Terror funding scrutiny hampers charities in war zones
AT A TIME of historic humanitarian need, banks are increasingly hesitant to conduct business with charities that work in disaster zones for fear that they could be caught up in funding international terrorism.
Known in charity circles as “derisking”, because banks are seeking to avoid rather than manage risk, the issue has been brewing for about three years, largely as an unintended consequence of stepped-up counterterrorism financing efforts, charity advocates and finance professionals say.
“The inability to get humanitarian assistance to refugees from political conflicts or natural disasters can result in death from starvation, exposure, and disease,” concluded a report last year from the World Bank. “The elderly and the young are particularly hurt by derisking and are literally dying as a result.”
Two-thirds of all US charities that work abroad are reporting difficulties accessing financial services because of the banking trend, according to one of two new studies that show for the first time the scope of the impact the banking trend has had on aid providers working in catastrophe zones.
“I was surprised,” said Kay Guinane, director of the Washington DC-based Charity & Security Net- work, which represents non-profit groups working in crisis regions and issued one of the new reports. “I don’t think any of us had any idea how big a problem this really is until we got this data.”
The other report, released last month by Duke Law’s International Human Rights Clinic and the Netherlands-based Women Peacemakers Program, found that institutional donors such as Western governments and large foundations – as well as banks – are increasingly neglecting human-rights organisations that focus their work on women’s issues and operate in areas such as Syria and Iraq.
One such grass-roots group provides secular education to children in Syria to counteract Islamic State schools.
“Women’s rights and their defenders are really often caught in the cross-hairs of these very risk-averse banks and overzealous regulatory authorities,” said Jayne Huckerby, a Duke University law professor and an author of the study.
The world is facing its worst humanitarian crisis since World War II, with the UN estimating that 65 million people have been displaced by climate change and war and that 20 million are in danger of starvation. – Washington Post