August 13, 2014

To: Michael Arcati, Manager of ComplianceFrom: Danielle Patton, Organization Outreach Coordinator

Subj: SANCTIONS AND ITS EFFECT ON INTERNATIONAL CHARITIES

Guidelines for Charitable Giving to an International Group or Country with Imposed Sanctions

A sanction is a consequence presented to parties, groups, countries, etc., as a means of enforcing compliance to a law. “Sanctions can be imposed by the UN Security Council, the European Union (EU) and individual states.”1 The extent of the sanctions often depends on the severity of the violation. For instance, sanctions may be applied to countries which “develop weapons of mass destruction, violate human rights or trade unfairly.”2 Conversely, parties encouraging the target of another government's sanctions can declare that sanctions brought upon by particular countries or an international governmental organization can claim illegality.

Sanctions imposed on international charities are measures taken against others generally for political circumstances. In consequence of those circumstances, OFAC, or the Office of Foreign Assets Control, habitually has the authority by means of a “specific license to permit a person or entity to engage in a transaction which otherwise would be prohibited. In some cases, however, legislation may restrict that authority.”3 Ownership of fifty percent or more entities discussed on the OFAC Specially Designated Nationals and Blocked Persons list, or SDN list, is also illegal and can result in serious jail time.

In order to obtain acquiescence to trade with an embargoed country or group, a general license must be acquired. If a general license does not exist for that sanction, a written request for a particular license must be filed with the Office. The request must abide by the procedures set out in the laws pertaining to the specific sanctions item.

How to Verify if an International Group or Country has Imposed SanctionsThe target of sanctions “relate to foreign narcotics traffickers, foreign terrorists,

transnational criminal organizations, and WMD proliferators.”4 These names are blocked, meaning there is an immediate ban on deals of any kind related to these individuals and their property. Those blocked are integrated into a list distributed by the Office of Foreign Assets Control. This list, called the SDN list, includes “over 6,000 names of companies and individuals

1 See International Peace and Security (http://www.government.nl/issues/international-peace-and-security/compliance-with-international-sanctions)(last visited August 13, 2014)2See Kolodkin, Barry. What are Sanctions? (http://usforeignpolicy.about.com/od/introtoforeignpolicy/a/what-are-sanctions.htm) (last visited August 13, 2014)3OFAC’s rules could possibly contain language of OFAC's licensing procedure when dealing with specific types of transactions (http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx) (last visited August 13, 2014)4See Frequently Asked Questions and Answers (http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx) (last visited August 13, 2014)

who are connected with the sanctions targets.”5 which citizens of the United States are prohibited from performing any sort of business with those presented on this list. Therefore, checking the OFAC’s website regularly for updates on new and pre-existing restrictions is highly recommended.

Economic Condition of International Charities“International charities work throughout the world to defend human rights, to promote

peace and understanding among all nations, and to provide relief and development services where they are needed the most.”6 Yet, some international charities are located in embargoed regions. Because they are subject to the consequences of the sanctions in this case, this results in their economic suffering and charities therefore cannot efficiently carry out such acts. Not only do these charities fail economically within the country providing the sanction, but charities fail economically to other countries buckling under the glaring pressure to terminate commerce with sanctioned regions. Furthermore, citizens located in the embargoed country are directly affected, resulting in lack of medical care, malnutrition and diseases."'For anyone or any group to say that sanctions don't target people is childish," says Fatemen Hasheni of the Foundation for Special Diseases.'7

It is clear that charitable giving to embargoed locations is prohibited. However, non-governmental organizations that have knowledge regarding the detrimental consequences of economic sanctions should lend aid, within their authorization, to victims of these sanctions.

ConclusionEmbargoes can be complicated for companies to follow. Hence, it is strongly

recommended that companies refuse to trade with embargoed parties. Sanctions can change constantly, so it is vital to check regulations on a constant basis. However, if a company or charitable organization sincerely wishes to do business with another charitable organization in an embargoed area, obtaining a license will ensure smooth and uninterrupted trade.

International charities in areas of embargoes are, unfortunately, negatively affected. Great care should be taken when giving internationally to avoid giving to an area with imposed sanctions. Commerce with countries or groups without sanctions to avoid penalty of the law is suggested.

RecommendationWhen giving internationally, it is vital to facilitate the effective due diligence to ensure

appropriate giving. It is important to be familiar with the regulations of OFAC and the blocked

5 There are no broad prohibitions on dealings with countries, but only against specific named individuals and entities (http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.aspx)(last visited August 13, 2014)6 See Charity Navigator, Your Guide to Intelligent Giving (http://www.charitynavigator.org/index.cfm?bay=search.categories&categoryid=7)(last visited August 13, 2014)7 See Iranian Charity: Sanctions Hurting Health of Millions of People(http://www.commondreams.org/news/2012/10/31/iranian-charity-sanctions-hurting-health-millions-patients)(last visited August 13, 2014)

parties on their SDN list, and providing charitable giving towards those parties is not advised. Sanctions that distinctly violate international law, predominantly civil rights and humanitarian law, should not be adhered to. Humanitarian misfortune must be seen as an override to an excessively inconsiderate economic sanctions regime. The degree of a public outcry is an imperative factor in determining whether a sanction regime is too callous or too lenient.