The crisis in Syria prompted the UK’s largest ever response to a humanitarian crisis, but despite the millions of pounds donated, money is having to overcome many hurdles to reach those in need. Over £23 million has been raised by the Disasters Emergency Committee (DEC) in response to the conflict, with the UK Government committing a further £500 million to support aid efforts, but extensive sanctions and risk management issues are creating complex problems for the UK banks and humanitarian agencies as both struggle to get help through to Syrian families.
In response to this problem the BBA, the DEC and international law firm Freshfields Bruckhaus Deringer, have launched guidance for agencies on how to keep any financial transactions lawful and carefully managed so that money gets through to the intended destination. These new practical recommendations have been developed to ensure that NGOs and banks work in close dialogue as they face a range of legal, regulatory and licensing challenges.
Anthony Browne, Chief Executive of the BBA, said:
“Syrian people and their families desperately need access to aid donated from the UK, but the regulatory environment has become very difficult for charities and banks to navigate. Because of this there is a risk that urgently needed funds are not getting through.
"We have launched this straightforward, practical advice to help humanitarian agencies and banks combat some of the common issues they face when trying to get assistance to areas of need. We do still need the Government to engage more if we want to get to the best possible solutions.”
Saleh Saeed, Chief Executive of the DEC, said:
“The DEC is concerned that the current regulatory regime is significantly slowing and seriously complicating legitimate transfers of much needed funds to pay for humanitarian aid operations inside Syria. We are pleased to be working with our long term partners at the BBA and with Freshfields to help charities and banks to navigate the current regulatory framework. The DEC and our member agencies take the risk of funds being diverted extremely seriously but would also like to see greater involvement of the UK authorities in a discussion about how such risks can be prevented without significantly impinging essential humanitarian aid operations.”
Daniel Lawrence, Counsel at Freshfields, said:
"The US and UK governments have given clear messages encouraging the provision of humanitarian aid to Syria, albeit subject to controls aimed at ensuring that it does not fall into the wrong hands. Understanding how the controls operate, undertaking appropriate due diligence and engaging in transparent communications, not only between humanitarian agencies and banks but also with the regulators where appropriate, are key to mitigating the risks."
Examples of the guidance:
- The humanitarian agency should explain how due diligence on their local partners is conducted, including the frequency of the screening and which sanctions lists are used for screening
- It is recommended that humanitarian agencies engage with regulators and make reference to any licences they hold in their payment instructions. This will assist the bank in ascertaining the legality of the payment and prevent delays in processing
- Humanitarian agencies should provide a detailed purpose of payment and include a contact number for a person at the agency who is familiar with the transaction and could assist in providing additional information if required
- Banks will not be able to pre-advise on transactions and it is the responsibility of the humanitarian agency to determine the legality of the payment. Banks can advise as to the legislation which will be applicable and the agency should then consult with their legal teams prior to processing