[Peace-discuss] It's Time to Sanction OFAC

[David Johnson]

Not the Civilian Populations of Syrian and Iran

It's Time to Sanction OFAC

by FRANKLIN LAMB

Without much doubt, the US Congressional Zionist caucus was energized this
week by PM Netanyahu's appeal to scuttle the Obama administration's
negotiations with Iran. Even as it spent roughly 27% of his 40 minute speech
wildly applauding. According to Capitol Hill sources, the caucus is
salivating over its soon to be announced legislative scheme that demands yet
more "cut em off at the knee's sanctions" (reportedly Dennis Ross's clarion
call during this week's AIPAC-Netanyahu love fest). The new sanctions will
ramp up economic pressures on the civilian populations of Iran and Syria.

As Congress pursues more civilian life disrupting sanctions for Syria, Iran
and Russia, the main source will continue to be the Office of Foreign Assets
Control (OFAC) of the U.S. Department of Treasury. This oft-described
pro-Zionist highly politicized agency will continue to act as judge, jury
and hangman as more US led-sanctions target the Syrian and Iranian civilian
populations. OFAC's draconian economic sanctions are designed to achieve
regime change in both countries. These new sanctions will be part of the
legacy of David S. Cohen, Undersecretary of the Department of the Treasury
for Terrorism and Financial Intelligence who has been the principal
architect and inspiration for OFAC's efforts to impose harsh economic
sanctions on Syria, Iran and now Russia. Cohen was confirmed by the US
Senate last month to become Deputy Director of the CIA where he pledges to
continue OFAC's "counter-terrorism" work. But what Cohen leaves behind at
OFAC warrants close scrutiny given growing evidence that it operates without
oversight or in accord with US Constitutional requirements.

As Congress pursues more civilian life disrupting sanctions for Syria, Iran
and Russia, one of the main weapons will continue to be the Office of
Foreign Assets Control (OFAC) of the U.S. Department of Treasury. This
oft-described pro-Zionist highly politicized agency will continue to act as
judge, jury and hangman as more US led-sanctions target the Syrian and
Iranian civilian populations. OFAC's draconian economic sanctions are
designed to achieve regime change in both countries.

The deepening impact of OFAC sanctions on Syria's children

Unsurprisingly, according to UNCHR and UNICEF factsheets, as well as reports
from several humanitarian organizations working in neighborhoods across
Syria, those most devastatingly being impacted by OFAC crafted sanctions are
children. Going back to the 1980's Syria was among best countries in the
Middle East and North Africa to be a child. Today, due in no small measure
to US-led sanctions it is becoming one of the worst. The sanctions which
increasingly affect most aspects of domestic life has caused the death of
thousands before their first birthday with more than three million children
suffering life-threatening effects from prolonged and rising malnutrition
and food deprivation by the time they reach five years. Statistics on
stunted growth, wasting, and underweight children are rising in many areas
of Syria will millions more lacking clean water, sanitation facilities and
access to medical care. According to UNICEF, these factors combined with
poor nutrition and lack of safe drinking water means that only 3 in 5
children reach their fifth birthday. Many young children are suffering from
anemia and Vitamin A deficiency and are increasingly suffering
psychologically with depression and post-traumatic stress disorder.

During the 1980s Syria developed the best health system in the Middle East.
Now as a result of the continuing sanctions era this is no longer the case
because OFAC sanctions often scare off suppliers of medicines and medical
equipment who do not want to battle OFAC for years in court.

One of the few hopeful signs these days for curtaining OFAC's excessive zeal
for targeting some countries civilian population on behalf of another
government in the same region is the fact that some Americans and
international lawyers are beginning to object. They are objection to OFAC's
unbridled power and the threat OFAC poses to the US Constitution and to
American values including due process. The Bill of Rights require that the
government take reasonable measures to ensure basic fairness to the private
party and that the government follow procedures reasonably designed to
protect against erroneous deprivation of the private party's interests."
OFAC does none of these.

Congress gave OFAC the power to operate - behind closed doors, without
notice, and with no adequate procedures in place to challenge its arbitrary
finger on the trigger threats and actions. OFAC designates and maintains a
list of those it considers to be "global terrorists" and once on the list, a
designee's "property and interests in property" in the United States are
immediately blocked. This destroys trade to the targeted populations. The
designee is prohibited from conducting any financial transaction in the U.S.
OFAC also has the ability to block the assets of those who have not even
been designated but are only under "investigation."

Among many recent politicized OFAC actions, the powerful agency has been
accused of loosening carefully selected Syria sanctions to support the
rebels in the civil war. In June of 2013 OFAC released a Statement of Policy
permitting basis applications to permit services in the Syrian
telecommunication industry to enable private persons to better access the
Internet and also certain petroleum transactions benefiting only rebel
forces.

OFAC is under scrutiny also for designating Russians to its Specially
Designated Nationals (SDN) list for shaky reasons like being part of Russian
President Putin's "Inner Circle," which was the justification given for
sanctioning Gennady Timchenko, Arkady Rotenberg and Boris Rotenberg. The
same OFAC practice has been targeting Syrian and Iranians civil servants for
sanctions, despite objections from the European Union, just because they may
work in high positions with the governments,.

Unfortunately, OFAC's powers still continue essentially unchecked. There are
no specific OFAC criteria governing how an entity is designated or any
evidentiary standards to ensure that a designation meets Constitutional
standards. An individual or group is not provided sufficient notice of the
violation allegedly committed or adequate access to the evidence upon which
OFAC's decision to freeze assets is based. There is no OFAC deadline to
respond to requests to unblock assets so targeted individuals or businesses
often wait years with their assets frozen until OFAC makes a determination.

One example is the tragic case of KindHearts for Charitable Humanitarian
Development ("KindHearts") which before it crossed paths with OFAC was a
highly regarded non-profit charity based in Toledo, Ohio. Its work provided
humanitarian aid abroad and at home, including assistance to the victims of
Hurricane Katrina. KindHearts' charity work ended when - without any prior
notice - OFAC indefinitely froze all of KindHearts' assets and property
pending an investigation as to whether it would designate KindHearts a
"global terrorist." OFAC's freeze of KindHearts' assets appeared arbitrary
since KindHearts had already been implementing the Treasury Department's
voluntary guidelines for charitable organizations as part of its due
diligence. After its assets were frozen, KindHearts filed a response
contesting the asset freeze and sought information on why it was being
investigated as a potential "terrorist." OFAC did not respond to the request
for over a year, at which point it notified KindHearts that it had
"provisionally determined" that KindHearts was to be designated as a
"specially designated global terrorist." As OFAC's notice did not explain
specific charges KindHearts fought for two years to obtain access to its own
documents that OFAC had seized.

In the meantime, the charity was forced to shut down as it tried to defend
itself against charges without knowing the reasons for the charges.
Eventually Chief Judge James Carr of the United States District Court for
the Northern District of Ohio angrily concluded that the OFAC's seizure of
KindHearts' assets was a violation of the Fourth and Fifth Amendments of the
US Constitution declaring that OFAC violated KindHearts' fundamental right
to be told on what basis and for what reasons the government deprived it of
all access to all its assets and shut down its operations. After more than
five years with the involvement of multiple teams of lawyers OFAC unblocked
KindHearts assets. But the charity had been forced to close its doors years
earlier.

KindHeart's Kafkaesque experience with OFAC is not unique. Over the past
several years, many organizations have been forced to shut their doors and
individuals have been stigmatized as a result of OFAC's seemingly arbitrary
actions and the lack of adequate procedures to challenge them.

The over-broad discretion accorded by Congress to OFAC to designate entities
as terrorists, combined with the lack of transparency in the process, has
given rise to abuse and discriminatory enforcement of its regulations
particularly on Muslim charities with zero proven involvement with
terrorism. Between 2001 and 2010, OFAC designated eight U.S. based charities
as "global terrorists. Of those eight, six were Muslim-based charities. Once
targeted, these organizations can only provide Zakrat (alms giving) if OFAC
grants them a license which it normally denies without explanation. OFACs
blocking of charitable funds intended for the needy is particularly
problematic for Muslim charities since, charitable giving is a religious
requirement and one of the five pillars of the Islamic faith.

OFAC is also regularly accused of favoritism. When defense contractor
Halliburton was investigated for doing business with Iran, OFAC took no
action to freeze Halliburton's assets. According to The Lawyers' Committee
For Civil Rights Of The San Francisco Bay Area, a double standard exists at
OFAC between treatment of charities and for-profit corporations, where only
corporate interests are preserved.

Another case that has raised questions of objectivity arose last year when
OFAC fined Epsilon Electronics for its sales of $3.5 million in auto audio
equipment from its subsidiaries Power Acoustik and Soundstream to Iran
through its Dubai-based distributor Asra International. OFAC leveled charges
at Epsilon, including that Epsilon lied to OFAC in its subpoena response and
other communications that it knew or should have known that Asra only sold
to Iran, and that it tried to obfuscate its Iran sales by eliminating a web
page on its own site showing its products in Iran. In response, Epsilon
hired a Beverly Hills tax lawyer who filed a response which was less than
one page of text. Their lawyer argued that the owners of Epsilon were in
fact observant Jews and would never sell anything to Iran. He also argued
that OFAC's pre penalty notice contained no evidence that any Epsilon
products were sold to Iran and that Epsilon website references to its
products in Iran were a normal business practice by Epsilon to exaggerate
its global reach in order to remain competitive with other major players in
the electronics industry. Epsilon told OFAC that any indication on its own
website that it sold products to Iran was a lie and thus there exists no
proof that any of its products actually were shipped to Iran. The hastily
archived Epsilon website claims that Iran was Asra's only market. Yet, OFAC
has sought a settlement agreement dropping charges against Epsilon raising
questions about whether it accepts Epsilon's argument of being observant
Jews who would never do business with Iran. OFAC has some explaining to do.

OFAC's designation procedure has already been found unconstitutional by the
United States District Court for the Northern District of Ohio and the Ninth
Circuit Court of Appeals as applied to two charity organizations. Although
federal court decisions condemning OFAC's procedure as a violation of due
process rights have highlighted the need for reform, more needs to be done
at the legislative and regulatory levels to ensure that OFAC's procedures
are made transparent and fair - an objective that will lead to a more
accurate designation of terrorists and, ultimately, a more effective way to
help combat terrorism.

The U.S. Constitution demands fair and equal treatment by the government.
Designated U.S. persons are entitled to due process of law, including proper
notice and opportunity to challenge designations and the freezing of assets
and other property. OFAC's procedures must be reformed to comport with these
key principles. An unfair process greatly harms those wrongfully targeted
individuals and organizations, and undermines the credibility and accuracy
of the designation process as a whole.

What is required to reform this rogue agency which OFAC has become is to
return to fundamental American constitutional requirements which would
curtail its Kafkaesque practices. The following recommendations for
reforming OFAC are based of suggestions by the Lawyers' Committee for Civil
Rights of the San Francisco Bay Area.

OFAC should be required, under penalty of judicial and legislative
sanctions, to enact:

*Specific criteria on what activity is proscribed to merit a designation and
develop evidentiary standards for determining designations;

*Provide targeted individuals with a statement of reasons for violations
that OFAC claims were committed and give them access to the evidence that
allegedly forms the basis for the designation, establish;

*Enact a deadline by which OFAC must respond to a designee's petition to be
removed from OFAC's list, by which any investigation must be completed so
assets are not frozen indefinitely;

*Make OFAC's delisting process more transparent and accessible, including
the addition of specific guidance on the delisting process in OFAC's
Frequently Asked Questions on the OFAC website and establish an online
redress program in which individuals can submit delisting petitions via a
website to facilitate processing;

*Designate an Ombudsperson to oversee the processing of delisting requests.

Sanctioning the many excesses of OFAC including its targeting of the
civilian populations of Syria and Iran as well as destroying legitimate
charities while restoring US Constitutional guarantees of fair play and
substantial justice will earn respect for America as a country that believes
in facilitating charity work. It will likely also help reduce actual
terrorism.

 

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