CFT vs. CSO?
The Arab uprisings galvanised ‘pro-democracy’ governments in the West into a reaffirmation of their commitment to supporting civil society organisations (CSOs) working under repressive and authoritarian regimes. A Strategic Dialogue with Civil Society was launched by the US State Department in 2011 and in 2012 the European Union (EU) set up the European Endowment for Democracy. Leaving aside debates about their methods and motives, these commitments expose a schism in Western foreign policy landscape still dominated by the ‘war on terror’, which has adversely impacted on the legitimate activities of many charities and CSOs worldwide since 2001.
In the years since 9/11, international agencies and states have established an intricate and largely opaque framework for countering the financing of terrorism (CFT). The principle architects of this increasingly global system are the United Nations (UN) and the Financial Action Task Force (FATF), guided in no small part by the US Treasury. The FATF is an international consortium of governments mandated to combat money laundering. Despite its global standard-setting role, there is no intergovernmental convention underpinning or regulating its activities. In 2001, the FATF was, logically tasked with applying the framework it had developed to combat money laundering and other financial crimes to the pursuit of terrorist funds.
This chapter describes some of the ways in which the work of CSOs continues to be constrained by the global CFT framework. Although many of these effects may be described as unintended consequences, they are also the outcome of a culture of suspicion in which links between charities and terrorist organisations have been exaggerated while measures to protect freedom of association and expression have been disregarded.
9/11 and the globalisation of CFT
In the immediate aftermath of 9/11, upon request of the US government, the UN and Financial Action Task Force adopted a series of measures that would tie the international community to the global ‘war on terror’. On 24 September 2001, George W Bush signed Executive Order 13224, empowering the US Departments of State and Treasury to freeze the assets of individuals and organisations deemed to be engaged in terrorist activities and criminalising the provision of any financial or material support to those so designated. The US PATRIOT Act, adopted two days later, increased criminal penalties for knowingly providing support or resources to terrorists; neither it nor the Executive Order require intent on the part of those accused of material support.
The substance of the two US acts was replicated and effectively outsourced to all UN states via Security Council Resolution (UNSCR) 1373 (adopted 28 September 2011), which requires countries to freeze the assets of suspected terrorists and criminalise their supporters. Whereas previous UN sanctions regimes had targeted individuals and groups proscribed by the UN, UNSCR 1373 left states free to decide unilaterally who were the terrorists based on their national interest and in the absence of a commonly agreed definition of terrorism.
The Financial Action Task Force Special Recommendations’ on terrorist financing were adopted at the end of October 2001 (another was added in 2004). These codified and expanded UNSCR 1373, requiring states to:
- Ratify and implement all UN measures relevant to terrorist financing;
- Criminalise the financing of terrorism; enact measures to freeze and confiscate terrorist assets;
- Establish reporting mechanisms for suspicious financial transactions related to terrorism;
- Enhance international cooperation on CFT;
- Establish disclosure regimes around alternative remittance and ‘wire transfer’ systems;
- Review the adequacy of laws and regulations that relate to entities that can be abused for the financing of terrorism, particularly non-profit organisations.
So within just six weeks of 9/11, the UN and FATF had extended the global framework devised to combat money laundering to terrorist financing, mandated an elaborate global terrorist blacklisting system and put the surveillance of the not-for-profit sector firmly onto the counter-terrorism agenda. There was neither time nor appetite for democratic oversight, an omission that would have significant implications for the work of CSOs and their ability to fulfil their mandates. All but a handful of the 193 UN member states are now committed at the ministerial level to implementing the FATF standards.
In 2012, the FATF concluded a three-year review of its 40 Recommendations on money laundering and nine Special Recommendations on CFT by merging the two regimes into a single set of anti-money laundering and countering the financing of terrorism (AML-CFT) requirements (countering the ‘financing of proliferation’ was also amalgamated into the AML-CFT framework, reflecting the sanctions adopted against Iran by some but not all FATF members). In doing so, the FATF made permanent a regime developed in exceptional circumstances.
‘Material support’ continues to promote climate of fear
UNSCR 1373 has resulted in the proliferation of ‘terrorist’ designations, both by nation states and intergovernmental bodies such as the UN and EU. By 2010 there were more than 200 different ‘terrorist’ lists across the world. The US alone has at least four. Complex historical struggles and protracted regional conflicts have been lumped together under the banner of ‘terrorism’, undermining the rights to self-determination set out in the UN Charter and paralysing peace-making and conflict resolution initiatives.
Statutes criminalising the provision of financial services to designated entities are supplemented in many jurisdictions by provisions on ‘material support’ provisions that criminalise other forms of alleged support for terrorism. Draconian application of these laws have had a chilling effect on charities, grant-making foundations, aid and development organisations – particularly in the peace-building and conflict resolution communities. For example, in 2012, the US Supreme Court refused to hear an appeal by the Directors of the Holy Land Foundation – for many years the largest Muslim charity in the US – who had received sentences in 2008 ranging from 15 to 65 years for providing material support to Hamas via local Zakat (charity) Committees in the Occupied Palestine Territories. These committees were not on any terrorist list and there was no evidence that the Holy Land Foundation provided funds directly to Hamas or that its funds were used, or intended to be used, to support violence. The charity itself was shut down without any recourse to legal representation.
In 2010, the US Supreme Court had upheld a ruling that the Humanitarian Law Project and others would be guilty of material support if they assisted the blacklisted Kurdistan Workers Party with conflict resolution and human rights monitoring activities in Turkey. This ruling confirmed that CSOs wishing to engage with proscribed organisations – even to advocate peaceful conflict resolution – face prosecution. Professor David Cole, who was part of the HLP’s legal team, suggested last year that the material support provisions are being applied selectively after prominent ex-US government officials led a successful campaign for the de-proscription of the People’s Mujahedin of Iran (PEK/PMOI).
In 2012 British citizens Babar Ahmad and Talha Ahsan were extradited to the US to face material support charges relating to a so-called ‘Jihadi’ website. All of the allegedly criminal conduct took place in the UK where prosecutors had decided that there was insufficient evidence to charge the men under UK law. But, with the website’s servers located in the USA, the two were transferred to US custody, having already spent six to eight years in British jails pending the conclusion of the extradition proceedings. The trial date has been set for October 201Whereas the US has expanded the concept of material support to activities many people had assumed were protected under the constitution’s First Amendment (which guarantees free speech), the EU has opened the door to the criminalisation of speech that implies support for terrorism. Under a binding 2008 EU Framework Decision, member states were given two years to criminalise “public provocation to commit a terrorist offence.” Crucially, such conduct does not have to directly advocate terrorist offences; rather, it is sufficient that the message “causes a danger that [terrorist] offences may be committed.” The UK Charities Commission has issued guidance covering the UK’s version of the law (on ‘encouragement of terrorism’), advising charity trustees that their organisations must not “promote or support extremist views or activities that promote terrorism or terrorist ideology through the charities work.” They are advised to vet proposed speakers for extremist views and links to banned organisations and assess the risks associated with events, meetings and publications in respect to the possible dissemination of extremist messages.