The Financial Action Task Force, a global body that sets counter-terrorism financing standards, has changed its guidance to clarify that charities are not inherently at risk of terrorist abuse.
The section of FATF’s anti-money laundering and counter-terrorism financing standards dealing with charities, known as recommendation eight, previously warned that non-profit organisations were "particularly vulnerable" to abuse by those wishing to siphon money into terrorism.
But at an FATF meeting in South Korea last week, the body decided remove this sentence from the recommendation, although the interpretive notes accompanying the guidance still say that some non-profit organisations are at risk of being exploited.
The change follows a FATF consultation on recommendation eight in April, which asked charities and counter-fraud experts to comment on the wording of the recommendation.
The recommendation says: "Countries should review the adequacy of laws and regulations that relate to non-profit organisations which the country has identified as being vulnerable to terrorist financing abuse."
Andrew O’Brien, head of policy and engagement at the CFG, welcomed the updated recommendation and interpretive note and said they "far more accurately reflect the risks to the sector and call for a more measured response when protecting charities".
He said: "Research conducted on behalf of the Financial Conduct Authority identified signals sent by global standards-setters such as FATF as factors in charities losing access to financial services.
"Hopefully, this will send a positive signal to banks that they should provide financial services to charities that work in high-risk environments and take proportionate measures."
He also welcomed the recognition in the new interpretive note that UK charities were playing a major part in combating global terrorism financing.
He said: "The Charity Commission should also be congratulated on its leadership as part of the group that has drafted this new version of R8 and interpretative note and the positive influence that it has had.
"Without their leadership, this change wouldn’t have happened."
Adam Pickering, international policy manager at CAF, said the original text had been "unhelpful", "prescriptive" and "didn’t lead to better regulation of the sector".
He said the new guidance seemed to be based more on individual risk, which took into account the local context, but that he would like to see this approach spelled out more clearly in the interpretive notes.
A commission spokesman said the regulator was pleased to have played a part in securing the revisions and hoped they would allow charities to operate effectively and lawfully.
"Our approach in this area is unchanged," he said. "The revisions to FATF's R8 are now in alignment with the findings from its 2014 typologies report on the abuse of the non-profit organisations sector.
"This concluded that NPOs are at risk of abuse for terrorist financing purposes but that the risk of such abuse is not shared equally across the sector.
"Some NPOs, by virtue of what they do and where and how they operate, are at greater risk than others."