There was a report that came out a few days ago from The Institute for Research: Middle Eastern Policy, stating that the United States Department of the Treasury Office of Foreign Assets Control (OFAC) has failed to investigate the use of U.S. charitable donations to the West Bank to build, what the report refers to as “illegal” settlements. The report resulted from a 2007 Freedom of Information Act (FOIA) request, where documents pertaining to the following were requested:

“1. Internal reports about Treasury Department investigations triggered by public revelations that U.S. charitable funds flows are used to illegally confiscate Palestinian lands and commit crimes overseas;

2. Meeting minutes of key Treasury Department officials charged with combating money laundering conducted in Israel and the U.S. dealing with the Sasson report;

3. Money laundering issues especially those with a focus on U.S. organizations managing WZO money laundering.”

Essentially, the report seemed to be disturbed that there has been no OFAC investigation into the use of U.S. donations to build settlements in the West Bank.

While I don’t have any background to comment on the use of such funds to build settlements in the West Bank, I do have some knowledge about OFAC and the sanctions programs they administer. Given my knowledge and experience with OFAC, I can say that they are an agency responsible for the administration and enforcement of U.S. sanctions programs. Those programs are initiated via an executive order issued by the President. As such, at least to my knowledge, OFAC does not have the authority to independently investigate those matters outside of the sanctions imposed by the President. Therefore, while these types of issues are related in some degree to what OFAC does, because the President has not issued an executive order imposing sanctions against those parties involved in the building of settlements in the West Bank then I don’t believe OFAC is necessarily obligated or authorized to investigate such actions.

I do suppose, however, that OFAC may have gathered some information regarding these types of activities as part of their investigation of violations of other sanctions programs. However, OFAC did state in response to the FOIA request that there were no documents responsive to the request by the Institute for Research: Middle Eastern Policy. Therefore, it seems that either there has been no real evidence gathered about such activities or they are not inclined to investigate such activities.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.