WORKING WITH DG ECHO SANCTIONS | 2021 - 2027

SANCTION CLAUSES

In its financing agreements with the implementing partners, the Commission has to ensure that those partners receiving EU funding comply with EU restrictive measures by not providing EU funds to listed persons or entities. This obligation, rooted in the TFEU, is translated into standard contractual clause (‘sanction clause’) in agreements concluded by the Commission for the implementation of the EU budget.

For humanitarian aid, this sanction clause recognises the principle of the non-vetting, i.e. non-screening of final beneficiaries (people in need). The identification as an individual in need must be made by the humanitarian actors on the basis of the humanitarian principles. Once this identification has been made, no vetting of the final beneficiaries is required.

In the context of cooperation with NGO partners, a sanction clause is included in article 18 of the new Model Grant Agreement (MGA). It recalls the need to comply with sanctions regimes but also explains that in line with the humanitarian principles, humanitarian organisations must not vet persons in needs.

EU restrictive measures in humanitarian aid

The beneficiaries must ensure that the EU grant does not benefit any affiliated entities, associated partners, subcontractors or recipients of financial support to third parties that are subject to restrictive measures adopted under Article 29 of the Treaty on the European Union (TEU) or Article 215 of the Treaty on the Functioning of the EU (TFEU).

The need to ensure the respect for EU restrictive measures must not however impede the effective delivery of humanitarian assistance to persons in need in accordance with the humanitarian principles and international humanitarian law. Persons in need must, therefore not be vetted.

Example of such a clause in the context of cooperation with International Organisations can be found in the Financial and Administrative Framework Agreement (FAFA) concluded by the Commission with the United Nations family. In this case, the clause is included in the framework agreement concluded with the UN family and not in the individual action specific agreements.The 11th paragraph of the Preamble to the FAFA confirms that the respect for EU restrictive measures must not impede the effective delivery of humanitarian assistance to individuals in need in accordance with the humanitarian principles and relevant provisions of international humanitarian law. Article 6a of FAFA sets out measures intended to ensure that EU funds are not provided to entities, individuals or groups of individuals, which are subject to UN or EU sanctions. However, it does not prohibit or preclude the provision of humanitarian assistance using EU funding to persons who are in need, including where those persons have been designated under EU restrictive measures.

6a. Exclusion from funding

6a.1. The UN shall not provide funds to third parties, whether entities, individuals or group of individuals, included in the Consolidated United Nations Security Council Sanctions List (the "UN Sanctions List") at the time such third parties are selected.

6a.2. The UN shall cooperate with the Commission in assessing if the third parties, whether entities, individuals or group of individuals, selected by the UN to be recipients of funds in connection with the implementation of the respective contribution agreement, fall under the scope of EU restrictive measures. In the event that such recipients would fall under the scope of EU restrictive measures, the UN shall promptly inform the Commission.

6a.3. In such event, the UN and the Commission shall promptly consult each other with a view to jointly determining remedial measures in accordance with their respective applicable legal framework. Such measures may include, but shall not be limited to, the reallocation of the remaining EU contribution under this Agreement, net of any costs incurred by the UN for undertaking any procurement or award procedure (the “Corresponding Amount”).

6a.4. Where such remedial measures are not feasible, the Corresponding Amount shall not be charged to the action or, in the case of Multi-donor action, to the amount corresponding to the Commission's contribution to the action. This is without prejudice to the suspension or termination of the respective contribution agreement, together with the recovery of any unspent funds contributed by the Commission to the UN, after consultation by the Parties.

6a.5. This provision is without prejudice to the exceptions contained in the EU restrictive measures.

Furthermore, to be eligible to receive EU funding to implement humanitarian assistance, the humanitarian organisations need to prove that they have the necessary internal rules and procedures ensuring sound financial management. DG ECHO has developed aid diversion guidelines and an anti-fraud strategy that aim to ensure that assistance is delivered solely to final beneficiaries.