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S4C TAKES NGO REGULATORY COMPLIANCE CLINIC TO SENEGAL

Spaces for Change | S4C has extended the reach of the NGO Regulatory Compliance Clinic to other West African countries, beginning with Senegal. On December 7, 2022, S4C and Publish What You Pay Senegal co-hosted the one-day Clinic in Dakar, Senegal, which brought together 15 executives of civil society organizations (CSOs). The Clinic aimed to increase the capacity of CSOs operating in the country to follow all rules and regulations applicable to the non-profit sector, including legal regimes relating to money laundering (ML) and terrorism financing (TF).

The supervisory authority for non-profits in Senegal is fragmented across agencies such as the Minister of Interior, the National Commission for the Recovery of Illicit Assets (NCRIA), National Anti-Corruption Agency, and National Unit for the Processing of Financial Information (CENTIF). Participants learned about their obligations to these regulatory bodies as espoused under various national laws regulating the non-profit sector in Senegal. These laws include Decree No. 2015-145 of 4th February 2015, Uniform Laws 2004-09 of 6th February 2004, and Decree No. 2019-1500 of September 18, 2019. Some of the obligations imposed on NPOs under these laws include the submission of financial statements of the previous financial year within six months, the declaration of suspicious transactions to CENTIF, safekeeping of the financial register for a minimum of 10 years, and due diligence on the source of financing.

The Clinic also trained participants on the laws governing anti-money laundering and countering the financing of terrorism (AML/CFT) risks in non-profit organizations (NPOs). According to the Financial Action Task Force’s (FATF’s) Recommendation 8 (R8), countries should identify, assess, and understand the money laundering and terrorist financing risks in the NPO sector of their country, and take action, including designating an authority or mechanism to coordinate actions to assess the risks, and apply resources, aimed at ensuring the risks are mitigated effectively. Adhering to this requirement, several countries have formulated and are still formulating laws and policies for mitigating AML/CFT risks. Many NPOs operating in Senegal are neither aware of the national nor international laws and regulations, creating a need to increase the capacities of CSOs to comply with them and avert regulatory sanctions which might lead to forced closure, license suspension, fines, or outright deregistration.

The training afforded organizations the opportunity to learn about the restrictive provisions in national AML/CFT laws that could potentially stifle the civic space such as Articles 39 of Decree No. 2022-1676 of 22nd September 2022. Article 39 provides that any NGO which collects, receives, gives or transfers funds within the framework of its philanthropic activity is subject to surveillance. Without adequate checks and balances, this provision can be exploited to surveil groups critical of the government or demanding accountability for the failings of governance. Not only that, the entire law adopts a blanket approach to non-profit regulation, without taking into account that FATF’s R8 is specifically targeted at NPOs that are at risk of terrorism financing.

The NPO regulatory climate in Senegal is not very different from that of Nigeria where S4C has conducted similar compliance clinics. The Companies and Allied Matters Act 2020 and other legal statutes contain numerous provisions that are perceived as overly restrictive. The same trend has been observed in other West African countries such as Ghana, signaling states’ consistency in using repressive laws to clamp down on civil society.

While many participants could not understand the intersection between counterterrorism laws and non-profit at the start of the training, this totally changed by the end of the Clinic. They also gained a better understanding of the connection between international financial regulations and the regulatory prescriptions in national AML/CFT regimes as well as the extent legislative measures put in place to combat AML/CFT are having a significant impact on non-profit operations across countries. The Clinic was organized under the banner of the Civic Space Resource Hub (CSR-Hub)  for West Africa, supported by the Ford Foundation.