International grantmaking and US Executive Order 13224
On September 23, 2001, Executive Order 13224 became law in the US. This order, which remains in effect today, aims to restrict funds going to a shortlist of individuals or organizations seen as supporting terrorism. While the order originally referred to a list of ~30 groups, it has grown to a list of over 5000.
The order prohibits any US group from providing financial or in-kind support to groups on that list, and to the larger "Specially Designated Nationals List (SDN)" maintained by the US Department of the Treasury. Unlike previous restrictions on giving aid to terrorist groups, this order makes no distinction between knowing of such a connection or intending to give such support, and know having such knowledge or intent. Also unlike previous restrictions, it makes no exemption for humanitarian aid.
Violating the order can result in assets of the aid-giver being frozen, and possibly also civil or criminal prosecution. As a result, this can impose a significant burden on any US-based donors or organizations that support projects overseas, particularly those that transfer resources through intermediaries of any kind.
According to the US charity group PGDC,
- "It appears the Executive Branch believes the Executive Order extends to re-granting by charitable grantees".
- "The government does not have to provide any pre-freeze notice or opportunity to respond to the freeze, nor is there any requirement of prior notice of a determination of terrorist status."
Impact on international charities
The Treasury Department has issued Voluntary Guidelines for international grantmakers aimed at addressing the goals of this executive order. However, these guidelines are optional, and explicitly do not provide a safe harbor for charities that follow them. Some US charities take issue with these guidelines as being 'overly invasive, impossible to follow, and not indicative of best practices for charities'. They developed their own set of recommended practices: the Principles of International Charity.
As of 2011, these are summaries of the issues at play:
- The Council on Foundations published an overview of what anti-terrorism policies mean for international grantmaking.
- The PGDC published a monograph on "Implications of EO 13224".
Suggestions for reform
Like the Patriot Act, this executive order was not targeted at international charities; but has a significant impact on their work. It is seen as being vague, difficult and humiliating for charity recipients to comply with, and lacking proportionality (penalties are unrelated to the amount of aid given).
A number of charitable groups have called for reform of EO 13224, notably to remove the restrictions on humanitarian aid, to define how groups end up on the related blacklists, and to clarify the vague scope of the order.
"Specially Designated Nationals"
The US Treasury Department's Office of Foreign Assets Control (OFAC) has made available a web-queryable interface to its "Specially Designated Nationals" database, where US organizations and individuals can look up individuals and groups, based on whatever information is available (the interface is very flexible, and can even list all "specially-designated" entities within a country, without a specific search string), to ascertain whether they would be prevented from collaborating, and specifically from exchanging funds, with those entities, under this executive order.
- Implications of the Anti-Terrorist Financing Rules for U.S. Charities: Compliance with Executive Order 13224
- "What anti-terrorism actions and policies of the U.S. Government relate to international grantmaking?"
- Implications of EO 13224, section "U.S. Department of the Treasury Anti-Terrorist Financing Guidelines"
- For example, see "Time to Update EO 13224" from the Charity and Security Network.