12 March 2024

Banks should be alert to NGOs carrying out activities in vulnerable areas

Birgit Snijder-KuipersKees Groffen

On 6 March 2024, Pro Bono Connect, a clearing house for pro bono matters and one of our pro bono partners, held a special "Money Matters" meeting for NGOs as these organisations often encounter difficulties when opening bank accounts and face certain bank payment issues. The meeting focused on NGOs which provide assistance to those in need, including in high-risk areas and conflict zones. De Brauw participated in the meeting by providing an overview of anti-money laundering (AML) and sanctions regulations, and discussing some issues relating to the opening of a new bank account and flow of funds. Good governance of NGOs was also addressed.

When payments are made or received from high-risk jurisdictions, banks often ask specific questions as they must comply with AML legislation and sanctions regulations. In addition, there is also the risk of directly or indirectly covering for or supporting terrorist activities.

Responsibility of NGOs

To avoid money laundering and terrorist financing (ML/TF), it is important that NGOs be in close contact with the local individuals and organisations they are working with. NGOs as such are not AML-regulated institutions but they should avoid ML/TF risks, for social responsibility and reputational reasons. Supporting ML/TF may even lead to criminal liability on the part of the NGO or its board members.


It is important for NGOs to have open and clear communication about actual and anticipated flows of funds between them and banks (or other AML-regulated institutions, such as auditors). Having a multi-year plan for the organisation's goals and the steps that it will take to achieve those goals, is also relevant.


It is advisable for NGOs to monitor their activities, donors and subsidy providers on an ongoing basis, including by (i) screening local individuals or organisations; (ii) identifying ultimate beneficial owners (UBOs); and (iii) performing sanctions screening on all parties involved.

In addition, we also recommend that NGOs set up clear policies and procedures that contain the terms on which they want to carry out their activities. They may also be able to follow the policies of a Dutch or international umbrella organisation. For example, the Dutch Banking Association (NVB) has issued guidelines for NGOs on how to interact with Dutch bank