UN Urges African Governments to Tackle Illicit Financial Flows
The United Nations has called on African governments to enhance their efforts in combating illicit financial flows, which are estimated at $88 billion annually. The UN emphasized the necessity of balancing these efforts with the protection of civil society organizations, ensuring that anti-money laundering and anti-terrorist financing regulations do not impose undue restrictions.
Insights from the Third African High-Level Civil Society Conference
Ben Sole, the UN Special Rapporteur on the promotion and protection of human rights in counter-terrorism, delivered this message during the Third African High-Level Civil Society Conference on Combating Money Laundering and Combating the Financing of Terrorism (AML/CFT) in Abuja. This conference, organized by Space for Change (S4C), the Economic and Financial Crimes Commission’s Special Monitoring Unit against Money Laundering (SCUML), and the Citizens’ Advisory Hub (CAH), gathered over 30 countries under the theme of ‘Correct Implementation of FATF Recommendation 8: Practices, Lessons Learned, and Opportunities for Reform’.
Revised FATF Recommendations Clarify Regulations
Sole highlighted that the 2023 revision of the Financial Action Task Force (FATF) Recommendation No. 8 clarifies that only non-profit organizations identified as vulnerable to terrorist financing should be subjected to targeted measures. He pointed out that the majority of nonprofits do not pose such risks, advocating for a proportional, risk-based approach rather than blanket regulations across the sector.
Concerns Over Financial Institutions’ Compliance Risks
UN officials raised alarms about a growing trend among banks to deny services to nonprofit organizations due to perceived compliance risks, further complicating humanitarian operations. Sole stressed that effective adherence to FATF standards hinges on cooperation between governments and civil society organizations, cautioning against the misuse of anti-terrorism regulations to stifle civil engagement.
Nigeria’s Approach to Anti-Money Laundering
Harry Ellin, Head of the Anti-Money Laundering Special Management Unit of Nigeria’s Economic and Financial Crimes Commission, stated that Nigeria exemplifies how compliance with global anti-money laundering standards can actually fortify legitimate civil society activities rather than hinder them. He affirmed that FATF Recommendation 8 does not call for indiscriminate regulation of all nonprofits but encourages countries to identify vulnerable groups and apply appropriate risk-based measures.
Effective Collaboration and Evidence-Based Analysis
Ellin noted that Nigeria’s inter-agency collaboration, involving various governmental bodies and civil society, has enabled a comprehensive national assessment of terrorist financing risks within the nonprofit sector. He highlighted that this effort has transitioned from broad assumptions to evidence-based analysis, allowing regulators to concentrate on genuinely vulnerable organizations while permitting the majority of legitimate charities to function without excessive regulatory burdens.
Sharing Lessons Across Africa
Victoria Ibejim Ohaeli, Executive Director of Spaces for Change, pointed out that Nigeria’s reform process underscores the critical nature of trust, collaboration, and evidence-based policymaking in implementing FATF Recommendation 8 while safeguarding legitimate civil society activities. She revealed that the lessons from Nigeria’s experience are being shared with other African nations striving to enhance their compliance frameworks without infringing on civil liberties.
The Ongoing Fight Against Illicit Financial Flows
Samuel Diminas, Director of Spaces for Change, emphasized that, despite advancements in anti-money laundering frameworks, Africa continues to lose over $88 billion each year to illicit financial flows. He underlined that these figures represent lost opportunities for education, healthcare, and development, stating that the mission remains to uphold the integrity of financial systems while preserving the civic space that holds these systems accountable.
