Safeguarding Humanitarian Action: The United States’ Critical Role in Renewing UN Security Council Resolution 2664

Financial Access Impediments to Humanitarian Activities and the Adoption of Resolution 2664

Over 305 million people are suffering from famine, natural disasters, and conflict across the world, resulting in an urgent and unprecedented need for humanitarian assistance. The effective delivery of aid to people suffering in territories controlled by terrorist groups and sanctioned governments has been hindered by financial institutions’ (FIs) de-risking practice that impedes the provision of financial services to humanitarian organizations and the transfer of funds for critical life-saving aid. Over numerous years, these financial access barriers to delivering humanitarian assistance have exacerbated humanitarian crises and challenged the operators working to provide adequate aid.

Nonprofit organizations (NPOs) and humanitarian actors operating in these settings require funds to deliver and distribute aid. The Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) regulatory framework under the Bank Secrecy Act, the significant increase in the use of economic sanctions, and a growing risk aversion facilitating transactions to high-risk jurisdictions have resulted in unintended consequences, increasing levels of de-risking since 2015 and adverse impacts to humanitarian activities.

In response, the United States partnered with Ireland and other states at the UN Security Council (UNSC) to adopt Resolution 2664 in December 2022 to address the barriers NGOs faced from UN asset freezes. It created a standing humanitarian carve-out to all UN sanctions, allowing humanitarian organizations to provide humanitarian assistance in these jurisdictions, but limited the exemption for the 1267 ISIL/Al-Qaida regime to two years, which ends on December 10, 2024. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) swiftly amended its general licenses (GLs) and authorized humanitarian transactions across U.S. sanction programs, making the United States the first UN member state to modernize its regulatory framework in a manner consistent with the resolution and better facilitate the delivery of humanitarian assistance.

This pivotal, historic moment in UN and U.S. policy provided the necessary authorizations for FIs to successfully send payments to and on behalf of NPOs operating in high-risk territories and jurisdictions without running afoul of U.S. or UN sanctions. As a direct result, financial access barriers have decreased. Qualitative and quantitative data have shown a decrease in financial barriers that have hindered humanitarian activities, therefore allowing critical aid to be delivered to those in need. Resolution 2664 has provided clarity and protection to willing FIs that send transactions to high-risk territories and jurisdictions. The resolution has become a tool for FIs and NPOs to build a foundation that ensures that the provision of financial services to humanitarian organizations is consistent with UN and U.S. regulatory frameworks; as seen in its positive impact in jurisdictions where sanctions regimes apply.

Yet the progress on the UN humanitarian carve-out has a potential expiration date if UNSC members do not take swift action to extend the resolution. On December 9, 2024, the UNSC will consider the renewal of Resolution 2664 and the carve-out for the 1267 ISIL/Al-Qaida regime. The United States should support the indefinite extension of the Resolution’s 1267 carve-out based on the evidence of its effectiveness, its obligation to uphold international humanitarian law in supporting the delivery of humanitarian assistance, and to support NPOs, including its implementing partner NPOs, operating in high-risk areas. Failing to renew the resolution and extend the 1267 carve-out would be a step backward after two years of improved financial access for humanitarian activities. Importantly, it would put the humanitarian sector at risk of slowing the delivery of lifesaving aid due to delayed transactions needed to reach vulnerable people in crisis.

Progress and Implementation of How Resolution 2664 Improved Aid Delivery

The landmark humanitarian carve-out across U.S. sanctions has helped NPOs maneuver complex U.S. and UN regulatory requirements, ensure they can provide principled humanitarian action amidst evolving geopolitical contexts, and deliver vital assistance to vulnerable people. U.S. humanitarian assistance funds, especially for the most severe emergencies, affirm the United States’ commitment to overcoming challenges in emergency settings and facilitating humanitarian activities. It also provides a powerful counterpoint to those who might claim that humanitarian action should be limited based on counterterrorism objectives by demonstrating that humanitarian aid can and should be delivered in areas in which the United States is pursuing both objectives.

OFAC has taken a step beyond implementing the resolution by providing supplementary guidance on the amended GLs. It has released FAQs and factsheets to clarify the implementation of the GLs that promote FIs’ and NPOs’ adherence to both Resolution 2664 and GLs. This demonstrates the U.S. support for partners to utilize the resolution, and OFAC has engaged publicly in a wide array of forums to ensure that FIs and NPOs understand the full scope and extent of the authorizations. For example, one NPO reported that a bank withheld its payments to fund humanitarian activities in Yemen, and in response, representatives of the NPO met with the bank’s compliance chief to present Resolution 2664 and the GLs’ humanitarian carve-out. The meeting was successful, and the payment was approved to be sent to the NPO. Significantly, OFAC also has taken a holistic approach to understanding what dependencies may exist within a humanitarian context, such as in Yemen, and has issued accompanying additional licenses in areas complementary to humanitarian efforts, such as for private sector shippers using a port to provide goods useful for humanitarian purposes. These interventions underscore how Resolution 2664 and the GLs foster FI-NPO and private-sector cooperation to open financial channels for humanitarian assistance.

NPOs have documented tangible results in delivering aid as a result of the carve-out. The Norwegian Refugee Council (NRC), for example, reported an immediate shift in some FI’s behavior post-adoption of the resolution, documenting a 40 percent decrease in de-risking by banks within the first nine months from the agreement of the resolution. The NRC is one of many NPOs that have been diligent in reporting on the resolution and has publicly recognized that its implementation has allowed them to continue lifesaving operations in some of the hardest-to-reach places. The resolution and amended GLs for FIs have enabled the rapid delivery of aid and have provided predictability that is useful for planning humanitarian operations. FIs’ swift approval of transactions for food, water, shelter, and medical supplies in territories with sanctioned entities in close partnerships with NPOs has proved to be beneficial. The UNSC should renew the resolution to ensure that FIs and NPOs are able to continue this work.

The Persistent Challenge of Risk Aversion and Geopolitics

Challenges remain for FIs in scaling up payments to NPOs in high-risk jurisdictions. FIs face significant risks if they fail to adequately manage compliance in these complex environments, including potential regulatory fines, enhanced examiner scrutiny, and investigations by law enforcement agencies. These risks can result in substantial monetary penalties, reputational damage, and even temporary suspension of banking licenses. Yet the demand for these payments remains high, and delivery of critical funds for assistance remains largely unmet. Afghanistan’s humanitarian response plan is 44 percent funded, Yemen’s is 47 percent funded, the Sudan regional response plan is 26 percent funded, and the Occupied Palestine Territories flash appeal is 69 percent funded. While these funds are dependent on the United States’ and other donor countries’ financial commitment to humanitarian assistance and response plans, FIs are also responsible for ensuring that the funds they are accountable for are sent in a timely manner.

Transactions to these countries can incur increased costs due to additional compliance and risk management expenses, as well as potential reputational risks for FIs and the United States. FIs are not always familiar with ongoing humanitarian crises, unable to predict the onset of an emergency, and are susceptible to mis- and disinformation on conflicts. These conditions cause FIs’ risk calculus to quickly shift and disincentivize them from conducting transactions to and partnering with NPOs in high-risk jurisdictions. For example, the intensifying conflict following the October 7 attacks in Israel launched a mass of mis- and disinformation campaigns, creating uncertainty among FIs’ that resulted in delayed transactions and liquidity challenges in Gaza. Though many FIs initiate payments after carefully vetting partners, additional barriers can delay payments, including those resulting from the disconnect between NPOs originating payments and the network of correspondent banks, essential to completing transactions that NPOs often have no access to.

In new and emerging high-risk contexts, FIs have a different risk and profitability calculus when sending and facilitating payments. The FIs that assume risk could face regulatory scrutiny, reputational risk, and lengthy examination periods when their payments are audited or reviewed by their regulators to determine if the transactions were used for their intended purposes. After devastating outbreaks of conflict, the NRC reported that there was a 300 percent increase in de-risking practices as of November 2023. This FI response is detrimental to people living in crisis conditions, and this reality can worsen if conflict, access barriers, and fear of scrutiny grow.

The United States has demonstrated continued leadership by championing the resolution, implementing it thoughtfully, and amending the GLs. The progress made to date provides evidence that the current framework should be extended indefinitely. The indefinite extension of the resolution would provide additional certainty and clarity to domestic regulatory agencies as they continue to work on reforms to elements of the AML/CFT framework that impede the provision of financial services to NPOs. These updated frameworks need to provide more robust guidance and incentives to FIs to ensure that in the face of increasing regulatory scrutiny, they have the flexibility to continue to provide needed financial services to NPOs operating in high-risk jurisdictions.

The Case for an Indefinite Extension

The UNSC vote on converting Resolution 2664 to an indefinite humanitarian exemption would be a true commitment to humanitarian assistance and would alleviate the suffering of people in crisis. If renewed, the U.S. government, FIs, NPOs, and the private sector could continue to address the legal and operational gaps needed for full, effective implementation. An indefinite exemption would allow the U.S. to explore additional, updated guidance for AML/CFT regulatory requirements while safeguarding humanitarian assistance. It would also continue to send a message to other nations that this should continue to be standard practice when issuing sanctions, to ensure that sanctions impact their intended targets, and do not have unintended consequences on victims of conflict and humanitarian crises. The United States championed the 2022 resolution and should continue to do so alongside other UNSC members.

Although some continue to raise concerns about the potential for goods and payments to be diverted to foreign terrorist organizations, there has yet to be evidence of the claim since the adoption of the resolution. An indefinite exemption will advance sectors’ evidence-based practices and continue required reporting to the UNSC. This will allow the UNSC to monitor and evaluate the resolution’s effectiveness, which is to the benefit of the United States and the promotion of its values through foreign policy.

The CSIS Humanitarian Agenda program established the Multi-Stakeholder Working Group (MSWG) on Financial Access for NPOs in 2021 to convene key stakeholders from various sectors that are dedicated to exploring practical solutions to promote financial access for NPOs. A report published in 2022 following the first phase of the MSWG Mitigating Financial Access Challenges: Proposals from the CSIS Multi-Stakeholder Working Group on Financial Access report provided recommendations for relevant sectors to combat financial access challenges. In 2023, the CSIS Humanitarian Agenda program began the second phase to drill down on some of the proposed issues in the first report and will release an updated report in 2025 that details new key impediments and practical solutions to build more effective financial access and relationships across all sectors.

Resolution 2664 is not a silver bullet that solves all issues impeding financial transactions in high-risk humanitarian settings. Yet, it remains an important step forward, and the United States should remain a key champion of this initiative and lead the charge for its permanent extension. The United States should vote for an indefinite exemption of the resolution’s 1267 carve-out, and other nations should follow suit.

Nicolas Jude Larnerd is the senior program manager for the Humanitarian Agenda at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Michelle Strucke is director of the Humanitarian Agenda and the Human Rights Initiative at CSIS.

This commentary was made possible through the generous support of the U.S. Agency for International Development (USAID). The contents of this commentary are the sole responsibility of CSIS and do not necessarily reflect the views of USAID or the U.S. government. The Humanitarian Agenda would like to thank Alex Parets for his advice and guidance.