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EXCLUSIVE: Syrians suffer as anti-terror laws squeeze charities - survey

by Tom Esslemont | Thomson Reuters Foundation
Wednesday, 24 February 2016 00:01 GMT

Residents, with their belongings, return to their villages on a pickup truck after Kurdish People's Protection Units (YPG) fighters said that they retook control of the area from Islamic State in the southern countryside of Ras al-Ain May 13, 2015. REUTERS/Rodi Said

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LONDON, Feb 24 (Thomson Reuters Foundation) - Western anti-terror laws are forcing aid agencies in Syria to avoid communities controlled by extremist groups, making it harder to deliver vital supplies and leaving people vulnerable to radicalisation, a Thomson Reuters Foundation investigation found.

A survey of 21 international and national non-governmental organisations (NGOs) found government donors and banks were also demanding more in-depth audits in the two years since jihadi group Islamic State (ISIS) took root, sending costs spiralling.

Successive terror attacks in the United States and Europe have put governments under pressure to enact laws and impose controls to track the financing of extremist groups, including through SWIFT, the most widely used platform for bank transactions.

While acknowledging the need for tougher laws, NGOs surveyed said operating in jihadi-run areas in Syria made them vulnerable to being blacklisted in the United States and European Union countries where the groups are branded "terrorists".

One international NGO which responded to the confidential survey said it had had to move some of its assistance programmes to other areas in Syria "because of difficulties dealing with armed groups and fears of running afoul of anti-terrorism laws".

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The NGO's country director for Syria said demands for additional compliance were also hampering its activities in the areas most affected by conflict.

"Anti-terrorism legislation and licensing requirements reduce our nimbleness and slow down our effectiveness in reaching vulnerable people because of onerous reporting," the country director said.

The Syrian NGO Alliance (SNA), a consortium of 19 NGOs working in the country, said its members were having to think twice about setting up projects in ISIS areas because they could not keep up with the paperwork required by banking regulations.

"This is really bad for Syrian people, who end up being more vulnerable to joining the terrorist groups because they do not get the humanitarian assistance," said SNA coordinator Fadi Hakim.

"The other option for many of them is to then join the exodus of Syrian refugees."

The Thomson Reuters Foundation was unable to calculate how many civilians were affected by aid agencies' decision to steer clear of certain areas in Syria.

But the survey data revealed that the bureaucratic workload had risen by an average of 7,000 extra man hours per charity in the two years since ISIS had taken root, the equivalent of three full-time staff.

Seven NGOs, whose Syria aid budgets ranged from $500,000 to $75 million, reported that additional audit costs had risen substantially to a total of $7.5 million. One charity said the cost of compliance reporting had doubled since March 2014.


Affected charities said action taken by banks and money transfer companies in Britain, the United States and Turkey was excessively "risk averse", and time and money diverted to compliance work would be better spent on getting food, water and medicines into Syria.

After the Sept 11, 2001 attacks on New York and Washington, the U.S. government moved quickly to target the finance networks that allowed militant groups to funnel money around the world to fund their operations.

Congress enacted the USA PATRIOT Act of 2001 to stifle these clandestine money flows.

This affected financial flows to agencies in some places where conflicts were rife with militant activity, including Somalia after regulators around the world tightened procedures to stop funds reaching al Shabaab Islamists.

"Banking problems are only increasing for humanitarian agencies, with millions of dollars of donations to charities working in war zones being blocked with no detailed explanation," said Sara Pantuliano, humanitarian director at the Overseas Development Institute, a British think tank.

"The interconnected international banking system means no major financial body is immune from U.S. anti-terror laws."

The United States provides an exemption for humanitarian aid to flow to sanctioned countries. It clarified in November 2014 that banks and money agents can do business in high-risk environments if they have proper controls in place.

But a quarter of survey respondents said at least one bank had frozen their account, while three quarters said payments had been delayed or blocked in the five years since the Syrian war began.

One NGO said British-based bank HSBC had closed its account. Another said its account had been frozen by Turkish Garanti Bank.

NGOs said these banks did not give an official reason for the closures, but said it was implicit they were to do with their work in Syria and concern about anti-terror laws.

HSBC said it was working with the British government and industry bodies to help charity customers manage risk in their operations.

"Although we can't always be specific about why we decide to close an account, a decision of this kind is never taken lightly and is never due to the customer's race or religion," an HSBC spokesman said.

Garanti Bank said it "does not intermediate any transactions which may be against international sanctions" such as those imposed by the United States, the European Union and the United Nations.

"Banks are most concerned about adhering to U.S. legislation, which criminalises any material support for illegal militant groups," said Pantuliano.

Pantuliano also said aid convoys heading to Syria might be used by potential fighters posing as aid workers, even if this risk had been overplayed by banks.

Britain's charity watchdog said earlier this month it had reopened an investigation into how a British man convicted of helping a teenager travel to Syria to fight with ISIS diverted charitable funds he raised through social media.


All 21 NGOs responding to the Thomson Reuters Foundation survey operate their northern Syria programmes from Turkey, where tens of thousands of people have recently sought sanctuary from an intensifying offensive by Russian and Syrian government forces.

Moving money into Syria is complicated. NGOs typically withdraw cash from Turkish banks and transfer it across the border using hawala, an informal trading system based on trust and personal ties.

Charities said Syrian drivers, doctors, trainers and logistical staff often require salaries to be paid through money transfer systems, such as Western Union, in Turkey.

But three of the NGOs surveyed said Western Union had delayed or blocked payments when they had tried to wire cash to staff living close to the Syrian border.

Western Union is "unable to share details relating to a specific country", a company spokeswoman said in a statement. It maintains "very strict controls to prevent the abuse of services, particularly in designated high-risk areas," she said.

Mohammed, a Syrian who works for a European charity, said his attempts to withdraw his salary from branches of Western Union on the Turkish side of the Syrian border were met with a shrug from a clerk.

"She never gives an explanation, but when I tell her I am Syrian she simply says there's no money or that the system is down," the 33-year-old said in a phone interview.

Mohammed, whose name has been changed to protect his identity, said the money transfer company had repeatedly blocked salary payments to him and other Syrians.

Western Union said it did not withold money on the grounds of nationality.

Mohammed, who fled Syria in April 2011, said the banking delays had affected his elderly parents in Damascus who depended on remittances.

Fadi Hakim of the Syrian NGO Alliance said there was little the aid agencies could do to change the system.

"The regulations are not ours to change. They are out of our hands, so in the end you just deal with things the way they are," he said. (Reporting By Tom Esslemont, editing by Tim Pearce and Alex Whiting. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, corruption and climate change. Visit news.trust.org)

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