European sector bodies write to Juncker voicing concerns over Supranational Risk Assessment

EFA is one of six not-for-profit sector bodies to have co-signed a letter to European Commission President Jean Claude Juncker, voicing concerns over the Commission’s proposal to allocate non-profit organisations a high risk rating in its forthcoming second Supranational Risk Assessment (SNRA) on Money Laundering and Terrorism Financing risks.

Urging the European Commission to lower the rating, EFA and its cosignatories, Donors & Foundations Networks in Europe (DAFNE) European Centre for Not for Profit Law (ECNL), European Foundation Centre (EFC), Human Security Collective (HSC) and Civil Society Europe (CSE), state that:

“While we fully support the fight against Money Laundering and the Financing Terrorism, we are deeply concerned about the impact of the SNRA on the Not for Profit sector as a whole and on fundamental rights, and more particularly civic freedoms.”

According to information received informally, they state, they do not believe that the European Commission has developed a more robust methodology for assessing the sector than that used for its earlier 2017 SNRA and therefore, “are of the opinion that the EC cannot be confident that it reflects the actual risk areas or risk level (or lack of it).”

The letter also argues that the high risk rating may in fact prove counter-productive to the SNRA’s overall goal of countering terrorism, by potentially prompting Member States to introduce more sector regulation that could place the work of NPOs at risk and affect philanthropy and cross-border giving, whether intentionally or inadvertently.

It highlights the potential consequences of such a rating on a regional and national level, which could include affecting NPO access to funding and services, and their ability to deliver aid and services, and could also see mitigation efforts re-directed towards risk areas which are not at risk, side-lining ones where risk may actually exist.

In addition, the cosignatories state, they do not consider the consultation on the draft to have been sufficiently wide, nor that there has been any evidence produced to support the Commission’s proposed high risk rating.

As such, they request that the risk assessment of NPOs to terrorism financing is lowered significantly in the final text, unless evidence justifying such a high risk rating and showing a clear threat and vulnerability of the whole sector is shared and discussed with the sector.

The final text is expected to be approved on 16 July.