During a particularly brutal stage of Syria’s civil war, one of Europe’s leading aid organisations tried to deliver humanitarian assistance to the country’s civilian population. The plan involved transferring funds to a neighbouring jurisdiction before dispersing the money across the border through informal ‘hawala’ (transfer) networks, due to a lack of formal banking channels. The agency, which had a long-term relationship with a global bank, discussed its intentions with the lender. But the plan was blocked for falling well beyond the bank’s risk appetite, in part because the aid organisation could not guarantee that the funds would not be diverted on route.
This incident, detailed in a leaked and widely circulated UN document on the humanitarian impact of unilateral restrictive measures placed on Syria, is one of many cases where aid organisations and charities have been unable to effectively provide relief due to banking-related restrictions. The ongoing civil conflict, the sanctioning of Syria’s largest banks and the presence of terrorist organisations on the ground have cumulatively elevated the country’s risk profile to an extent in which correspondent banking exposure has been withdrawn.
