Derisking, a continued barrier to humanitarian assistance
Bank derisking continues to be an increasingly prominent challenge for non-governmental organisations (NGOs). To respond to emergency needs, humanitarian organisations must be able to transfer funds to affected regions. It is well recognized, however, that humanitarian transfers to settings affected by sanctions and counterterrorism measures often encounter significant delays and are sometimes rejected entirely. This is because, in the face of regulatory complexity and ambiguity, financial institutions take a cautious approach to facilitating humanitarian transfers or refrain from engaging in them at all. This jeopardises humanitarian responses and prevents aid from reaching those most in need in a timely and principled manner.
Convening for global solutions
In response to these challenges, in 2022 the Norwegian Refugee Council organized a 'dialogue series on solutions to bank de-risking.' The series brought together experts from the financial sector, governments, and humanitarian organisations resulting in the development of several recommendations regarding how to address challenges related to bank derisking.
One of these recommendations highlighted the need to improve legal protections for those banks handling humanitarian transfers to high-risk areas. To address this issue, NRC convened a high-level advisory group including experts from 15 globally operating financial institutions based in the EU, Switzerland, the UK, and the US in 2024.
Recommendations from representatives from 15 financial institutions
The initiative produced three policy briefs addressed to (1) national and supranational regulators, (2) the Financial Action Task Force (FATF), and (3) national tri-sector groups. The project was supported by the European Commission (DG ECHO) and Switzerland’s Federal Department of Foreign Affairs (Peace and Human Rights Division).
Produced resources
The policy briefs can be found below:
- Executive summary of all recommendations
- Recommendations to the FATF and in the implementation of the risk-based approach
- Recommendations on strengthening national tri-sector groups
- Recommendations to National and regional regulators
