The EU’s Brexit Chief Negotiator Michel Barnier walks behind European Commission President Jean-Claude Juncker and British Prime Minister Theresa May at the European Commission headquarters in Brussels, Belgium. Feb. 7. Photo by: REUTERS/Yves Herman

BRUSSELS — British NGOs have received another blow to their fading hopes of securing European Union funding post-Brexit, after Brussels overturned the legal justification for funding humanitarian groups based outside the bloc.

Media in Switzerland, which is not a member of the EU, reported this week that the European Commission’s humanitarian arm, ECHO, had written to 10 Swiss NGOs in December 2018, informing them that they would be cut off from funding. According to the letter, an internal review had found that the legal basis for funding NGOs outside the EU — Convention 124 of the Council of Europe — was now deemed insufficient.

“This decision was based on an in-depth legal review which was due by the end of the year … and is therefore in no way linked to Brexit.”

— EU official

ECHO gave two explanations for changing its mind. First, the EU has not ratified Convention 124; and second, the convention “does not purport to set out rules governing the eligibility of NGOs to receive financing from the European Union.”

As a result, ECHO wrote “it will no longer be possible to award an FPA [or Framework Partnership Agreement]” to “organizations based in states outside the union.” Framework partnership agreements set out the relationship between ECHO and those NGOs with which it works.

The move applies to NGOs who signed FPAs with ECHO, but does not affect funding through the commission’s development arm, DEVCO, which has different eligibility rules and procedures, a commission spokesperson said. 

The International Committee of the Red Cross and International Federation of Red Cross and Red Crescent Societies, which are headquartered in Geneva, Switzerland, are not affected by the changes as they are considered international organizations under EU financial regulation.

The timing prompted suspicions that the Swiss have become collateral damage in the Brexit negotiations, as the U.K. heads toward leaving the EU on March 29 without a divorce deal. The question of whether U.K. NGOs can remain eligible for EU funding after that date has been a key concern for the British aid community.

In an interview with Devex last month, the director-general of ECHO, Monique Pariat, warned U.K. NGOs to prepare for the worst, saying a no-deal scenario would lead to them losing their funding.

Pariat outlined a possible alternative arrangement, however, which was also presented in the letter to Swiss NGOs: This would see third-country NGOs working as implementing partners with other NGOs who remain eligible for EU funds. An EU official said talks on this are underway with Swiss NGOs.

According to the official, the letter means that from Jan. 1, ECHO can no longer fund new humanitarian action where a third-country NGO is the lead partner, although contracts that have already been signed with Swiss NGOs “will remain unaffected and will be implemented until their natural end date,” the official added.

However, they denied any connection between Brexit and the defunding of Swiss NGOs, saying: “This decision was based on an in-depth legal review which was due by the end of the year in the context of the expiry of current Framework Agreements at the end of 2018 and is therefore in no way linked to Brexit.”

The decision has nonetheless raised concerns in the U.K. The secretariat of the International Development Committee, the parliamentary group responsible for scrutinizing U.K. aid work, said it would seek clarification from international development secretary of state Penny Mordaunt on what the decision on Swiss NGOs means for organizations in the U.K.

A spokesperson for the U.K. Department for International Development said it had been raising the question of eligibility rules for EU humanitarian programs with the European Commission and EU member states for some time.

“If EU rules prevent the best NGOs from bidding for funding, it’s only their own humanitarian programs that will suffer,” the DFID spokesperson said. They added that the U.K. government has already agreed to underwrite existing contracts between ECHO and U.K. aid organizations in the event of a no-deal Brexit.

Ben Truniger from the Swiss Foundation for Mine Action — one of the organizations that received the letter — said an ECHO representative told him they were just as surprised and disappointed as the NGOs to be pulling their funding.

“ECHO are not at all happy,” Truniger said, adding he’d been told that ECHO had long considered the existing legal basis under the convention “outdated” but that the change to defund Swiss NGOs had been imposed on them by the commission’s legal department. The commission did not respond to request for comment on those concerns.

Truniger said the Foundation for Mine Action attended an ECHO conference in Brussels in November where officials had emphasized their eagerness to find ways to continue working with U.K. NGOs after Brexit. No mention was made of the pending decision to defund third-country NGOs at the meeting, he said.

Instead, ECHO flagged that it would extend the existing FPA — due to conclude at the end of 2018 — by two years, as it continued reflections on how to make improvements for the next iteration. Around Dec. 18, the foundation received a letter asking it to sign on for the FPA extension. Three days later it received the termination letter.

When it sought clarification from ECHO, it was told it had been sent the extension letter by mistake as this was supposed to be withheld from Swiss NGOs, Truniger said.

Switzerland is also in the process of negotiating a broad accord on its future relationship with the EU, but commission officials said this was unrelated to the decision to defund NGOs.

“We are never in any punitive state of mind when it comes to cooperating with very close partners, which Switzerland is for the European Union,” a commission spokesperson told reporters earlier this week.

Claire Godfrey, head of policy and campaigns at the development network, Bond — which represents more than 400 U.K. NGOs and aid organizations — wrote in a statement that the Swiss had been “caught in the crossfire” of Brexit negotiations.

For U.K. NGOs, the latest developments “appear to confirm that [they] will no longer be able to have a partnership agreement with the EU’s humanitarian office (ECHO) when it leaves the EU. This means a loss of UK expertise, now along with Swiss,” she added.

About the authors

  • Vince Chadwick

    Vince Chadwick is the Brussels Correspondent for Devex. He covers the EU institutions, member states, and European civil society. A law graduate from Melbourne, Australia, he was social affairs reporter for The Age newspaper, before moving to Europe in 2013. He covered breaking news, the arts and public policy across the continent, including as a reporter and editor at POLITICO Europe.
  • Sophie Edwards

    Sophie Edwards is a Reporter for Devex based in London covering global development news including global education, water and sanitation, innovative financing, the environment along with other topics. She has previously worked for NGOs, the World Bank and spent a number of years as a journalist for a regional newspaper in the U.K. She has an MA from the Institute of Development Studies and a BA from Cambridge University.