Federal Judge Restrains OFAC Designation

According to the story in the Toledo Blade, on October 9, 2008, Chief Judge James Carr issued a temporary restraining order to prevent OFAC from designating KindHearts for Charitable Humanitarian Development, Inc. (KindHearts) as a specially designated global terrorist (SDGT). Judge Carr's order was spurred by a request purportedly spearheaded by the American Civil Liberties Union (ACLU) to block OFAC from following through with the SDGT designation some two and a half years after the US Department of Treasury first acted against KindHearts. On February 19, 2006, Treasury announced the freezing of KindHearts' assets in order to prevent KindHearts from providing material support to terrorists and their facilitators. In the February, 2006 Treasury press release, the US Government laid out a persuasive case against KindHearts, revealing real and immediate links between the charity and Hamas.

If OFAC is unable to designate SDGTs without first receiving the concurrence of a court or judge, the International Emergency Economic Powers Act (IEEPA), as particularly energized by Executive Order (EO) 13224, become muted. But, due process does not necessarily mean resorting to a court or judge, and I suspect OFAC will attempt to fashion its own in-house version of Constitutional due process going forward if unsuccessful at overcoming Judge Carr's order via other legal means. Regardless, the order calls into question those mechanisms via which entities and individuals become listed on any of the denied parties lists and will be worth following. After all, KindHearts appears to be a litmus slam dunk for appropriate denial designation.