Resources

UK Study: Four-fifths of Charities Impacted by Bank Derisking

Date: 
April 5, 2018

A new study from the UK's Charity Finance Group found that 79% of charities face some kind of difficulty in accessing or using mainstream banking channels. The same number of respondents also said that banks had become "substantially or slightly more risk averse to them."

The report is based on results from the survey responses of 34 charities, ranging from medium and large organizations. Eighty-eight percent had income over £1 million, all worked overseas, 62% were secular organizations, 21% identified as Christian, and 12% as Islamic. The types of work conducted included humanitarian, sanitation, peacebuilding, medical assistance, research, human rights, education, welfare, children, grantmaking and environmental protection. Eighty-three percent worked in Africa, 74% in Asia and 62% in Europe. More than 50% worked in the MENA region. 

The report, Impact of money laundering and counter-terrorism regulations on charities, found the following results:

41% had transfers delayed by a correspondent bank
32% had transfers delayed by their bank
27% had transfers denied by their bank
20% had transfers denied by a correspondent bank
15% had accounts closed
15% had delays in opening bank accounts
8% had donations blocked
8% had funds frozen
6% had accounts denied 

For most respondents, banks did not provide any explanation for why the charities were being derisked. Read more

Abstract: Can Political Violence be Reduced via Economic Interventions?

Date: 
April 4, 2018

The primary goal of a study conducted by Mercy Corps was to test the possible causality between young people’s improved economic outcomes and their support for political violence -- defined as “violence targeted primarily at the state." 

The study, Can Economic Interventions Reduce Violence?, examined young people’s economic conditions, psychosocial well-being, and perceptions of government to see how interventions may reduce willingness to support armed opposition groups (AOGs). The research focused on youth in the Kandahar Province (second largest city in Afghanistan), afflicted by high unemployment rates and violence. Though the provincial government maintains control of Kandahar and neighboring districts, AOGs, such as the Taliban, still have a strong influence in the area.

International Stakeholder Meeting Moves Derisking Dialogue Forward

Date: 
April 4, 2018

On February 15th, 2018, the Ministry of Finance of the Netherlands, the Human Security Collective and the World Bank hosted an international stakeholder meeting with on derisking of nonprofit organizations (NPOs) in The Hague. New research on the impact of derisking of NPOs was presented and 75 representatives from NPOs, governments, international organizations, financial institutions and academia shared their knowledge and insights during three roundtable sessions, which took place under Chatham House Rules. Discussions included the impact of financial access challenges for NPOs, banks' concerns about regulatory actions and costs of compliance, and policy implementation and coordination

In the realm of new research, a recent study by the London School of Economics found that in some cases aid organizations and other NPOs will “cease to provide assistance” because of refusal from banks to take on the risk. When sending international wire transfers, banks may demand extra information such as detailed lists of beneficiaries. This not only delays the transfers, but also endangers local contacts in conflict areas because of the degree of  transparency it entails. While Significant Well-Established Entities (SWEEs), or larger NGOs, are better able to mitigate the requirements of an increased due diligence threshold, smaller NPOs often lack the resources and operational framework to do so. Raising mutual awareness among NPOs (via roundtable initiatives) is important to bolster engagement. Also, pooling resources within the broader NPO sector, coupled with a continuous exchange of information, could be beneficial. Read more  

States of Emergency are No Excuse for Sustained Human Rights Violations

Date: 
March 21, 2018

In the first report since her appointment in August 2017, Fionnuala Ní Aoláin, UN special rapporteur on the promotion and protection of human rights and fundamental freedoms while countering terrorism, details the relationship between states of emergency and sustained human rights violations. In the report (A/HRC/37/52, 27 February 2018), she encourages governments to adopt guidelines while countering terrorism to address the problems of permanent emergencies.

“Recalling that human rights law considers war as a justified legal basis for the declaration of emergency … the post-9/11 articulations of fighting a global war on terror may have muddied the legal and rhetorical waters on the legal basis for emergency powers,” the report states.

What Is the State of Civil Society?

Date: 
March 12, 2018

For civil society, the past year has been "one of resolute resistance against the rising tide of restrictions on fundamental freedoms and democratic values," according to CIVICUS’ 2018 State of Civil Society Report. Sobering data from the CIVICUS Monitor reveals serious systemic problems with civic space in 109 out of 195 countries covered, it notes. At the same time, "there are also numerous examples of civil society successfully advocating for progressive new laws on women’s rights, access to information and protection of human rights defenders."

Findings from the report point to 10 key trends impacting civil society in 2017. There are increasing instances of personal rule by political leaders replacing the rule of law and undermining democratic institutions in many countries. Polarizing politics and unjust economic systems propelled by cronyism are dividing societies and reducing the international community’s ability to address key global challenges such as violent conflict, inequality and climate change. Read more

CGD Looks at Techology to Solve Derisking

Date: 
February 22, 2018

While nonprofit organizations advocate for policy changes to address the global phenomenon of derisking, financial institutions are creating cutting-edge technologies to speed and improve their compliance with anti-money laundering regulations.

A new study from the Center for Global Development assesses six new technologies and their potential to solve the derisking problem. Fixing AML: Can Technology Help Address the De-Risking Dilemma?  examines machine learning, biometrics, big data, know your customer (KYC) utilities, distributed ledger technology (DLT)/blockchain, and legal entity identifiers (LEI). Machine learning is a type of artificial intelligence that could cut down on false alerts and identify undetected illicit finance techniques. Biometrics are much more robust than passwords or tokens and generally easier to use. Big data refers to datasets that are high in volume, velocity and variety and their applications offer more scalable storage capacity and processing. They also allow different types of data to be stored in one place, so compliance staff spend less time gathering information from disparate sources. They can greatly expand the range and scope of information available for KYC and suspicious transaction investigations. (Read more)

ODI Report: Impact of Derisking on Humanitarian Response in Yemen

Date: 
February 13, 2018

As bank "derisking" persists, areas of dire humanitarian need around the globe are hardest hit. In the case of Yemen, individuals, nonprofit organizations (NPOs) and businesses alike have been adversely affected by this global trend. 

A new study from the Humanitarian Policy Group at the Overseas Development Institute (ODI), Counterterrorism, de-risking and the humanitarian response in Yemen: a call for action, examines the impact of derisking on humanitarian organizations in Yemen, and the degree of financial access afforded these groups.In Yemen, bank derisking has prevented Yemeni non-governmental organizations (NGOs) from receiving much-needed funds for humanitarian assistance, especially following the onset of war in March 2015, the study found. Derisking is contributing to the war economy and corruption in the country. 

Given the fact that Yemen represents on of the world's largest humanitarian crises, the study highlights the urgent need to address the adverse effects of derisking in the country. 

The study makes four recommendations to alleviate this problem, including facilitating the flow of funds through a proportional approach to counter-terrorist financing (CFT), lifting the economic sanctions on Yemen, revitalizing Yemen's central bank, and revisiting American and European CFT policies. 

Read the full report

Report Examines Better Ways to Engage with Muslim Humanitarian Sector

Date: 
February 6, 2018

A new report, The Muslim Humanitarian Sector: A Review for Policy Makers and NGO Practitioners, seeks to better understand the barriers to and opportunities for greater cooperation with the Muslim aid and development sector. 

Researchers from the British Council and Georgia State University, working under the auspices of the EU Commission's Bridging Transatlantic Voices Initiative,  convey insight gained on the history and fugure of engagement between Muslim groups and their counterparts in the mainstream international aid and development sector. 

According to the report, a global concensus has emerged that faith-based organizations are in a special position to address "shared global challenges rooted in problems of political conflict, violence, and extremism." Coupled with this are long-standing gaps in communication, knowledge, and practice "between conventional actors and their lesser-known counterparts in Muslim majority contexts" that reduce the capacity for the "effective implementation of policy strategies addressing the nexus of aid, development, and security in the greater MENA region." The current conditions in the region, including political conflict, humanitarian need, and aid flows make this an even more pressing issue. 

Abstract: How Derisking Impacts Women Peacebuilders in the MENA Region

Date: 
December 19, 2017
Author: 

Women peacebuilders from around the world have increasing voiced concern about the impact of the derisking phenomenon. To learn more, Women Peacemakers Program held a regional consultation in Lebanon in January 2017 that was attended by 12 civil society organizations focused on peacebuilding and women's rights. 

The resulting consultation report, Women Peacebuilders from the MENA Region Discuss Shrinking Civil Society Space Due to Countering Terrorism Financing, provides brief background information on the issue of counter-terrorism financing, its impacts on women's civil society organizing the MENA region, and key recommendations formulated by the consultation's participants. 

Read the report.

Financial Inclusion Conference Issues Report

Date: 
December 19, 2017
Author: 

On October 2, 2017, Charity & Security Network joined more than 60 members of civil society, government, intergovernmental organizations, academics and the financial sector in The Hague to discuss the impact of countering terrorism financing regulations on shrinking civil society space and to develop policy recommendations. 

The meetings, cosponsored by C&SN, the Women Peacemakers Program, Duke Law International Human Rights Clinic, Human Security Collective and Transnational Institute, resulted in a new conference report, Financial Inclusion for Freedom and Security. The report identifies five core areas of impact, including reduced space for women's rights organizing; impacts on programs, partners and beneficiaries; financial exclusion; prohibitive costs of due diligence and other administrative burdens; and adaptive measures affecting the safety and security of women's rights organizing. The report also summarizes C&SN's February 2017 financial access report and the meeting's discussion around it. 

The conference report sets out a series of recommendations, including, but not limited to creating long-term dialogue with the financial and government sectors, reasonable risk sharing, and donor investment in direct funding mechanisms. 

Read the report

Pages