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Treasury Department Asked to Withdraw Anti-Terrorism Financing Guidelines

December 18, 2006

The Treasury Guidelines Working Group sent a letter [pdf] to the U.S. Department of Treasury Secretary Paulson on December 18, 2006, requesting the Treasury Department to withdraw its revised “Anti-terrorist Financing Guidelines: Voluntary Best Practices for U.S.-based Charities.” Instead, the letter asked that Treasury endorse the Working Group’s own Principles of International Charity [pdf]. The working group is a broadly representative coalition of more than 40 U.S. charities, foundations, religious organizations, corporations, umbrella associations, watchdog groups and advisors, created in the spring of 2004 and coordinated by the Council on Foundations.

Signed by Council on Foundations’ President and CEO Steve Gunderson, the letter to Secretary Paulson acknowledges that the new version of the Guidelines includes revisions that respond to some of the previous concerns raised by the charitable sector. However, the letter also points out that the Guidelines continue to:

  • Impose onerous information collection and reporting requirements that do little to protect charities from terrorist abuse. Many charities may not have the resources to fund the cost of complying and will be forced to abandon work that is critical to the global fight against terrorism.
  • Significantly exaggerate the extent to which U.S. charities have served as a source of terrorist funding, resulting in an overstatement of the risk that donations to legitimate charities may be diverted into the hands of terrorists.
  • Be characterized as voluntary by the Treasury Department and, therefore, should not become a criterion for evaluating tax-exempt status.

The letter was written in response to the third version of the Guidelines that the Treasury Department issued on September 29, 2006 . The Guidelines were originally issued in November 2002 (and subsequently revised in December 2005) to assist charitable organizations in complying with Executive Order 13224 and the USA Patriot Act following the September 11 terrorist attacks.

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