New Orleans      There’s nothing easy about running a nonprofit, but in many countries, this has increasingly been like working with a target on your back.  This is especially true where democracy is a pretense and autocracy is simply the rule.  Tragically, the world’s biggest countries and economies forming the G7 have made this easier by having created a mindless apparatus to deal with money laundering by the baddies like gangsters, terrorists, and run-of-the-mill criminals, which has increasingly been weaponized against nonprofits, activists, and protestors by various regimes.

As The Economist recently reported, the Financial Action Task Force (FATF) was organized by the G7 thirty-five years ago as a “one-year, fact-finding unit that would catalogue policies to stop money laundering associated with the drug trade….”  That was then, this is now.  The recommendations are not binding on countries, but because they can block access to dollar-based financial markets, largely still controlled in the United States, countries would be ignoring the task force at their peril, because it could block foreign investment and other capital flow.

Well and good, but the FATF standards are so vague and their oversight so sloppy that in the hands of autocratic governments, wolves can run wild with this sheep’s clothing.  These rules have been used to justify shutting down bank accounts, police and military intrusions into nonprofit offices, and other actions which essentially put organizations out of business and activists in danger.

This has become common for large NGOs in India on the pretense that they were receiving foreign funds that might be suspect or not using the mandated accounts in government-owned banks, where all transactions could be scrutinized.  The abuse is transparent: “Only 2% of those investigated under India’s Unlawful Activities Prevention Act from 2016 to 2019 have been convicted of a crime….”  Tunisia, once the darling of the Arab Spring, has shuttered numerous nonprofits that had even the flimsiest relationship to the governmental opposition.  ACORN in Tunisia was effectively closed, with leaders and organizers interviewed and harassed for no reason.  Outrages have been reported in the Philippines, Egypt, Hungary, Turkey, Belarus, Kazakhstan, and other countries.  Trudeau’s Canada even used this tool to cut the financial contributions being made to support the truckers protest in Ottawa in recent years.  Lexis Nexis reports that 130,000 outfits have been alleged to have laundered money with “30,000 having assets frozen, up from 24,000 last year.”

Of course, banks are hyper conservative and have also used specious reasons to arbitrarily close accounts for various businesses and nonprofits without explanation.  FATF revised Recommendation 8 “to limit abuse and tackle the widespread ‘debanking’ of charities.”  No observer believes that this will fix the problem or prevent its abuse as a tool to stop dissent, protest, and basic people-supporting nonprofits.  Legal action has succeeded in Kenya and Uganda, but these are the exceptions, not the rule.

All of this may seem under the radar, but the impact is huge.  Once civil society is curtailed and de facto outlawed, governmental impunity becomes the standard operating procedure.  As long as the G7 allows this, it will be a permanent stain on any laundry they are pretending to clean.