In anticipation of the Financial Action Task Force’s (FATF) evaluation of U.S. implementation of its anti-money laundering and terrorist financing (AML/TF) standards, the U.S. Department of Treasury published the first National Terrorist Financing Risk Assessment on June 12, 2015.
One year after President Obama’s speech at the United Nations on the need to protect civil society globally the White House released two documents that set out an ambitious agenda to strengthen civil society. First, a Presidential Memorandum directed federal agencies that conduct international work to take proactive steps in four concrete areas, and to report back on their progress annually. The second document, a Fact Sheet announced a new project to create Regional Civil Society Centers around the world and new actions as part of the administration’s Stand with Civil Society Agenda. These include a commitment to consult with civil society on revision of the Financial Action Task Force’s update of guidance on anti-terrorist financing regulations for nonprofits. The documents do not address issues of U.S. restrictions on civil society but potentially open the door to make progress on undue counterterrorism restrictions imposed on U.S. nonprofits. This summary provides details on the new commitments, provides commentary and highlights areas that could be most helpful in addressing counterterrorism restrictions.
The Palestinian territories receive some of the highest amount of humanitarian aid of any place in the world from the U.S. government and charitable donors.[i] Most of this aid goes to the West Bank. The flow of aid dollars hits a significant barrier when it comes to the other Palestinian territory, the Gaza Strip. The elected government in Gaza, Hamas, was listed as a terrorist group by the U.S.
The Financial Action Task Force (FATF) is an intergovernmental policy making body that sets counter-terrorist financing and anti-money laundering (CFT/AML) standards used in nearly 180 countries. Jurisdictions undergoing the FATF’s compliance evaluation process are strongly encouraged to introduce specific laws and financial regulations, including Recommendation 8 (R8), on the operations and activities of non-profit organizations (NPOs), or risk serious economic consequences that could affect foreign aid, remittances, and trade.
Terrorism has been on the modern international agenda since 1934, when the League of Nations discussed a draft convention for the prevention and punishment of terrorism. More recently, the United Nations (UN) has introduced a number of robust sanctions and anti-terror programs. These initiatives make up the bulwark of the UN’s efforts, but many were created with little transparency and are routinely criticized for violating fundamental norms of due process and insufficiently respecting human rights. Other tools, like the UN Global Counter-Terrorism Strategy, call on all UN members to undertake measures against terrorism, but to do so “in accordance with the Charter of the UN and the relevant provisions of international law, including international standards of human rights.”
Representatives of the U.S. nonprofit sector have been seeking release of frozen charitable funds for charitable purposes since 2006 when 20 organizations sent a letter to the Department of Treasury asking for release of the funds for charitable purposes. Specific procedures based on current Treasury regulations were proposed. However, Treasury rejected the request, and continues to resist releasing the funds, based on a claim that Congress intended the funds to be held in case victims of terrorism file suit against the shut down charities. Since that has only happened in one case, the rest of the funds remain frozen indefinitely. The Charity and Security Network undertook research of the Congressional Record and the law and found no evidence to support Treasury's position. This memo describes the outcome of that research in detail.
The process used by the United States government to “designate,” or list, charitable organizations as supporters of terrorism is controversial, and three federal courts have found key elements of these procedures to be constitutionally deficient.[i] In addition, the U.S. has not implemented due process reforms consistent with the December 2009 United Nations (UN) Resolution 1904, which it supported.
The Charity and Security Network has developed model rules to protect the due process rights of U.S. charities to remedy the constitutional problems, make U.S. practice consistent with international standards and protect the assets of charities for the beneficiaries in need. These model rules can be found here.
Laws that prohibit "material support" to listed terrorist organizations only exempt religious materials and medicine. That means medical services or non-medicinal necessities such as clean water are prohibited, as are tents, blankets, food and more. In other words, it is legal to give someone a pill, but illegal to provide clean water for swallowing it. There is no justification for this ongoing blockade of humanitarian aid.
On June 21, 2010, a divided U.S. Supreme Court upheld a federal statute that bans support to designated terrorist organizations, even when defined to include conflict mediation, human rights training and peace-building efforts aimed at turning terrorist groups away from violence. That same day the Charity and Security Network (CSN) and the Constitution Project (CP) held a press conference to comment on the ruling. An audio file of the entire teleconference, including reactions to the decision and a question and answer period from national media, is available here.
The unfolding crisis in Somalia illustrates a common dilemma U.S. nonprofits face when trying to conduct humanitarian operations in territory controlled by entities listed as a Specially Designated Global Terrorists (SDGT). The humanitarian imperative to provide urgently needed food to nearly two million people in an area controlled by al-Shabaab, a listed SDGT, conflicts with the “strict liability” standard against supporting terrorists that even has State Department employees fearing sanctions by the Treasury Department. Now the U.S. government's response to the famine in Somalia is forcing it to confront the same onerous hurdles current national security laws create for nonprofits.