This handbook examines the evolution and implementation of Financial Action Task Force (FATF) Recommendation 8, with a focus on mitigating terrorism financing (TF) risks in the non-profit organisation (NPO) sector while safeguarding legitimate civil society activity. Over the past two decades, Recommendation 8 has been one of the most debated elements of the FATF Standards, reflecting the challenge of balancing financial integrity objectives with an enabling environment for non-profit operations.

Early interpretations of the Recommendation, particularly following its introduction in 2001, led in many jurisdictions to broad and often disproportionate regulatory measures across the NPO sector. In practice, this resulted in unintended consequences, including financial exclusion, de-risking by financial institutions and constraints on civil society activity. Subsequent revisions by the FATF, most notably in 2016 and 2023, have sought to address these issues by emphasising a risk-based approach, clarifying scope and strengthening proportionality and the principle of “do no harm”.