Humanitarian concerns are once again in the spotlight as a result of recent shifts in international sanctions practice and wider counterterrorism (CT) and anti-money laundering (AML) regulations.

The past decade has seen a return to broader sectoral sanctions in countries that include Iran, North Korea, Venezuela and Syria. Such measures have been associated in the past with negative consequences on the health and wellbeing for ordinary citizens, particularly when they are applied to a target’s finance or energy sectors, or when they lead to sharp economic decline and a drop in available capital. This, notwithstanding efforts carried out since the 1990s to minimise the negative humanitarian impacts of sanctions through making them more targeted, or smart (such as through asset freezes, travel bans and arms embargoes) as a response to the backlash to the humanitarian ramifications of former United Nations (UN) and United States (US) comprehensive sanctions (or embargoes) on countries like Iraq, the former Yugoslavia, Haiti and Cuba. 

Furthermore, the complex web of overlapping autonomous and multilateral measures that increasingly characterises the contemporary sanctions landscape operates without a centralised licensing mechanism or any formal, common monitoring system to evaluate their collective impact, effectiveness or unintended consequences. As such, licensing exemptions and exceptions on humanitarian grounds, or the provision of supplementary aid, may not always be not enough to ensure citizens’ basic access to healthcare and other essential goods or allow healthcare providers and humanitarian workers to carry out their work effectively. The situation is further exacerbated in areas already suffering from humanitarian crises, such as conflict zones. 

The ramping up of a number of hard-hitting US regimes with extraterritorial reach (secondary sanctions) as part of the Trump presidency’s ‘Maximum Pressure’ campaign have also complicated matters. The approach seeks to achieve political gain through civilian pain, based on an arguably naïve reading of sanctions, despite evidence that measures that cripple a country’s economy are almost overwhelmingly ineffective and counterproductive.  The situation has been further compounded through the enduring international dominance of the US dollar and the globalised nature of US regulatory frameworks. 

Some of the more significant unintended consequences of today’s compliance environment include:

• Increased bureaucratic hurdles and greater costs to public and private sector entities; 

• Financial sector over-compliance (or ‘de-risking’); 

• Rapid decline in the availability of correspondent banking channels; 

• Shrinking of the humanitarian space (including curtailed access by humanitarian actors to certain individuals or groups, such as members of designated terrorist organisations or officials working in sanctioned ministries); 

• Withdrawal of humanitarian organisations (the ‘chilling effect’) from a range of jurisdictions.  

The situation has become so serious that some countries or regions can now be considered ‘un-banked’, raising alarm bells among the likes of the World Bank, the International Monetary Fund (IMF), Financial Stability Board (FSB) and the Financial Action Task Force (FATF).  While deleterious impacts have already been widely documented with regards to the non-for-profit sector, understanding of the impacts on the private food, medicine and vaccine sectors is far less developed, especially in so far as their ability to use formal banking procedures to export vital goods to highly sanctioned jurisdictions – and as has been well-documented -- the COVID-19 pandemic now adds an additional layer of complication and risk to those seeking to deliver essential goods (as well as humanitarian support) to citizens in heavily sanctioned jurisdictions. 

The project 

Funded by the Swiss Network of International Studies (SNIS), a new project based at the Global Governance Centre, Graduate Institute for International and Development Studies, Geneva (IHEID) entitled ‘When Money Can’t Buy Food and Medicine: Banking Challenges in the International Trade of Vital Goods and their Humanitarian Impact in Sanctioned Jurisdictions’ was launched on 01 October 2020. 

The project uses a mixed-methods approach based on qualitative interviews with executives in food and medicine companies, international organisations and non-governmental organisations (NGOs) The large-scale interview campaign will be complemented with the circulation of an anonymised survey to industry and humanitarian practitioners.  Through research articles, a policy report and multi-media dissemination, this study will provide urgently needed policy contributions by identifying ways of better securing the continuation of food, medicine and vaccine delivery in contexts of humanitarian crises. The elaboration of policy recommendations will be steered through multi-stakeholder focus groups, involving leading humanitarian non-state actors, social scientists and international law specialists. Collaborating organisations include the United Nations, Norwegian Refugee Council, Human Security Collective, Universities of Geneva, Zurich, ETH, Oxford, Harvard and Lille, the Geneva Academy for International Humanitarian Law and Human Rights, the Geneva Centre for Humanitarian Studies, Bourse & Bazaar and RUSI.  

Aims & research questions 

The project is expected to provide the first large-scale body of qualitative research, complemented with quantitative analysis of major trends, to show how trade of vital goods with heavily sanctioned jurisdictions has changed in response to the phenomenon of de-risking. In doing so, it will shed light on some of the nuances involved in the kinds of bureaucratic, legal, banking and logistical hurdles they have encountered in this context and how they may have had to adapt under the new coronavirus pandemic.  It will combine perspectives from the social sciences and international legal scholarship on the ramifications of regulatory barriers encountered by these companies, particularly in North America, Europe and Asia.  Building on other multi-stakeholder fora, the research will be particularly instrumental in its ability to generate robust findings that go beyond anecdotal (and often highly politicised) evidence.