Cross-posted at Just Security.
According to reports, President Donald Trump may shortly issue an Executive Order directing the State Department to examine whether it should designate the Muslim Brotherhood as a foreign terrorist organization (FTO).
Designating the Muslim Brotherhood as an FTO could have serious legal and reputational implications for any number of prominent, mainstream civic and political organizations. It could also serve as a pathway for designating any of those associated – or even loosely connected – with the Muslim Brotherhood as FTOs. Alleging connections to the Muslim Brotherhood has long been a smear tactic used against prominent Americans (such as Clinton aide Huma Abedin and conservative anti-tax advocate Grover Norquist) and a number of mainstream Muslim civic and political organizations.
Significant sections of Muslim civil society could be affected, including those who provide religious, charitable, or social services in the U.S. as well as the Middle East, South Asia, Africa and around the world.
With all of this in mind, here’s a closer look at what it means for the State Department to designate the Muslim Brotherhood an FTO.
Labeling an Organization an FTO
The U.S. government designates entities as FTOs under two broad legislative authorities, which often work in tandem. This labeling process has few procedural protections, but has enormous consequences for the designated FTO, and for any organization or individual that provides any support or services to an FTO.
The Anti-terrorism and Effective Death Penalty Act of 1996 (AEDPA) gives the Secretary of State broad power to designate any entity a “foreign terrorist organization” upon determining that:
1) the entity is a foreign organization;
2) the entity engages in terrorist activity, terrorism, or material support of terrorism, or retains the capacity and intent to engage in terrorism; and
3) the terrorist activity or terrorism threatens the security of US nationals or US national security.
The Secretary of State makes such determinations in consultation with the Attorney General and Treasury Secretary, based on an administrative record that may include classified information. The designation allows the U.S. government to block FTO funds that are in the control of U.S. financial institutions; to bar members of FTOs from entry into the U.S.; and to prohibit any U.S. financial institution, organization, or individual from providing any material support, services, or resources to an FTO under penalty of law.
Upon making an FTO designation, the statute requires the Secretary of State to notify Congress and publish the designation in the Federal Register. AEDPA allows FTOs to challenge designation in the D.C. Circuit Court of Appeals, but limits judicial review to a determination of whether the designation had “substantial support” in the administrative record and was not “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
Groups challenging designation often have little information regarding the allegations against them, as they are prohibited from seeing any classified evidence supporting the Secretary of State’s determination (the court may view the classified information in camera and ex parte). Though Secretaries of State have delisted a number of FTOs that have petitioned for removal, no FTO has successfully had a designation overturned by the D.C. Circuit. A person charged criminally for providing material support to an FTO may not challenge the propriety of the designation. There are currently 61 designated FTOs.
Blocking Assets – Treasury’s Role
The second method for declaring an entity an FTO is through the International Emergency Economic Powers Act (IEEPA), which authorizes the president to declare national emergencies and establish economic sanctions against “any unusual and extraordinary threat.” Executive Order 13,224, issued by President George W. Bush on September 23, 2001, invoked IEEPA to enable the Secretaries of State and Treasury broad discretion to block the assets of persons who commit, threaten to commit, or support terrorism, or disrupt the Middle East peace process, by designating them Specially Designated Global Terrorists (SDGT).
Once designated, Treasury’s Office of Foreign Asset Controls (OFAC) is empowered to block and freeze the assets of the SDGT, anyone “owned or controlled by,” or acting “for or on behalf of and SDGT,” and to prohibit the provision of material support to them by any person. IEEPA authorizes OFAC to block an entity’s assets pending an investigation to determine if designation is appropriate. IEEPA does not require the Secretaries of State or Treasury to provide the SDGT notice of the designation, or any public evidence supporting designation, but the designation is published to put all financial institutions and all persons on notice that they may not provide any financial support or services to the SDGT without first obtaining a license from OFAC.
Treasury claims that in order to designate an entity an SDGT and block its assets it needs only meet the low threshold of reasonable suspicion that an entity provided “financial, material, or technological support for, or financial services to,” or is “otherwise associated” with an SDGT. Judicial review of SDGT designations is limited by the Administrative Procedures Act to a review of the administrative file, and requires a determination that the Secretary acted in an arbitrary or capricious manner or abused his discretion in order to overturn a designation.
Broad Discretion Compounds Risk Innocent Individuals May be Affected
The wide discretion these authorities give the Secretaries of Treasury and State, combined with the unduly broad definitions of proscribed conduct (particularly material support, which can include activities that are not intended to and do not in fact support terrorist activity), the lack of notice of the allegations and opportunity to challenge the evidence, and the limited judicial review create the risk that innocent individuals and organizations may be designated as FTOs or SDGTs. Such improper designations may then have a domino effect, as any organization or individual associating with or providing financial services or support to a wrongly designated SDGT may in turn be designated.
All FTOs designated by the Secretary of State under AEDPA are also on the SDGT list, which now includes more than 900 entities and individuals.
The Treasury Secretary may designate U.S. persons and U.S. organizations as SDGTs, though federal courts reviewing asset blocking cases involving U.S. charities have determined that OFAC freezing of assets implicates the 4th and 5th Amendments, requiring a judicial warrant based upon probable cause and adequate notice and due process. The Treasury Department has not yet published new procedures to assure constitutional rights are protected.
Using these authorities, the Treasury Department shuttered nine U.S. charities since 2001, seven of which were Muslim. Several were never charged or convicted on terrorism-related charges, but were effectively put out of business through asset blocking.
The Muslim Brotherhood
According to experts on the Middle East, the Muslim Brotherhood is a religious organization, a political party, and a social service provider that has operated for decades in numerous Middle Eastern, South Asian, and African countries. Though it has engaged in political violence in the past, it disavowed violence decades ago in favor of political engagement. In 2011, it won elections in Egypt, forming a government that was fully recognized by the United States. Two previous administrations, one Republican and one Democratic, concluded the Muslim Brotherhood did not engage in terrorism and did not warrant designation as an FTO.
For more information on the designation processes and impacts on civil society organization, see: