Leaders of some of Jamaica’s leading non-profit organisations (NPOs) are challenging the Government to prove that Jamaica’s charitable sector poses a genuine money laundering or terrorism financing risk.

The call came during a recent Jamaica Observer Monday Exchange as representatives of charities questioned the basis for the Government’s planned Non-Profit Organisations (NPO) Act, which is expected to be introduced by October 2026 as part of efforts to modernise the regulatory framework governing the sector.

While stressing that they support accountability, transparency and compliance with international anti-money laundering standards, the organisations argued that Jamaica has yet to establish whether its registered charities present the level of risk that would justify additional regulatory requirements.

Executive director of the Council of Voluntary Social Services (CVSS) Nancy Pinchas, said the sector’s concerns stem from years of dealing with what it believes are disproportionate reporting requirements under the existing Charities Act and the Charities Regulations, 2022.

She explained that the CVSS began consulting non-profit organisations across the island in April last year after members repeatedly identified the issue as one of their greatest challenges.

Pinchas said the issue is not whether charities should be regulated, but whether the Government is following the approach recommended by the Financial Action Task Force (FATF), the international body responsible for setting standards to combat money laundering and terrorist financing.

According to Pinchas, FATF Recommendation 8, which deals specifically with non-profit organisations, requires countries to understand the risks facing the sector before imposing additional regulatory or administrative burdens.

“FATF is very aware of what had happened in the past, that countries, not just Jamaica, had imposed these burdensome regulations and impacted the sector negatively. They came back in 2016 and were very clear in their language. Do not impose administrative burdens, regulatory burdens, and or legislative burdens until you have done a risk assessment.

“Until you’ve done a risk assessment, then you are applying what we call this disproportionate approach to counter-terrorism and anti-money laundering…and they haven’t done any risk assessment. There has been no risk assessment to date [in Jamaica’,” Pinchas charged.

FATF is an intergovernmental body that develops international standards aimed at preventing money laundering, terrorist financing and the financing of weapons proliferation.

Jamaica has undertaken a number of legislative reforms in recent years to strengthen compliance with those standards and avoid being placed on international monitoring lists.

However, Pinchas argued that complying with FATF does not require governments to regulate every organisation in the same way.

Pinchas said the first step should be identifying whether a problem actually exist it the Government wants to protect Jamaica’s international standing with the concerns being raised by charities.

“So the first question we are going to ask is where have those concerns arisen from? Are they concerns because you’re guessing? That risk assessment is a critical piece of what FATF recommends. You must determine what do they look like on the ground?.. What is the real risk of a civil society organisation in this country… to have ever been used illicitly for anti-money laundering and or counter-terrorism?

“Once you determine the risk, then what we are suggesting is you go through a risk profile assessment. Because now you have a little bit of knowledge of what the risk looks like, which we actually suspect to be almost negligible to nil,” she said.

Rather than opposing regulation, Pinchas said the sector wants a framework that identifies higher-risk organisations, strengthens oversight where necessary and provides support to smaller charities to improve compliance.

“But we agree we must be proactive. So we would highlight and create a risk assessment and a scoring of who would potentially be at high risk, create for them some guidelines and why not this internal control and mechanisms… What we would then ask for as a third phase is support for somebody like the CVSS, or another organization, to ensure that there’s the skills for maybe some of the smaller, less equipped civil society organisations. They understand what the potential risks are, how to look out for them and put systems in place, tool kits, standardised documents, training,” she suggested.

Others participating in the discussion also echoed the call for a risk-based approach.

Blake Widmer, co-founder of Deaf Can Coffee, said the Government should avoid introducing solutions before properly diagnosing the problem.

“Yes, you want to plug the holes but you don’t want to suffocate by plugging the hole of the mouth. And so what is actually the problem stemming from? If they’re only 400 of us that are registered charitable organisations that are reporting, then they can do a risk assessment. They can look at what we’re doing… So if we’re looking at it and we’re saying there could be a problem here, if we’re going to diagnose it in the wrong way and the treatment from the doctor is going to be the wrong way, you actually hurt the people. You’re going to hurt us…And so your treatment of the problem actually perpetuates another or different problem and you end up hurting yourself,” said Widmer.