In recent years, the international community has increasingly leaned on sanctions and “de-risking” policies to curb terrorism financing and illicit monetary flows. Though conceived as security tools, these mechanisms often inadvertently obstruct humanitarian efforts. NGOs and international agencies repeatedly face financial barriers that delay, dilute, or derail life-saving aid in conflict zones and crisis-affected regions—without compromising on their principled commitment to urgency and neutrality.
Sanctions vs. Humanitarian Imperatives
Sanctions—particularly unilateral measures imposed by powerful states—aim to cut off resources from state and non-state actors deemed threats. But their implementation often exceeds intended boundaries. Financial institutions, concerned about ambiguous compliance requirements, frequently engage in over-compliance (or “over-blocking”), hampering legitimate aid transfers. For example:
- In Syria and Afghanistan, NGOs encounter major barriers transferring funds because international and domestic banks eschew SSR (sanction-exposed) jurisdictions entirely.
- The LSE’s Conflict Research Programme found that nearly one-third of all money intended for Syria remained in banking limbo, preventing NGOs from responding effectively to displacement and humanitarian needs.
- Research from the Lancet estimates that sanctions, particularly U.S. ones, result in approximately 564,000 excess deaths annually, comparable to casualties sustained in armed conflicts.
Beyond economics, the chilling effect has humanitarian consequences. A 2022 joint statement by 48 NGOs ahead of the European Humanitarian Forum emphasized that restrictive donor and counter-terrorism measures often do not differentiate NGOs from state actors, undermining neutrality and thus, the safety and effectiveness of humanitarian work.
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De-risking: Banks in Retreat
“De-risking” refers to financial institutions severing ties with clients or jurisdictions deemed “high-risk,” often preemptively. The motivation: avoid hefty sanctions or fines. Yet the consequences are severe:
- Banks reluctant to deal with NGOs operating in Syria triggered significant delays and outright refusals—often citing commissions as too minor to justify regulatory exposure.
- ODI findings revealed de-risking reduced accessible cash by at least 35%, with funds withheld for 3–5 months longer than historically typical—sharply increasing NGO operational costs and response times.
- For many small or local NGOs, these impacts are especially crippling. They lack the compliance infrastructure that larger organizations possess, which impairs their ability to access funds at all.
De-risking also drives NGOs to rely on informal or cash-heavy transfers. These carry amplified physical and financial risks—including extortion, theft, and loss of oversight.
Case Studies: When Security Measures Hinder Aid
Several notable examples illustrate the real-world consequences:
- Syria: Sanctioned banks and crippled correspondent networks have dramatically complicated euro or dollar transfers, trapping funds even when funding exists. In the wake of the 2023 earthquake, temporary humanitarian exemptions helped marginally, but their six-month duration was deemed insufficient to alter entrenched de-risking behavior.
- Yemen, Afghanistan, Mali: NGOs warned before the European Humanitarian Forum that counter-terrorism and sanctions provisions severely restrict their ability to respond effectively—especially in non-state controlled areas.
- Gaza and Palestinian Territories: In the West Bank and Gaza, fragmented governance (Israeli, PA, Hamas), overlapping documentation requirements, and AML/CFT constraints have placed local NGOs under siege—forcing them to navigate conflicting demands from multiple authorities and banks.
- Addameer (Palestinian human rights NGO): In June 2025, the U.S. imposed sanctions on Addameer, alleging ties to militant groups. Human rights organizations have contested this, arguing it undermines law-based advocacy and aid delivery absent clear evidence.
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Compound Effects and Programmatic Distortions
Sanctions and de-risking aren’t just financial hindrances—they reshape humanitarian landscapes:
- Self-censorship: NGOs may avoid certain regions or populations perceived as “risky” to evade financial or legal backlash—forcing decision-making on compliance, not need.
- Programmatic rigidity: Funding delays mean aid often misses critical windows. One study flagged that winterization or displacement-response programmes delayed months are frequently outdated upon implementation, compelling conservative substitutes.
- Structural exclusion: Smaller, grassroots and women’s organizations bear a disproportionate burden. Lacking donor recognition or compliance capacity, they are more likely to be de-banked, even if they hold crucial local access and expertise.
Toward a Balanced, Humanitarian-Sensitive Approach
Mitigating the adverse effects of these security-driven financial policies requires multi-tiered reforms:
- Clarify and Enforce Humanitarian Exemptions
Sanctions texts must include clear, binding provisions—translatable into unambiguous guidance—for banks on permitted humanitarian flows. Temporary waivers must be of sufficient duration to influence institutional behavior. - Create Fast-Track Licensing and Risk-Sharing Mechanisms
Governments and donors should implement streamlined licensing systems and even indemnity frameworks that incentivize banks to offer services to verified NGOs. The U.S. Treasury’s “de-risking strategy” and expanded general licences are steps in this direction. - Build NGO Compliance Capacity
Support for local and smaller organizations to develop AML/CFT protocols—through funding, training, and shared platforms—can help meet banking expectations and reduce closures. - Differentiate Between Malicious Actors and Humanitarian Entities
Financial institutions and regulators must distinguish between intentional abuses and inadvertent compliance lapses. Proportionate, corrective measures—rather than punitive withdrawal of services—can preserve aid flows. - Strengthen Multistakeholder Dialogue
Regular engagement between governments, regulators, banks, and humanitarian actors can align security objectives with principles of humanitarian action.
Security concerns underpinning sanctions and de-risking policies are legitimate. Yet their unintended consequences—ranging from delayed aid to elevated mortality—expose an urgent need for recalibration. As global crises proliferate, ensuring NGOs can operate with both financial integrity and logistical agility is not merely operational—it is profoundly moral. Striking this balance demands nuanced policymaking that recognizes life-saving aid as a priority, even within the toughest risk landscapes.
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