A series of case studies on the implications of bank de-risking for humanitarian non-governmental organizations in four contexts revealed a number of common themes and recommendations. These are set out in a policy brief, Counter-terrorism, bank de-risking and humanitarian response: a path forward.
As the brief explains, although preventing the flow of funds to terrorist groups is a laudable goal, these policies have had “far-reaching and unintended consequences, including for the ability of humanitarian organisations to reach people in need, particularly in areas under the control of proscribed groups. Banks have closed the accounts of humanitarian organizations, and their transactions have been delayed or blocked. This has forced these groups to find other ways of moving money for time-sensitive programming, forcing “increasing volumes of funds through informal channels, including hawala money transfer networks.”
The four case studies examined the impact of de-risking on humanitarian groups working in the occupied Palestinian territory, Somalia, Syria and Yemen. The policy brief’s authors – Stuart Gordon of the London School of Economics and Political Science, Sherine El Taraboulsi-McCarthy of the Humanitarian Policy Group at the Overseas Development Institute – found five common aspects in the studies:
In addition, the authors make several recommendations to bankers, regulators, NGOs and civil society, donors and international humanitarian organizations, in order to pave a path towards a proportionate risk-based approach. These includes agreement on a due diligence code of conduct for NGOs, specifying the type of information that banks need and what constitutes “sufficient” information; placing hawala banking channels on a clearer regulatory basis in conditions where it is the only way of moving money; and a concerted advocacy efforts by groups and foundations from the global North and South to make a case for regulating the sector in a proportional manner “that does not render vulnerable populations even more so.”
Read the full report.