and considering NPO’s
essential role within civil society, state regulation should focus on the
protection of NPOs and avoid limiting their scope and functioning.

The Way Forward: Independent Monitoring
 Charitable activities and civil engagement are voluntary
and private acts of citizens. Therefore, state involvement in
these activities should have legal and fiscal facilitation as
its primary aim.
 State can protect and support civil engagement by
prosecuting criminal abuse of donations and charitable
organizations and by leaving further regulation or ruling to
independent monitoring agencies and self-regulation
schemes:
 Code of Conducts, issued by NPO-sector
 Transparency via databases
 Seals-of-Approval (Accreditation) by independent agencies
 Donor Advice by ‘Watchdog’-agencies

Standards to Implement:
‘Informed Trust’ instead of ‘Blind Trust’
 Supervision, good governance and no conflict of interest.
 Trustful and accurate fundraising, no misleading
 Internal control and effective evaluation methods
 Transparency and audited financial statements
 Reasonable administrative and fundraising costs
 Stakeholders consultation

How to Implement the Standards for Oversight
1. Independent standards
2. Independent assessments
3. On behalf of donors
4. Public profile
5. Arrangements with stakeholders and national authorities
6. Cooperation with international bodies for oversight on NPOs
A friendly ‘watchdog’

Conclusion
 NPOs should develop and support self-regulatory initiatives
based on international standards / based on international best
practice with independent monitoring (third party) to prevent
and act against abuse.
 Financial institutions should not harm financial transactions
of NPOs which participate in independent self-regulatory
models to prevent abuse.
 States should facilitate NPOs and protect human rights and civil
space.
 Independent self-regulatory models can significantly contribute
to a culture of transparency and reliability in the NPO-
sector, as well as to an improvement of the sector’s processes and
best-practices (capacity building).

Adri Kemps
a3kemps@gmail.com
 Advisor NHC: Netherlands Helsinki Committee. Founded
1987, based in The Hague, the Netherlands (www.nhc.nl)
 Former Secretary General ICFO: International
Committee of Fundraising Organisations, the association
of national monitoring bodies (www.icfo.com)
Members in Austria, Belgium, Canada, China, Czech
Republic, France, Germany, Italy, Japan, Luxembourg,
Mexico, The Netherlands, Norway, Spain, Sweden,
Switzerland, Taiwan, USA.