United Nations Resident Coordinator in Sri Lanka Marc-André Franche has cautioned that excessive or blanket application of anti-money-laundering and counter-terrorist-financing measures to civil-society organisations could work against Sri Lanka's objectives during its current FATF Mutual Evaluation.
His comments came during discussions surrounding the Civil Society Shadow Report submitted in connection with Sri Lanka's FATF evaluation.
Franche stressed the importance of protecting civic space while implementing measures intended to combat money laundering and terrorist financing.
The issue centres particularly on FATF Recommendation 8, which concerns non-profit organisations.
FATF's approach calls for countries to identify actual terrorist-financing risks and apply measures that are focused, proportionate and risk-based rather than imposing indiscriminate restrictions across the entire non-profit sector.
Civil-society organisations involved in the shadow-report process argue that some measures in Sri Lanka go beyond that risk-based approach.
Franche's intervention has been reported as a warning that blanket restrictions could undermine rather than strengthen Sri Lanka's compliance objectives.
Mutual Evaluation remains ongoing
The comments should not be reported as a FATF finding that Sri Lanka has failed its current Mutual Evaluation.
Nor should they be presented as a determination that Sri Lanka will receive a particular FATF classification.
They are a policy warning from the UN Resident Coordinator concerning how AML/CFT measures are implemented while the evaluation process continues.