Many of the findings, in a report released by the Overseas Development Institute have been discussed before. It is increasingly common for NGOs, particularly Muslim ones or those working in the Middle East, to find banks cutting off their funding to ensure that they don’t inadvertently break the many layers of anti-terrorism legislation.
Not all of the concerns have been unjustified – a handful of smaller NGOs have faced allegations of unintentionally aiding terrorism. Yet much legitimate work has been abandoned or suspended as NGOs get caught between the government and the banks.
Worse still, NGOs often feel no one takes responsibility for the decisions. The banks blame the government for anti-terrorism legislation that they say makes it too expensive and dangerous to keep the NGOs as clients, while the government claims banks are making purely financial decisions that don’t concern them.
The solution is better communication between these three groups. Everyone agrees it is necessary, but progress towards it has been painstakingly slow.
New strategy needed
What is unique in ODI’s report is not the findings, but the strategy for achieving the solution. The report calls for a "permanent cross-government committee or mechanism" to manage the relationship between the three, to avoid knee-jerk reactions and bank accounts being closed unnecessarily.
Sara Pantuliano, Director of the Humanitarian Policy Group at ODI, said that currently all sides of the conversation are too dogmatic in the pursuit of their goals:
“The government wants to stop diversion of aid, the banks want to derisk as much as possible… and the NGOs sometimes put cause ahead of institutional frameworks, especially some of the younger charities,” she said. “So each party needs to look at what they can do better.”
She said the governmental working group would help “NGOs work together with government and banks to come up with some kind of framework to avoid [bank accounts being frozen.”
“A mechanism of this kind allows each of them to lay out what their concerns are, and to reach agreements so that the measures that are important to prevent abuse of British aid don’t ultimately undermine that life-saving support.”
Tom Keatinge, an independent financial researcher, pointed to a similar action group on remittances as inspiration for the committee.
“You would bring together DFID [the Department for International Development], the Home Office, the Charity Commission, and representation from British Banking Association and the Treasury. They would be tasked with reviewing the problems and trying to come up with a working model that gives banks confidence that they will not be prosecuted for unwittingly supporting NGOs whose goods fall into the hands of terrorists.”
Some government departments, he said, have tried to “wish” the issue away. The committee would help to make “different parts of the government feel responsible” for solving the problem, he added.
A popular strategy
The idea seems popular with the NGOs and the banks. Abdurahman Sharif, Executive Director at the Muslim Charities Forum, is strongly in favour. Muslim charities have complained of feeling stigmatised, with a number of Muslim NGOs having their bank accounts closed without any warning.
“I think [the parliamentary group] is absolutely needed. Every time you try to engage on these issues you are going around in circles, dealing with different government departments,” Sharif said. “You need one place where issues are discussed with all those involved.”
He said that unless the British government took more steps to regulate the situation, Muslim charities would feel stigmatised and potentially take greater risks - including carrying out the kinds of small-scale aid convoys to the Middle East that have been prone to manipulation in recent years.
“Banks are closing accounts and communities are feeling frustrated and that creates more radicalisation,” he said.
The British Banking Association is also on record as supporting new formal channels between banks, NGOs and the government.
“The banks and charities have come to the table and we are trying to find solutions, but in essence we are responding to the concerns raised by government and regulators so they also need to be at the table to agree this,” Justine Walker, Director of the Financial Crime department at the BBA, told IRIN in December.
This seemingly reasonable and popular mechanism has been proposed to keep British aid flowing while seeking to placate the government’s worries about terrorism. The question, then, is whether the government is listening.
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