28 February 2002

Fact Sheet: Background On Terror Assets Designation Process

Shortly after the terrorist attacks on September 11, President Bush signed Executive Order 13224 to block the funds of terrorists and anyone associated with terrorist groups or terrorism, and asked Treasury Secretary Paul O'Neill to lead the campaign to expose, isolate, and incapacitate the terrorists' financial networks. The result has been the creation of a list whose members have had their financial assets in the United States frozen.

The following text provides background information about the process whereby individuals and entities are designated, and also how they may seek to be removed from the designation list.

How are the names of individuals and entities vetted for designation?

A number of US agencies, including the Treasury, State, Justice, the FBI and the intelligence community, review open source and confidential information, including tips and leads, about persons and entities who commit, threaten to commit or support terrorism. A subset of the agencies are then responsible for developing a background file, which is reviewed by a larger group, to see if there is adequate material to begin the designation process. These files are also reviewed for legal sufficiency under President Bush's September 24 Executive Order. The final determination on designation is then forwarded for decision to the National Security Council, which convenes a meeting of deputy Agency heads. Upon their recommendation, the Secretary of the Treasury, in cooperation with the Secretary of State and the Attorney General, issues a designation and blocking order. This blocking order is implemented by the Treasury Department's Office of Foreign Assets Control (OFAC). Our Embassies worldwide are also consulted to provide information and advice. We also take into consideration comments from our close friends and allies.

How does the process for seeking removal from the list work?

• OFAC has an established practice for reconsideration of designations and, where appropriate, removal of designated persons (individuals or entities) from the lists under its various designation programs. OFAC regulations provide for post-designation administrative review and remedies (Sections 501.806 and 501.807 of OFAC's regulations in 31 Code of Federal Regulations).

• After receiving a removal petition, OFAC usually seeks additional information from the petitioner and engages in other research and investigation in order to establish, or refute, the claim that the petitioner has sufficiently changed the circumstances or behavior that caused him to be designated.

• Removals, which are not frequent, have nearly always been in cases where the petitioner has individually established that he is no longer engaging in the activity or activities that qualified him for designation under the applicable Executive Order.

• Most petitioners initiate the review process simply by writing to OFAC. Exchanges of correspondence, additional fact-finding, and, often, meetings occur before OFAC decides whether there is a basis for removal. Most parties seeking removal have followed this approach.

What factors are involved in removal requests?

Removal factors in designation petition cases include:

• Change in circumstances or behavior. The basic removal petition issue is nearly always whether the petitioner has made a demonstrable break with the designated entity.

• Documents. Proof of resignation or retirement from any position with the designated firm/organization or from any agency relationship with it (e.g., corporate records, retirement and pension records, tax records, correspondence with the corporation/organization).

• Additional research and investigation. OFAC also initiates its own follow-up research and investigation to provide us with current information about the petitioner and his claimed separation from the designated entity. In this process, we look for information that corroborates the petitioner as well as information indicating that the petitioner's assertions are deceptive or that the petitioner otherwise is not credible.

• Terms of Removal. Statements admitting and describing past and current relationships with the designated entity and pledges not to act for, or on behalf of, those persons or any other designated entity or individual.

Is there a process to expedite the administrative appeal process if necessary or so desired?

Removal petitions are handled on a case-by-case basis. While no specific process exists for expedited review, a situation might indicate the need for accelerated review.