A new report offers advice for banks, humanitarian organizations and donors to work together to move humanitarian program funds to aid civilians in need in Syria while complying with European Union (EU), U.S., and United Nations (UN) sanctions and other regulatory obligations. The document, Risk Management Principles Guide for Sending Humanitarian Funds into Syria and Similar High-Risk Jurisdictions, is a set of “non-binding safeguarding principles that have been developed following close collaboration with relevant stakeholders across governments, donors, international banks and NGO,” it explains.
The report is the result of a multi-year project led by Justine Walker, previously director of sanctions policy at UK Finance and currently head of global sanctions and risk at the Association of Certified Anti-Money Laundering Specialists (ACAMS). Partners in this work include the World Bank, European Commission, UK Department for International Development, Swiss Agency for Development and Cooperation, Graduate Institute Geneva and Global Governance Centre. The document warns that it is not official guidance from these entities nor does it reflect their official opinions.
With the recognition of unintended consequences of sanctions and other restrictive measures, regular roundtable discussions with different stakeholders (UN agencies, the EU, the International Committee of the Red Cross, humanitarian International Non-Governmental Organisations (INGOs) as well as state representatives) “have identified a need to find safe, transparent and dependable banking and payment channels that cover the whole of Syria,” the report states. Despite the political, safety and other challenges presented, there are humanitarian assistance programs across Syria. However, compliance concerns have “unintentionally eroded the ability for humanitarian actors to facilitate international payments” there.
The combination of sanctions against Syria (including sanctions against government-run banks) and the collapse of its banking system in non-government controlled areas means there are very few ways to move money into the country. EU sanctions place restrictions on the types of financial services (including new correspondent banking relationships) that EU banks can offer in the country. U.S. sanctions go even further, including a blanket export embargo and more extensive financial restrictions. In addition, regulatory requirements of the U.S. and other countries further restrict the flow of funds.
The report lists a series of questions to be considered before attempting to move program funds for humanitarian aid in Syria:
- What currency is the transaction in? Will the transaction need ‘clearing’ through the US financial system? This will have an impact regarding the applicable sanctions regime and related compliance factors.
- Which sanctions regimes are applicable, for instance terrorism, individual designations, Syria-specific regimes?
- Is the activity restricted under the relevant sanctions regimes? Is there a possibility to apply for a specific license authorizing the activity? Is the activity exempted if carried out to provide humanitarian aid?
- Are any parties to the transaction subject to sanctions designations? Are there any potential matches to SDNs/designated persons in the screening which need to be investigated?
- Is there any involvement of the Government of Syria16 or a designated terrorist actor?
- Who is the ultimate beneficiary of the transaction/aid?
- Is there any relevant adverse media relating to any of the parties involved i.e. they are operating on behalf of a designated actor?
- Is the activity taking place in an area restricted under relevant counter-terrorism and security legislation (i.e. prohibitions on travelling to certain areas) and, if so, what humanitarian exemptions are in place?
- Are any goods involved? If so, are the goods subject to export controls, or US origin thresholds?
- What ancillary activities will need to take place, for instance purchasing sim cards?
- How will the humanitarian actor deal with restrictions on fuel?
- What reputational risks might result from the transaction/activities?
The report then dives into making use of the humanitarian exceptions framework. In doing so, several challenges are presented. These include the chilling effect of overcompliance. The report then outlines recommendations for those working in Syria. These include the value of collaboration and multi-stakeholder dialogue, improved guidance and dialogue on proportionality.
Finally, the report offers tips for banks and those working with banks. For humanitarian organizations, provide a summary of your program to the bank, help them understand your operations, be transparent, and enlist the assistance of your donor. For banks, the report recommends openness with bank customers, engage early with correspondent banks to provide details of the intended payment, and work with customers on risk management approaches and available payment routings. It also sets out recommendations for governments. Key among these is to carefully consider how they can structure licenses to reflect a lack of available payment channels. In especially high-risk scenarios, the report states, governments should “consider how they can offer reassurance in respect to the processing of humanitarian payments (and more so if government funded). This could include engaging in dialogue with banks and their correspondents or issuing supporting statements e.g., ‘a statement of fact’ or ‘comfort letter’ to the relevant banks involved in processing related payments.”