Charities in Syria are struggling to deliver aid despite western countries extending sanctions exemptions in the humanitarian sector that were put in place after an earthquake hit Turkey and Syria in February.
Funding still takes months to arrive in Syria or does not arrive at all, said Roy Moussalli, who directs a Syrian NGO that operates in government-controlled areas and receives funding from European and US NGOs.
His faith-based NGO, St Ephrem Patriarchal Development Committee, waited two months after the earthquake that killed more than 50,000 people for a $50,000 transfer.
The funds were used to buy food and toiletries for earthquake survivors in Lattakia, Aleppo, Hama and Idlib regions.
A transfer of €80,000 ($90,000) was also delayed. Six months after the earthquake, a separate $200,000 transfer has yet to arrive.
“Clothes, blankets, towels, soap, dignity [hygiene] kits for women were all delayed because of banking over-compliance,” Mr Moussalli told The National.
The main issue at stake is de-risking, a banking practice which involves restricting or ending relations with customers to avoid rather than cope with compliance risk.
The humanitarian sector is not subject to sanctions, but it is generally accepted that de-risking practices slow down or block the flow of funds.
Banks expressed reservations at each step of the transfer meant for Mr Moussalli's NGO, from the issuing bank and intermediary banks, usually located in the US or Europe, to the receiving bank in Syria.
“Banks say they don’t want to go take a big risk for a small commission,” he said.
Mr Moussalli’s struggles with the banking sector are a typical problem for NGOs in Syria.
“Basically, banks refuse to do transfers when they see the word Syria,” said a Damascus-based European NGO worker.
There is renewed scrutiny on the six-month humanitarian facilitations issued by the EU and the US after the earthquake as they reach their expiry date.
The February 6 earthquake and its aftershocks killed more than 50,000 people, including more than 7,000 people in Syria.
The earthquake made Syria’s humanitarian situation after 12 years of civil war worse. The number of Syrians in need of humanitarian aid reached 70 per cent of the population this year, a record.
“After a decade of conflict in Syria, a devastating earthquake, and a deteriorating economy, we are concerned of the negative impact of sanctions on Syrians and the general humanitarian situation on the ground,” said Jessica Moussan, regional media relations adviser to the International Committee of the Red Cross (ICRC).
Syrians who died in the earthquake mostly lived in the non-government-controlled area in the north-west, which faced difficulties with aid shipments through its border with Turkey.
Aid sent to north-west Syria falls within the framework of a UN Security Council resolution which is currently on standby after a Russian veto and a push by Damascus to impose its own conditions.
Aid sent to government-controlled areas, which covers roughly 70 per cent of the country, must navigate a complex and sensitive web of overlapping sanctions.
For this reason, many sources The National spoke to requested anonymity.
In the case of the EU, the six-month exemption issued in February was renewed for another six months on Friday.
A similar US general licence is scheduled to expire on August 8. It remains unclear whether the US Treasury will opt for an extension or not, and if it does, how long it would last.
The UK’s post-earthquake six-month general licence was extended in July until February 2024.
Switzerland is the only country that issued an open-ended exemption.
NGOs said they welcome the EU's six-month extension but believe that open-ended exemptions are necessary.
Sanctions slow down their work, drive up their costs, and in the long run are detrimental to the people meant to receive humanitarian aid, they say.
This places some of them in the near-impossible situation of delivering on many EU-funded humanitarian projects while worrying about EU red tape.
“We welcome the EU decision to renew the exemptions, as it means that our call was heard,” said the director of the Syria office of an international NGO.
“But unfortunately, the reasons why we were asking for this renewal do not seem to be understood. The exemptions are useful, but their main issue is that they are time limited.”
An internal survey conducted in May by 33 Damascus-based international NGOs found that 15 per cent of respondents noticed an improvement in financial transfers from their headquarters to their Syria offices which either had not been possible before, or too slow.
The Norwegian Refugee Council was among those that noticed an improvement after it was able to receive funds in euros for the first time in years.
Yet it is widely considered that a six-month exemption is not long enough to persuade banks to change their de-risking practices.
“Banks are hesitant to change their banking operations when they know that permissions could expire imminently,” said Delaney Simon, senior analyst for the US programme at the International Crisis Group.
Ms Simon said that while the banking sector is especially concerned about US sanctions, “a key constraint for banks is navigating the many overlapping sanctions regimes in effect.”
Ms Simon added that six months is too short a time period to conduct an adequate earthquake response.
Difficult phone calls
The US, EU and other states have imposed different Syria-related sanctions as well as associated licences and exemptions.
Complying with the different sanctions regimes diverts money away from aid to human resources as NGOs find themselves obliged to allocate more time and money towards administration.
The NRC now has a full-time member at its headquarters who works on bank transfers.
In practice, the EU exemption waives the need for NGOs to seek permission before transferring funds to a project which might benefit sanctioned entities in Syria.
Some NGOs have said that their logistical work has become easier in the past six months.
They no longer need to ask for a derogation from a so-called “national competent authority” in one of the EU’s 27 countries for certain activities.
These authorities include foreign affairs, economy or finance ministries. Derogations can take months to obtain.
This means that it has become less difficult for NGOs to pay their phone bills to Syriatel, one of two telecom operators in Syria which is sanctioned by the EU but also has the best coverage in the country.
It also means they can more easily book flights inside Syria with sanctioned airlines like Cham Wings, or buy fuel from the state fuel company SadCop, which has a monopoly over petroleum distribution.
NGOs already operate in a complex environment that involves many zones of control and attempts by the Syrian government to co-opt aid, Human Rights Watch said.
Having to worry about whether they can make phone calls to staff in far-flung places like Deir Ezzor compounds these difficulties.
“How are they supposed to do their work if the only way they can contact their staff is through a sanctioned communication channel?” said Ms Simon.
Most European countries say they are receptive to NGOs complaints and are open to grant them a one-year exemption.
But there is also hesitation at easing sanctions to avoid awarding what is perceived as a diplomatic win to Syria’s President Bashar Al Assad.
He has said that sanctions are the reason for his country’s economic woes, which include high inflation and a currency plunge.
Western diplomats said that the suffering of the Syrian people was caused by Mr Al Assad’s refusal to engage in a peaceful transition of power after 12 years of civil war.
They say that the main reason for the country’s economic collapse is the war, widespread corruption and war crimes – mostly committed by Mr Al Assad’s forces.
One country has refused to allow an exemption for the humanitarian sector that is longer than six months. The National’s sources all said that that country is France.
The French Foreign Affairs Ministry did not answer a request for comment.
EU Council decisions on sanctions must be taken unanimously – hence the decision last week to only grant a six-month extension to the exemption.
Kelly Petillo, programme manager for the Mena programme at the European Council on Foreign Relations think tank, described Paris’ attitude as “very rigid”.
France “considers even post-earthquakes exemptions, which were mainly driven by humanitarian needs, as concessions,” said Ms Petillo.
France also maintains that European sanctions do not actually prevent humanitarian access – despite all the sources The National spoke to saying that they do, indirectly, due to their impact on the banking sector.
“More broadly, [France] rejects the notion that Syrians inside the country are those who are hurt the most by international sanctions, dismissing this as a regime and Russia narrative,” said Ms Petillo.
Another fear is reportedly that a humanitarian exemption would encourage sanctions circumvention. But so far, sources all said that no link has been made.
Behind closed doors, anonymous reports about circumvention are put forward, NGO workers said. Yet they have not been borne out by facts.
“We don’t hear any signal or information that our exemptions have been used to circumvent EU sanctions on Syria,” a senior EU official told Brussels-based reporters on Tuesday.
What banks say
European banks contacted by The National said that they conduct thorough checks but do not hinder legal transfers to Syria.
Brussels-based KBC’s embargo policy specifies that it only processes payments for existing clients as long as they are not in US dollar, British pounds or Canadian dollars and “after a thorough screening of the transaction details to make sure the transaction is legally allowed within the limits of our own policy.”
Banca Etica, a co-operative bank that operates in Italy and Spain, said that only payments that are linked to natural persons or organisations identified as criminals are blocked and that the bank checks the nature of NGO projects on the ground.
France’s Societe Generale had not answered a request for comment by the time this article was published.
All eyes are now on the US Treasury as it prepares to take a decision on whether it will extend or not its general licence that was issued after the earthquake.
The general licence played a positive role in encouraging banks in making transfers to Syria, said Ashleigh Subramanian-Montgomery, associate director of policy and advocacy for the Washington-based Charity and Security Network.
NGOs said they do not want to take a position on the sanctions themselves and the controversies that surround them. What they want is to deliver humanitarian aid.
“We have seen the negative impacts on humanitarian aid delivery and the negative consequences on the general civilian population,” Andres Gonzalez, Syria director for the Norwegian Refugee Council, told The National.
“These need to be considered by governments.”