An international sanctions bill primarily focused on Russia contains language devoted to countering the financing of terrorism (CFT) and supporting remittances to Somalia as well as wire transfers by legitimate entities.
Countering America’s Adversaries Through Sanctions Act (HR 3364), signed into law by President Trump on August 2, incorporates two bills that passed in the U.S. House of Representatives in late December, in the final hours of the 114th Congress, HR 5594 (National Strategy for Combating Terrorist, Underground, and Other Illicit Financing Act) and HR 5607 (Enhancing Treasury’s Anti-Terror Tools Act), with some modifications, in Subtitle C of the bill.
Section 261 requires the president to develop a national strategy for combating the financing of terrorism and related forms of illicit finance. The strategy, due to Congress in one year, must evaluate existing efforts, set out goals and priorities, identify threats and propose changes. The strategy must also discuss ways to enhance partnerships between the private sector and the federal government to detect and prevent illicit finance, including efforts to facilitate compliance while maintaining the effectiveness of CFT laws. Charity & Security Network has maintained that laws and policies that eventually lead to de-risking of nonprofit organizations are not effective. Unfortunately, the bill also directs that the strategy discuss technology that can improve the effectiveness of efforts to stop terrorist financing, “including better integration of open-source data.” Charity & Security Network is concerned about the use of open-source data to root out possible terrorist financiers, as it has the potential to incorporate unreliable information and “false positives,” as is an ongoing problem with some private list-checking services such as World Check.
Section 271 directs the U.S. Treasury Department to carry out a study to address the potential of requiring banking regulators to establish a pilot program to provide technical assistance to depository institutions and credit unions that wish to provide account services to money services businesses serving individuals in Somalia. In addition, it must address whether such a pilot program could be “a model for improving the ability of [U.S.] persons to make legitimate funds transfers through transparent and easily monitored channels …” This language about legitimate funds transfers was added to last year’s bill as the result of lobbying efforts by the Charity & Security Network. A new provision in the final bill signed August 3 requires U.S. Treasury to “solicit and consider public input as appropriate in developing the study.”
Charity & Security Network will continue to update its members as opportunities for input on this study arise.