STATEMENT: Defend NGOs Alliance raises alarm on FATF's role in restricting democratic freedoms

Jan 20

January 20, 2025— The Defend NGOs Alliance expressed deep concerns over the Financial Action Task Force’s (FATF) role in the misuse of countering terrorism financing (CTF) measures and erosion of civic space in the Philippines. The network attributes the increasing judicial attacks on NGOs and people’s organizations (POs) under the Marcos Jr administration to, among others, government efforts to exit the FATF “grey list.” These worsening attacks on NGOs undermine democracy and community development.

New research by the National Union of People’s Lawyers (NUPL) and Council for People’s Development and Governance (CPDG) says that the Philippine government uses FATF-compliance frameworks to justify restrictive measures against NGOs it sees as critical of the government under the guise of counter-terrorism. Stricter restrictions and regulations on NGOs disrupt their finances, operations and services. The research also points out that trumped-up cases are for “paper compliance” to meet arbitrary quotas for exiting the FATF “grey list.”

The FATF is an international body whose 40 Recommendations set international standards to combat money laundering and the financing of terrorism for member countries to adopt. Countries that fail to comply risk being placed on FATF’s “grey list” and subject to “increased monitoring” or its “black list” which can trigger severe economic and financial sanctions. The Philippine government has already passed many laws to comply.

The NUPL-CPDG report reveals a chilling pattern of red-tagging, surveillance, and harassment of CSOs, with 62% of respondents experiencing red-tagging and 57% reporting physical surveillance. Over one-third of organizations have faced heightened regulatory burdens, while 33% have been accused of terrorism financing without evidence. These actions disproportionately affect small grassroots organizations and cut off vital services to marginalized communities, violating their economic, social and cultural rights.

As it is, the Defend NGOs alliance monitored at least 69 development workers and 29 NGOs or networks in Luzon, Visayas and Mindanao are harassed with spurious charges related to terrorism. Most of these trumped-up complaints and cases have been lodged during the Marcos Jr administration with 49 development workers from seven (7) organizations since July 2022.

Fifty-eight (58) individuals from 20 organizations are baselessly accused of financing or otherwise supporting terrorism. Another four (4) NGO workers from two (2) organizations are absurdly claimed of engaging government soldiers in firefights or ambushing a security guard. Another seven (7) from two (2) organizations have been outrightly designated as terrorists.

The government is using FATF compliance as a pretext to stifle dissent and suppress advocacy for economic, social, and cultural rights. It has used FATF standards to justify harsh laws such as the Anti-Terrorism Act (2020) and the Terrorism Financing Prevention and Suppression Act (2012). These laws enable the arbitrary freezing of assets and criminal charges against civil society organizations (CSOs), development workers, and human rights defenders.

The alliance condemns the government’s application of FATF Recommendation 6 which broadly defines terrorism financing to include legitimate CSO activities. Asset freezes are frequently implemented without due process, extending to the personal funds of staff and even family members. These measures contravene international human rights norms, including the right to fair legal proceedings.

The alliance also criticizes FATF Recommendation 8 on supposedly combatting the abuse of non-profit organizations. This has been co-opted to align with counterinsurgency strategies, resulting in burdensome accreditation requirements, surveillance, and restrictions on accessing foreign funding. CSOs are consequently stigmatized, harassed and excluded from government consultations and platforms for engagement, undermining their critical role in fostering development and social justice.

Despite the government’s claims of improved compliance, the NUPL-CPDG report highlights the lack of risk-based assessments and meaningful engagement with CSOs. None of the 105 members of the Defend NGOs alliance were consulted in the run-up to today’s FATF onsite review nor for any inputs to the Mutual Evaluation Report (MER).

The Defend NGOs alliance denounces FATF’s failure to hold the Philippine government accountable for these abuses. By allowing the Philippine government to use symbolic metrics like prosecution quotas, FATF enables the weaponization of its framework against civil society while neglecting systemic financial crimes. If anything, this selective enforcement tarnishes FATF’s credibility as a guardian of financial integrity.

The alliance calls on FATF to reform its accountability mechanisms and ensure its recommendations are not misused to undermine civil society and constrict civic spaces. It urges the international community to press for a more balanced approach that protects human rights while addressing genuine financial risks.

As the Philippines strives to exit the FATF “Grey List,” the Defend NGOs alliance warns that unchecked compliance measures risk entrenching a dangerous precedent for other countries. The global community must act to ensure that anti-terrorism financing efforts do not come at the expense of democratic freedoms and social justice. #

RELATED RELEASES:

Statement by the Defend NGOs Alliance- Northern Luzon

National Union of People's Lawyers' Open Letter to the FATF on the Systemic Harms of FATF Policies on Philippine Civil Society: