Sending money to fragile and sanctioned states: A guide for NGOs

By Helen Castell 10 July 2015

A bank transaction. How can NGOs limit the extent to which counterterrorism legislation affects their operations in fragile and sanctioned states? Photo by: MyFuture.com / CC BY-ND

Counterterrorism legislation has added another thread to an already complex tapestry of challenges facing nongovernmental organizations seeking to send money to fragile and sanctioned states. While a small number of NGOs have seen their bank accounts closed over the past year, many have had individual transactions delayed and even barred.

Since the United States introduced counterterrorism legislation in the aftermath of the 9/11 attacks, many countries have followed suit. This applies to countries where not only many international charities are based, but also where the majority of NGO beneficiaries live.

Cambodia, for example, vowed this month to push ahead with a draft law that aims to prevent NGOs from acting as a funnel of funding for terrorist groups in the country and that will force NGOs to register and file accounts with the government. Kenya has also cracked down on money transfer providers and this month accused the U.S., the U.K., Norway, Germany and Finland of funding organizations that it claims are linked to al-Shabab.

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As the front-line facilitators of finance, banks have been pushed into an enforcement role. NGOs and the people they seek to help have been among the hardest hit. Nearly a third of charities questioned in a recent survey by the U.K. Charities Finance Group said that they felt banks had become “substantially more risk averse.” Considering the pressure that banks are under to comply with regulations that are not always clear and that continue to evolve, this is not surprising.

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About the author

Helen castell profile
Helen Castell@flippinowl

Helen Castell is a London-based financial journalist with nearly 20 years’ experience covering trade, energy and risk for TXF, Shares Magazine, Global Trade Review, Newsbase, Trade Finance Magazine and other Euromoney publications. At Devex, she writes about development banking, private sector engagement and funding trends. She studied English Literature at Sheffield University and International Journalism at London’s City University, and speaks English, Spanish and Japanese.


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