3. Risks and impact on humanitarian operations

Risk categories and operational impacts 

Tool 2: Risk categories and operational impacts

Criminal and civil liability

Investigation and prosecution under counterterrorism laws: Some countries’ broad definition of prohibited support for terrorist groups or acts of terrorism in their domestic legislation poses a risk for humanitarian organisations and their staff, who could face investigation and prosecution if their activities are deemed to fall within the scope of the crime. Local staff may be particularly exposed to risks under the host country’s counterterrorism legislation. 

Civil liability: In some countries such as the US, organisations may also face civil liability under laws such as the Anti-Terrorism Act if it can be argued that their activities (even unintentionally) assisted in the commission of acts of terrorism.

Sanctions violation

Liability for sanctions violation: Humanitarian organisations and their staff may be held accountable for violating sanctions, which is most likely to result in fines or civil penalties. A growing number of countries and sanctioning bodies, however, have introduced measures to punish violation or circumvention of sanctions more severely. For example, the EU adopted a directive on the criminalisation of sanctions violation in 2024.

Operational

Delays in negotiating terms of grant agreements: The inclusion of sanctions and/or counterterrorism clauses in grant agreements can delay humanitarian activities while organisations negotiate with donors to avoid problematic requirements or seek clarity about wording. Some specific requirements, including screening and/or vetting procedures, may also delay the provision of assistance.   

Delays in obtaining specific authorisations: If humanitarian exemptions are not in place, the process of applying for licences or derogations for specific activities otherwise prohibited can be time-consuming. For example, obtaining an export licence or a specific authorisation to conduct a transaction necessary for humanitarian activities. 

Delays caused by private and financial sector derisking: Banks may refuse, or take longer than expected, to provide transfers to locations perceived as high risk to minimise their own exposure to accusations of facilitating the financing of terrorism. Other private sector actors, such as insurance companies and suppliers, may also refuse to offer services to humanitarian organisations for fear of violating sanctions.

Chilling effect: Overlapping sanctions and counterterrorism measures can create a complex operating environment with the resulting uncertainty about which measures apply and what restrictions they impose producing a chilling effect. Humanitarian organisations and indeed the private sector may self-censor and operate in ways that are more restrictive than necessary for fear of violation. 

Increased costs: Large international organisations may have to invest hundreds of thousands of dollars in screening software, human resources and legal counsel to ensure their operations comply with overlapping sanctions and counterterrorism measures. Donors do not always cover such costs, and many local organisations are unable to afford them.

Establishing a bad precedent and weakening collective redlines: This can occur when one organisation accepts a sanctions or counterterrorism clause in a grant agreement that others deem unacceptable. Some organisations may not accept such clauses and instead continue to negotiate more acceptable terms, but their leverage and ability to do so is weakened if others have already accepted the problematic requirements. 

Lower quality and relevance of response: Compliance with donor sanctions and counterterrorism requirements may push organisations to choose activities perceived as lower risk even if they are less appropriate and effective, for example replacing cash with in-kind assistance to avoid beneficiary vetting requirements from the donor.

Legal risks

What are the legal risks for humanitarian organisations and their staff?

Given the broad definition of some criminal counterterrorism offences, humanitarian organisations and their personnel may, in some case, face risks of prosecution. While risks exist and it is important to identify and manage those, it is also crucial not to overstate the risks, which could encourage overcompliance.

Some humanitarian organisations have faced legal cases:

• Several NGOs operating with US funding have been investigated by US authorities over a potential breach of United States Agency for International Development (USAID) certification on the basis of having provided “training and expert advice or assistance” to proscribed terrorist groups in programmes funded by other donors.
• Host authorities have suspended or terminated humanitarian organisations’ operations on suspicion or accusation of supporting the activities of proscribed groups. In specific contexts, NGOs have been dissolved by a judicial or governmental decision (See Deep Dive II). 
• There are also rare cases of civil society organisations being proscribed as a terrorist entity under states’ counterterrorism laws. 

There have also been several cases where humanitarian personnel have faced criminal prosecution under domestic counterterrorism laws. Though not frequent, they act as a major deterrent. Broad definition and terminology on what constitutes ‘support to terrorism’ can offer ample grounds for authorities to reclassify humanitarian activities as criminal offenses under domestic legislation. Offences may include the indirect financing of terrorism and broad forms of association with designated groups as well as material support laws. 

Authorities in Cameroon arrested and detained five members of Médecins Sans Frontières (MSF) in 2022 when they were transporting an injured person, officially for being “involved in an operation to exfiltrate a terrorist”. A military tribunal acquitted all five in January 2023, but only after they had spent several months in prison.

Healthcare workers have also reported fearing legal risks in some settings because they are obliged to report certain types of injury, such as gunshot wounds, to the authorities. Doing so may be contrary to medical ethics, but failure to do so may result in prosecution.

Case study: Tax payments to designated groups

NGO X is a UK-based international humanitarian organisation that runs large-scale programmes in areas affected by conflict. This includes an area controlled by a group designated under the UN’s sanctions against al-Qaeda and the IS group. There are no international staff based in the area because of access and security concerns, so operations are managed remotely. 

NGO X put out a tender for the provision of trucked water in the area. The process was administered remotely as per the organisation’s standard operating procedures. After the tender process, one of the bidders claimed that local contractors had to pay five per cent tax to the de facto authorities.

NGO X’s field coordinator based in the area confirmed this was the case. This was the first time the remote management team had been informed that field staff were aware of the tax. 

No current or previous tender bids had mentioned it and they were very detailed, so it appeared that the tax, which amounted to thousands of dollars, had been included in bid documents in a way that obscured it from the organisation. 

The payment of tax to a designated group clearly raised concerns. A report was provided to NGO X’s remote management team, which immediately suspended the signing of new contracts until the matter could be fully considered. The organisation also made an initial declaration to its donors and sought legal advice on sanctions and counterterrorism compliance.

Legal counsel advised that the humanitarian exemption in UNSCR 2664 covered the payment of taxes to the group and protected the organisation from violating sanctions, but that it could still be liable under UK counterterrorism law because no explicit safeguard existed. 

NGO X decided to raise the issue with OCHA, asking it to intercede with the local authorities to seek a waiver that would exempt humanitarian organisations from paying the tax for services that contributed to the provision of relief. The engagement, which was undertaken with other affected organisations, was successful and a waiver was granted.

NGO X then engaged the donor that funded the project in discussions about risk sharing. The donor agreed that the payments in question did not constitute significant irregularities but chose to classify the costs as non-eligible and subject to repayment.

The incident sheds light on the challenges inherent in providing aid in areas controlled by designated terrorist groups, and in managing operations remotely. It also shows that internal checks and balances can help to mitigate issues that may arise from remote management, and that coordination and collaboration among humanitarian organisations and donors is essential to find solutions.

Deep dive II: Engagement with designated entities

The misperception that contact with members of groups designated under sanctions or proscribed under counterterrorism measures can lead humanitarian organisations to self-restrict their engagement unnecessarily. 

There are no counterterrorism measures or sanctions that prohibit contact with designated groups for the purpose of coordinating humanitarian action. Such a prohibition would be inconsistent with IHL and the humanitarian principles. The UNSC and the UN Secretary General have explicitly underlined that humanitarian organisations must be able to engage with all parties to a conflict, irrespective of any sanctions or designations.

Sanctions do not prohibit contact with sanctioned entities. Financial sanctions prohibit making funds or resources available directly or indirectly to designated individuals and groups, but they do not prevent contact with them. As such, humanitarian organisations may be prevented from handing over assets to a designated entity, such as the ownership of a completed WASH project, but can coordinate assistance and project implementation with the entity if relevant. 

European Commission guidance on the delivery of humanitarian assistance in such circumstances states that “EU sanctions do not establish a no-contact policy’’, nor do they prohibit “liaising with designated persons”. It also states that “it is not prohibited to meet with a designated person to discuss practicalities of the delivery of humanitarian aid to people in need located in areas under its control. However, that person must not, inter alia, receive funds, goods, trainings or other services or knowledge from which it can draw financial benefits”.

Some counterterrorism laws include crimes that relate to meetings with proscribed groups, but most do not prohibit such meetings for the purpose of discussing humanitarian action. At the time of writing, the only known prohibition on contact with a designated group arises from a donor policy related to a specific setting. It applies to organisations that operate in Gaza and receive funding from USAID. The notice was issued first in 2006 and prohibits contact with entities controlled by ‘designated terrorist organizations’.

The US material support statute prevents other types of engagement with designated groups beyond that necessary to coordinate humanitarian action, such as providing training. It does not prohibit engagement for the purposes of delivering aid.

Despite there being no legal prohibitions on engaging with groups or entities listed under sanctions or counterterrorism measures, however, the broad and vague language of counterterrorism measures often leave aid workers fearing that humanitarian negotiations with NSAGs or designated de facto authorities to access populations in need could be criminalised unless there is a relevant humanitarian exemption. In several contexts, legal ambiguity, combined with a climate of suspicion of aid work, intimidation or arrests have resulted in risk aversion by NGOs, with organisations refraining from negotiating access with armed groups or their proxies for fear of criminal consequences, effectively leaving communities in need unattended.

Deep Dive III: Bank derisking

Bank derisking is a form of overcompliance that occurs when banks restrict or end business relationships with certain clients to avoid, rather than manage, risk. As the number of sanctions and AML and CTF measures has increased, so have derisking practices, driven mostly by banks’ own compliance requirements and concern about major financial and reputational risks and profitability.

Banks may refuse to offer services, such as accounts or funds transfers, to organisations or locations perceived as high risk to avoid potential fines or other repercussions. There are very few incentives for banks to provide services for humanitarian organisations, given that they are widely considered to be high-risk, low-profit customers.

Humanitarian organisations often do not receive any information from financial institutions, on why a transfer has been delayed or blocked and on which banks are involved in a particular transaction. When an international transfer is made, the sending and receiving banks may not use the same payment system, in which case they must rely on a network of correspondent banks to execute the payment. The correspondent bank may block a payment if they feel the destination country is high risk, or if there is not enough detailed information on the transfer.

Humanitarian organisations have no direct communication with the correspondent banks to provide further information or to establish a relationship. As much as a third of donor funds for the response to the Syria crisis were held in limbo for months in 2018 because of delays in the correspondent banking system.

Financial sector derisking practices have a significant impact on humanitarian operations. Extensive investments in time, resources and training are required to track and investigate payments, which delays programmes and increases costs. When financial channels to a country are severely restricted, organisations may resort to riskier methods to get funds in, such as carrying cash.

Delays in salary payments also have significant implications for local staff, many of whom are the sole breadwinners for extended families. Vendors who are not paid promptly become reluctant to do further business with organisations, and in some cases have threatened staff.

Tri-sector working groups as spaces for dialogue

A number of ‘national tri-sector working groups' have been set up in recent years to bring representatives from governments, financial institutions and the NGO community together to find policy solutions to derisking and reduce obstacles to the provision of aid. 

National tri-sector groups tend to be most successful when a variety of stakeholders are represented, including the private sector, organisations with diverse mandates and a range of government ministries.24 They play an essential role in building trust and understanding between the sectors and putting solutions into practice. They can also act as an important interlocutor for FATF assessment teams during their national risk assessments as well as for sustained advocacy efforts on improving the taskforce’s methodology and guidance (see below). 

Humanitarian organisations should seek involvement in national tri-sector groups to ensure their operational realities are highlighted in discussions. For a checklist on best practices when establishing such a group, see Tool 6.

FATF

FATF is an inter-governmental body responsible for setting standards and regulations to combat the financing of terrorism and money laundering. It develops recommendations for governments regarding how to regulate counterterrorist financing, including specific recommendations on regulating the non-profit sector. Its recommendations are non-binding, but non-compliance may result in “black-listing” or “grey-listing”. This can limit a state’s access to international financial markets and investments, giving governments a strong incentive to comply with FATF recommendations.

FATF recommendation 8

FATF recommendation 8 provides guidance for countries on how to assess and manage the risk of non-profit organisations (NPOs) being exploited for the financing of terrorism. In 2001, FATF identified NPOs as “particularly vulnerable” to exploitation which resulted in banks becoming increasingly cautious in their dealings with NPOs. The recommendation has since undergone several revisions, and now directs governments to take a more nuanced and risk-based approach when developing counterterrorist financing measures to avoid the disruption of legitimate non-profit activities. 

FATF published new amendments to recommendation 8 and updated its best practices paper in 2023. Its guidance now recognises the diversity of the non-profit sector and the robust risk management mechanisms non-profit organisations implement.

FATF – black-listing and grey-listing 

FATF assesses countries every five years on their compliance with its standards. If found to be non-compliant they can be subject to additional monitoring, known as grey-listing, or told to take action to tighten their counterterrorist financing measures, known as black-listing. It can be more difficult for humanitarian organisations operating in a FATF-listed countries to transfer funds.

Misuse of FATF regulations

In some contexts, FATF standards have been used by governments to disproportionately target NPOs, limiting their access to financial services and creating bureaucratic procedures that curtail the activities of civil society. NPOs may have difficulty opening bank accounts, have limits placed on cash withdrawals and face burdensome reporting requirements. Countries can justify such restrictions as the implementation of FATF recommendation 8. The overregulation of NPOs has forced some to reduce or cease programming in certain countries. 

NPOs are encouraged to engage with FATF during their national risk assessments to ensure that a risk-based approach is applied to the non-profit sector and that any unintended adverse impacts of countries’ implementation of its recommendations are considered. The NPO Coalition, an umbrella group of civil society organisations formed to advocate with FATF, provides guidance on how to engage with the FATF to raise awareness of financial access issues during national assessments.

Deep dive IV: Impact on cash and voucher programming 

Cash and voucher assistance (CVA) tends to be the type of programming most affected by sanctions and counterterrorism measures. Some donors, host countries and financial institutions have sought to impose specific limitations on its use, despite research showing that CVA is more effective and no riskier than other forms of aid.  

Donor policies: Donors have in some cases increased scrutiny of their partners’ risk management policies and procedures when CVA is used in a setting where sanctions or counterterrorism measures apply. This tendency toward risk aversion was reflected in a decision by what was then the UK’s Department for International Development in April 2019 to pause its support for CVA in north-east Syria as a precautionary measure over concerns about the risk of diversion. 

Some development donors include additional clauses in grant agreements that require implementing partners to screen people who receive CVA, a requirement that is incompatible with the humanitarian principles and represents a red line for humanitarian organisations.

In some cases, humanitarian organisations switch from cash-based to in-kind assistance if donors refuse to fund CVA activities in certain areas owing to aid diversion concerns, or to avoid breaching humanitarian principles. This is despite CVA being a more effective and efficient form of aid and donors’ commitments to increase its use.

Host country restrictions: Authorities in countries where humanitarian organisations operate may impose restrictions on CVA to combat the financing of terrorism. In 2019, Nigeria introduced additional controls on case transfers to regions where NSAG operated by suspending them for several months and then imposing a requirement for weekly advance notifications and approvals, ceilings and restrictions on destinations and recipients. CVA was also banned in regions of Burkina Faso under NSAG control in 2023, despite their hosting many internally displaced people.

The Cash and Learning Partnership (CaLP) provides technical and policy support for the CVA community of practice and cash working groups to develop shared risk registers informed by national regulations and practices.