PerspectiveWhat’s the New Terror Financing Executive Order All About?
Prior to September 25, 2001, the United States used two primary tools to designate terrorists. In 1995, President Bill Clinton issued Executive Order 12947 in an effort to provide the State and Treasury Departments the legal authority to designate terrorist groups who were disrupting the “Middle East Process.” E.O. 12947 was narrowly scoped and did not provide the United States the ability to sanction groups or individuals disconnected from violence in the Middle East. Two years later, Congress passed legislation providing the State Department the ability to designate Foreign Terrorist Organizations (FTOs) pursuant to the Immigration and Nationality Act. “Simply put, terrorism designations, much like the threat posed by al-Qaeda, were an afterthought before 9/11,” Jason Blazakis writes. That changed last week when President Donald Trump updated E.O. 13224 to expand both State and Treasury’s ability to wield sanctions against terrorists.
Ten days after September 11, 2001, President George W. Bush, in a joint congressional session, declared financial war against terrorists. While the Twin Towers and the Pentagon were still smoldering, Bush said, “we will starve the terrorists of funding…and we will pursue nations that provide aid or safe haven to terrorism.”
A few days later, Bush signed Executive Order 13224, which provided expanded legal authorities for the Departments of State and Treasury to designate individuals and organizations as “Specially Designated Global Terrorists” (SDGTs). Since the inception of E.O. 13224, the U.S. government has designated (and in some cases later delisted) more than 1,000 entities and individuals.
Jason M. Blazakis writes in Just Security that prior to September 25, 2001, the United States used two primary tools to designate terrorists. In 1995, President Bill Clinton issued Executive Order 12947 in an effort to provide the State and Treasury Departments the legal authority to designate terrorist groups who were disrupting the “Middle East Process.” E.O. 12947 was narrowly scoped and did not provide the United States the ability to sanction groups or individuals disconnected from violence in the Middle East. Two years later, Congress passed legislation providing the State Department the ability to designate Foreign Terrorist Organizations (FTOs) pursuant to the Immigration and Nationality Act.
Neither E.O. 12947 nor the FTO legal authorities provided the U.S. government sufficient powers to curb the financing of terrorism. The government cited E.O. 12947 sparingly, with no more than a handful of groups and individuals ultimately being designated. The FTO sanction was inherently limited to organizations and, thus, could not be directed against specific individual terrorist financiers.
“Simply put, terrorism designations, much like the threat posed by al-Qaeda, were an afterthought before 9/11,” Blazakis writes. “Between the FTO list and E.O. 12947, fewer than 50 individuals and entities were sanctioned as terrorists under U.S. law before September 11, 2001. After 9/11, the U.S. government began aggressively sanctioning terrorists. It had no choice: The 9/11 Commission found that al-Qaeda operatives had abused the formal U.S. financial system when they cashed checks, made bank deposits and ATM transactions as they prepared for their deadly skyjackings.”
E.O. 13224, issued in the days after 9/11, represented a practical manifestation of Bush’s rhetoric to starve the terrorists of their financing, but since its adoption, the underlying legal bases for State and Treasury Department designations remained unaltered. As such, E.O. 13224 didn’t adapt to changing legal interpretations or the evolving threat landscape.
That changed last week when President Donald Trump updated E.O. 13224 to expand both State and Treasury’s ability to wield sanctions against terrorists. What are the practical implications related to the president’s recent terrorism finance decision-making?
