Nonprofit organizations (NPOs) that have been inhibited in their work due to national security laws and policies could see some positive developments in three House of Representatives-passed amendments to the National Defense Authorization Act (NDAA) for fiscal year 2021.
Amendments relating to bank derisking of charities, the impact of comprehensive sanctions on civilian populations, and a new Congressional commission to review U.S. counterterrorism laws broadly have passed the first major hurdle to being passed as part of the massive defense bill. Each amendment was included in the version of the NDAA that passed the House in mid-July 2020.
An amendment introduced by Rep. Carolyn Maloney (D-NY) that primarily addresses concerns around beneficial ownership contains language drawn from the COUNTER Act (The Coordinating Oversight, Upgrading and Innovating Technology, and Examiner Reform Act of 2019, HR 2514), which passed the House last fall. The amendment would require the Secretary of the Treasury, in consultation with Federal regulators and other relevant stakeholders, including the private sector, to undertake a formal review and issue a report on the “adverse consequences of financial institutions de-risking entire categories of relationships, including charities, embassy accounts, money services businesses”; the reasons why financial institutions are engaging in derisking; the association with and effects of derisking on money laundering and financial crime actors and activities; and the most appropriate ways to promote financial inclusion while maintaining compliance with the Bank Secrecy Act. (Section 7111)
The study must include an assessment of policy options to reduce compliance costs that may lead to derisking, and any “formal and informal feedback provided by examiners that may have led to de-risking,” any “best practices from the private sector that facilitate correspondent bank relationships.”
In addition to this study of derisking, the amendment would also require Treasury to develop a strategy to reduce derisking and its adverse consequences.
A Senate amendment with broader language on derisking did not survive a vote in that chamber.
Impact of Sanctions
There is currently no U.S. government assessment of the impact of comprehensive U.S. sanctions on targeted countries. An amendment introduced by Rep. Tulsi Gabbard (D-HI) would require an initial and annual report to Congress from the Administration regarding the humanitarian impact of sanctions. The amendment defines comprehensive sanctions as “any prohibition on significant commercial and financial activity with a foreign government that is imposed by the United States for reasons of foreign policy or national security.”
Specifically, the amendment would require an examination of the impact of these sanctions, including the ability of the civilian population to access water, sanitation and public health services; changes to the general mortality rate, the maternal mortality rate, life expectancy and literacy; environmental impacts experienced by the sanctioned country; the delivery of economic aid and development projects in the country; and the extent to which there is an increase in refugees or migration to or from the country or an increase in internally displaced people, among other items. The study would also look at whether the stated foreign policy goals of the sanctions are being met.
The report would be sent to the Committees on Foreign Affairs, Financial Services, and Ways and Means in the House of Representatives. In the Senate, the committees on Foreign Relations; Banking, Housing and Urban Affairs; and Finance would receive the report. Congress would then “examine the report with a focus on the humanitarian impacts of comprehensive sanctions described in the report, including with respect to human rights, medical services, food and malnutrition and access to water, sanitation, and hygiene services,” the amendment states.
An amendment submitted by Rep. Eliot Engel (D-NY) would establish a National Commission on U.S. Counterterrorism Policy within Congress to reevaluate U.S. national security and counterterrorism policy. This would include an assessment of the U.S.’s counterterrorism objectives, priorities, capabilities, policies, programs, and activities on the evolving threat landscape, and lessons learned over the past 20 years. Importantly, it would examine the impacts of these counterterrorism policies, programs and activities on civil rights and civil liberties in the U.S. and internationally recognized human rights and humanitarian principles abroad.
The Commission would be comprised of 14 commissioners with relevant expertise in counterterrorism, diplomacy, law enforcement, Armed Forces, law, public administration, Congress, intelligence, academia, human rights, civil rights, or civil liberties. At least one commissioner shall possess a civil rights or civil liberties background and one shall have a background in international human rights.
Approximately 18 months after forming, the Commission would submit a report to Congress on its findings, input and recommendations received, which would be made public within one week.
Before becoming law, all of these amendments need to survive a House and Senate conference committee. Charity & Security Network will continue to monitor and report on these developments.