CounterPunch: It’s Time to Sanction OFAC

Original article from CounterPunch

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.
Franklin Lamb’s most recent book, Syria’s Endangered Heritage, An international Responsibility to Protect and Preserve is in production by Orontes River Publishing, Hama, Syrian Arab Republic. Inquires c/ The author is reachable c/