Anti-Terrorism Financing

The Financial Action Task Force (FATF) is an intergovernmental policy making body that sets anti-terrorist financing and anti-money laundering standards, including recommended regulations for the nonprofit sector, used by 180 countries. The FATF is a voluntary organization without any enforcement capability, and its recommendations do not constitute a binding international obligation. However, the FATF pressures countries to adopt its standards, including a sweeping range of criminal and financial laws and regulatory practices. In some countries these new rules are used to buttress repressive regimes and restrict the political and humanitarian space in which nonprofits operate.

The Financial Action Task Force (FATF), an international consortium of 36 countries that sets anti-terrorist financing and anti-money laundering standards used by 180 countries, approved revised recommendations on Feb. 15, 2012.  The new recommendations largely duplicate the problematic Special Recommendation VIII for the nonprofit sector, focusing instead on weapons of mass destruction, corruption and tax crimes. A report from the Transnational Institute and Statewatch, published the same month, notes that the regulatory measures FATF recommends for nonprofits can and are being used by repressive governments to suppress nonprofits.

A small number of Minneapolis-area Somali money transfer shops have reopened amid heightened scrutiny from banks, reports the Minnesota Star Tribune on Jan. 25, 2012. Though the amount transferable is limited to $500, the services are the only means many Somali-Americans have available to send remittances to family living in Somalia, a country lacking a functioning government or banking system, and plagued by drought and civil strife for almost 20 years. The inability of nearly 70,000 Somalis that live in the state to send money home had drawn strong criticism from Sen. Al Franken (D-MN) and other Minnesota legislators. At the end of December, the state's 14 Somali money transfer shops were shut down after the last Minnesota bank to wire money to Somalia closed their accounts.

On Feb.13, the U.S. Court of Appeals for the District of Columbia upheld a lower court decision that allowed the Treasury Department's Office of Foreign Assets Control (OFAC) to freeze the assets of the Missouri-based Islamic American Relief Agency. The court said the asset seizure was lawful because the court found the organization is an affiliate of a Sudanese group that was designated as a terrorist organization in 2004, making this the first case to allow such designation based solely on an alleged branch relationship. There was no finding that the U.S. group used funds to support terrorist activities, and no criminal charges have been filed.