An interview with Thierry Mauricet, Director General of Première Urgence Internationale, on the consequences of sanctions regimes and anti-terrorist measures on bank transfers by humanitarian organisations.
Alain Boinet: Thierry, can you tell us what are the concrete consequences of sanctions regimes and anti-terrorist measures on the bank transfers of humanitarian organisations to finance their aid projects for populations affected by crises and what are the consequences?
Thierry Mauricet : The humanitarian aid provided by NGOs cannot be done without financial means. In addition to fundraising through public generosity (which demonstrates the confidence of citizens in non-governmental humanitarian organisations), most NGOs benefit from funding from institutional donors such as the European Commission or various UN agencies such as the UNHCR, UNICEF, WFP, to name but a few. Similarly, many states allocate funds to aid agencies such as the United States through The United States Agency for International Development (USAID) or The Office of U.S. Foreign Disaster Assistance (OFDA), or Great Britain through the Department for International Development (DFID), not forgetting the Crisis and Support Centre (CDCS) of the French Ministry of Foreign Affairs or the French Development Agency (AFD).
This funding often concerns assistance programmes for populations living in countries under embargo and/or under financial sanctions set up by the UN, the European Union, the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury, not forgetting states, including France. Public humanitarian aid donors are obviously aware of this. By granting funds to NGOs, they recognise that humanitarian organisations in their field work are not affected by these regulations.
However, from January 2015, following the heavy financial sanction imposed on BNP Paribas by the US Department of Justice for violating the US embargo on certain countries, French banks have all progressively tightened their banking compliance rules. While this approach is understandable (as they fall under the French Banking and Financial Regulation Act and the Monetary and Financial Code), it now makes it extremely complex, and sometimes even impossible, to transfer the funds needed to implement humanitarian aid projects to countries under embargo and/or financial sanctions, when humanitarian crises are taking place there. These compliance standards may even extend to third states not covered by an international sanctions regime, but located in areas considered “at risk”.
The countries concerned by the geographic and/or thematic (to combat the financing of terrorism) sanctions regimes in force are currently the following:
Afghanistan, Belarus, Burundi, Central African Republic, Democratic Republic of Congo, Guinea-Bissau, Guinea, Iran, Iraq, Lebanon, Libya, Mali, Myanmar, Nicaragua, Niger, North Korea, Somalia, Sudan, South Sudan, Syria, Ukraine, Venezuela, Yemen, Zimbabwe. NGOs are present everywhere.
French banks thus systematically request that each transfer be documented (employment contract and pay slip for expatriate salaries when their name or nationality is suspected, contract from institutional donor(s) for sending cash or payments from suppliers to the countries of intervention, etc.). However, this increasing administrative burden is now almost the “ideal” case for an NGO, as many banks now totally refuse to execute transfer orders to these countries despite all the authorisations and derogations obtained and produced by NGOs from DG Treasury, the United Nations and the Office of Foreign Assets Control (OFAC).
Remittances are essential to the implementation of humanitarian aid in the field, and to do this, NGOs based in France need to use the French banking system. However, given the obstacles caused by the excessive interpretation of compliance rules by almost all banks, they are increasingly obliged to ask their staff to carry out the physical and cash delivery of the funds needed to continue aid projects, or to use parallel cash transfer systems via money transfer agents. These alternative methods of transferring funds limit the capacity of NGOs to act and expose their staff to security risks. Indeed, in addition to the risks incurred by physical transfers, delays in payments from local suppliers can also lead to serious security problems for NGO staff.
To illustrate these banking difficulties from another angle, NGOs also face problems in receiving the funds allocated to them by institutional donors. Indeed, when these payments are addressed to NGOs and they concern a project taking place in a country subject to embargo and/or sanctions, it is not uncommon for these payments to be blocked by the recipient bank on the grounds that the transaction is contrary to its compliance policy (including when these funds are addressed by the US Department of State, which is the equivalent of the Ministry of Europe and Foreign Affairs).
These difficulties in transferring and receiving funds have an impact on the NGOs’ cash flow and consequently on their teams in the field, which is a hindrance, not to say an obstacle, to relief and assistance operations which are nonetheless essential to the vulnerable populations we assist.
Faced with the risks of fraudulent use of funds in crises where groups labelled as terrorists operate, humanitarian NGOs have taken numerous protection and control measures. What are they and is this sufficient?
Accountability and transparency are key to the legitimacy of humanitarian NGOs. Protecting against the risk of misappropriation of funds is a constant concern. Accounting for the funds they have, the way they use them and the programmes they run is an integral part of their operational and financial management. Various codes of conduct, to which many NGOs adhere, as well as widely shared organisational practices, are a reminder of the need for any association to see itself as accountable both to aid recipients and donors.
In practice, the achievement of these objectives mobilises various stakeholders within and around the NGO: private or public aid donors with their demands for rigour, transparency, accountability, traceability and efficiency; the national and international staff of the NGO for whom commitment, motivation and quality are cardinal values; the populations receiving the NGO’s programmes who, in their vulnerable situation, expect speed, efficiency, quality, relevance and sustainability.
In order to comply with these various requirements, and to explain to donors, the public and any control body, how donations and funding are distributed, what they have been used for and the expected results, the associations have always implemented concrete mechanisms to mobilise and hold accountable those in charge of carrying out projects and, at the same time, submit to external processes of results evaluation and accountability.
It is important to note that in recent years, NGOs have been faced with an exponential increase in control and audit mechanisms (ex ante and ex post) on the part of public donors, despite the fact that they are sometimes redundant or out of step with operational realities. These growing administrative constraints are leading to a sharp increase in the number of staff employed by NGOs so that they remain capable of meeting them.
However, the “Grand Bargain”, launched at the World Humanitarian Summit in May 2016, was concluded with an agreement between the largest donors and humanitarian agencies (24 states including the UK, the USA, France, Germany, Sweden, Switzerland and the European Commission) committing them to improving the efficiency and effectiveness of humanitarian action in a number of ways, including harmonising and simplifying reporting requirements.
This commitment has in fact remained ineffective and each donor still tends to have a unique understanding of the elements of its relationship with NGOs, which then have to juggle different policies, administrative and operational constraints, modes and frameworks.
In order to demonstrate that NGOs are achieving the programme objectives for which funds were raised, it is time for public donors to focus their legitimate demands for accountability on striking the right balance between the operational processes of aid delivery and the establishment of control policies, systems and procedures.
Several years ago, you initiated this issue within the CHD, then Coordination Sud and within the framework of the Humanitarian Concertation Group with the Crisis and Support Centre of the Ministry of Europe and Foreign Affairs. What has been done so far and where are you today?
In February 2017, a working group entitled “Humanitarian Access & Banking System” was set up within the Humanitarian & Development Coordination (CHD), a collective of 52 NGOs. Since its creation, this group has brought together more than twenty member or invited NGOs. All the NGOs that participated in this first meeting reported the same difficulties with bank transfers and their growing concern that they would not be able to continue their relief operations if these blockages persisted and/or increased.
At the end of this first meeting, it was decided to organise a meeting as soon as possible between the NGOs and the different Ministries and State administrations involved in this issue (the Ministry of Europe and Foreign Affairs, the Ministry of the Armed Forces, the Ministry of the Interior and the Ministry of Economy and Finance, so that a common position can be adopted on this subject, from a tripartite (State/NGO/Banks) perspective of transparency and mutually agreed and guaranteed security, so that the banks can once again execute, in full confidence, bank transfer orders to countries under sanctions as well as to neighbouring States.
After explanation of the issue and a request addressed to the Director of the Crisis and Support Centre at the time, a meeting was organised at the end of 2017. Around the same table, a number of NGOs members of the CHD, representatives of the DG Treasury, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), the organisation for the processing of intelligence and action against clandestine financial circuits (TRACFIN), the Ministry of Defence, the Ministry of the Interior as well as several compliance officers from French banking institutions met. For most of these administrations and departments, the problem and its consequences were almost a discovery.
This was followed by numerous meetings between NGOs, the CDCS, the DG Treasury and certain bank compliance departments (which for the latter two had no knowledge of the accountability, control and compliance processes already in place in NGOs).
Parallel to these discussions, certain recommendations and statements were made on this issue in order to take into consideration the specific positioning of NGOs such as the National Consultative Commission on Human Rights in its October 2018 opinion, the United Nations Security Council in its Resolution 2462 of March 2019 or the Financial Action Task Force (FATF) through its Recommendation No. 8.
In 2019, banking blockages continued and were reinforced. The maximalist approach to risk management led some French banks to close NGO accounts on the grounds that their activities were taking place in countries subject to embargoes and sanctions, or requesting the signature of letters of affirmation stating that the NGO concerned was prohibited from operating in certain countries subject to the same sanctions. Coordination SUD (regrouping 175 NGOs) in turn became actively involved in this advocacy, and the new CDCS Director in turn took up the issue. Mandated by the Deputy Director of the Minister’s office, initiatives under the aegis of the CDCS have multiplied (inter-ministerial meetings, consultation meetings in Brussels) and NGO/DG Treasury/Banks meetings have continued.
At the beginning of January 2020, some NGO representatives were invited to meet the President of the Republic to discuss the humanitarian situation in Syria. It was on this occasion that I was able to talk about the difficulties we were encountering in terms of bank transfers. The President discovered the extent of the problems caused by these blockages in the banking system and asked the diplomatic unit of the Elysée Palace to look into the matter. Unfortunately, the Covid-19 pandemic hit France in turn a few weeks after this meeting, thus stopping the momentum.
The past 4 years have been a real journey of the cross to acculturate all these stakeholders who did not know how NGOs work. Convincing them of the good practices put in place by the NGOs (even though they are well known to the MEAE), and constantly demonstrating their professionalism and their great rigour, without obtaining any real relaxation from the banks, quite the contrary.
What about the practices of institutional partners in France, both CDCS and AFD? On this subject, it seems that AFD is now asking partner NGOs to draw up lists of beneficiaries to be sent to them. What is the situation and how are humanitarian NGOs reacting?
The increase in credits allocated to humanitarian action and national and international laws and regulations on Countering Money Laundering and Financing of Terrorism (LCB/FT) is leading French institutional donors to ask NGOs that receive their grants to set up an increasing number of accountability and traceability processes for financial flows.
Since the beginning of this year, CDCS and Agence Française de Développement (AFD) have strengthened the clauses in their grant agreements that require beneficiary NGOs to screen any legal or natural person that may be the subject of a financial or monetisable transaction. In other words, all expatriate and national staff, all suppliers and other service providers, and all partner NGOs must, before contracting and payment, be checked using screening software to ensure that these legal and natural persons are not on any list of sanctions or embargoes of the United Nations, the European Union and France.
Many of CDCS’s and AFD’s NGO partners do not have screening software which costs 20 000.00 euros per year, nor the staff, in sufficient numbers, needed to process these countless and time-consuming seizure operations.
For CDCS, considering the prevalence of International Humanitarian Law (IHL), screening is limited to partnership, commercial and salary transactions with any legal or natural person. To date, screening is required for each invoice and at the first euro, and for all staff paid before hiring and then on a regular basis, this method also applies to any partner legal entity.
On the other hand, AFD, considering the prevalence of banking regulations on its grant agreements, is adding to the scope retained by CDCS the screening of any transaction linked to programmes based on cash transfers and any monetisable donation (a simple pair of crutches is considered as an asset that can be resold and can therefore contribute to the financing of terrorism) in favour of any natural person, thus including the “ultimate” beneficiaries of aid (whatever their age).
Among the LCB/FT clauses of these agreements is the stipulation that the beneficiary (the signatory NGO) of the grant declares that “it has not directly or indirectly provided material support or other resources to any person or entity that commits, attempts to commit, advocates, would facilitate or participate in Acts of Terrorism, or has committed, attempted to commit, advocated, facilitated or participated in such Acts” thus introducing a paradoxical notion of the “predictive” faculty that an NGO could have, making it legally responsible in case of breach.
Discussions are underway with the CDCS to specify the screening procedures in order to make them effective from a benefit/risk perspective.
On the other hand, more than a dozen grant agreements, although approved by AFD, have not yet been signed by beneficiary NGOs.
These NGOs argue that the LCB/FT clauses in AFD’s agreements would force them to screen the “ultimate” beneficiaries of aid and that this screening is contrary to their values and IHL principles, a red line that cannot be crossed. Screening the “ultimate” beneficiaries would mean no longer selecting them on the basis of their needs, which would cause NGOs to lose their impartiality, a serious breach of humanitarian principles, and deprive them of their capacity to access.
In view of the next National Humanitarian Conference which will take place in Paris on December 17th, what do you propose with humanitarian NGOs to face the risk of a decrease, and sometimes even paralysis, of humanitarian aid in certain countries?
Topics related to “The impact of sanctions regimes and anti-terrorism measures on humanitarian aid” and “Respect for International Humanitarian Law and humanitarian access” will be discussed in two separate round tables at the CNH. The choice of these topics by NGOs and the drafting of these two round table titles alone reveal the level of concern of humanitarian aid actors.
In his statement to the United Nations General Assembly on 22 September, Emmanuel Macron recalled the importance of respecting international humanitarian law and the fundamental rights of all. He announced the construction of an initiative to ensure the effectiveness of international law, the protection of humanitarian personnel and the fight against impunity. Mr. Macron also underlined the fact that the Humanitarian Space is a common heritage that must be protected by guaranteeing access to civilian populations as well as the protection of the personnel who support them, and that “the neutrality of humanitarian action must be respected and its criminalisation stemmed”.
The President must attend the next session of the National Humanitarian Conference. The NGOs expect him to take this opportunity to announce concrete measures to put an end to the impunity of those who attack humanitarian personnel and the implementation of measures to safeguard the humanitarian space, in order to guarantee and respect the independence and neutrality of humanitarian actors, in line with his recent statements at the UN General Assembly.
It is also expected that, in the face of increasing sanctions regimes and anti-terrorist measures that put NGOs at risk from security and legal risks, it will announce specific exemption measures for humanitarian action and actors, thus reaffirming the prevalence of IHL over all other considerations.
The expectations of NGOs are equal to the threats to the humanitarian space and aid actors: very high.
Who is Thierry Mauricet?
After a degree in commerce from the European Business Institute, a law degree from the University of Paris X and a professional activity as an advertiser for 7 years, Thierry Mauricet co-founded the association Première Urgence in June 1992 to help the besieged populations in Sarajevo in Bosnia-Herzegovina. From 1994 to 2011, he was the association’s General Director.
Since April 2011, he has been the Director General of Première Urgence Internationale, an association resulting from the merger of the NGOs Première Urgence and Aide Médicale Internationale.
Première Urgence Internationale aims to provide integrated aid in the fields of health, food security, nutrition, rehabilitation and construction of infrastructures, access to water, hygiene and sanitation, economic recovery, education and protection, in favour of populations who are victims of humanitarian crises.
The annual budget of Première Urgence Internationale is €120 million. It enables us to implement 150 projects in 26 countries in favour of more than 7 million vulnerable people.
Associative activities :
– Adminsitrator of the Federation of the Voice of the Child from 14 March 1995 to 18 November 2006;
– Member of the National Consultative Commission on Human Rights from 10 May 1999 to 25 March 2009;
– Secretary for Humanitarian Coordination and Development from 6 May 2013 to 4 June 2018;
– President of the Humanitarian and Development Coordination since 4 June 2018;
– Administrator of Coordination SUD since 13 December 2018;
– Administrator of Coordination SUD since 13 December 2018; Director of Coordination SUD since 13 December 2018; Referring Administrator of the Humanitarian Commission of the Board of Directors of Coordination SUD since 26 September 19;
– Member of the Humanitarian Coordination Group of the Crisis and Support Centre of the MEAE since its creation in November 2013.