FROM THE OFFICE OF PUBLIC AFFAIRS

April 13, 2004
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Treasury DAS Juan Zarate's Prepared Remarks at the Islamic Society of North America's Fifth Annual Education Event

Assalamualaikum. I would like to thank the Islamic Society of North America for inviting me to be part of their Fifth Annual Education Event. I have been fortunate enough to speak and work with ISNA in the past, and value our developing relationship. This weekend, you have welcomed me yet again, and I continue to be grateful for your outreach and hospitality.

Our ongoing cooperation bears testimony to our sustained efforts and shared commitment to overcome a challenge of tremendous importance to all of us. Our challenge, simply put, is to protect the sanctity of charitable giving - indeed, to encourage people to give to those in need - in a vulnerable global environment.

The act of charity is sacred in Islam, and it is sacred in American culture. We Americans, like many of our global neighbors, embrace the ideal of helping those who are unable to help themselves.

The act of charity is also essential to millions of impoverished and needy people around the world. The immediate survival and future hope of those afflicted by natural and manmade disasters often hinge on the responsiveness of the global charitable community. This generosity of strangers and friends alike in times of need often traverses borders, languages and beliefs.

Tragically, our world also encompasses some who have chosen to inflict violence and hate. These terrorists, preying on the kindness of strangers and the philanthropic spirit, have infiltrated the charitable sector.

Terrorists groups, desperate to promote their agendas, continue to seize on charities as a means of raising and moving funds and logistical support. The infrastructure of charitable organizations and their geographic scope have enabled terrorist groups to shift funds, supporters and operatives around the world quietly through charities.

This terrorist abuse of charities has created two problems of enormous concern to all of us. First, it has introduced an immediate and significant threat to our national and international security. Second, it threatens to chill the sacred and essential role that charitable giving represents in our global society.

Overcoming these problems requires leadership and sustained cooperation by and between the global charitable community and governments around the world. We can and must work together to defeat these problems.

This is an opportunity to show the world that the partnership between government and charity is more powerful than the prevarication of charity by terrorists. We must seize this opportunity together.

Our partnership must begin with the recognition that protecting our security and advancing charitable giving are not mutually exclusive interests. On the contrary, advancing charitable giving can promote our national and international security and interests. We do not have to look very hard to see this relationship in practice:

• Under President Bush’s initiative, the United States Government established the Afghan Children’s Relief Program. This Program successfully joined the resources of our Government and the American donor community to provide direct and immediate assistance to the most vulnerable victims of Afghanistan’s decade of repression and stagnation under the Taliban regime. Such assistance is crucial to promote a stable future for Afghanistan, a development which serves both charitable and international security interests.
• Under the authority of the United States Treasury Department, we issued a general license to provide urgent relief to the victims of the Bam earthquake in Iran. Once again, this critical effort could not have succeeded without the partnership and team work of our Government and donor community.

In addition to specific relief efforts such as these, our Government has worked closely with others around the world to promote transparency and accountability in the charitable sector. Independently, bilaterally and through various international organizations, governments all over the world are reforming their charitable sectors to restore the confidence of donors in the integrity of charitable giving.

These efforts demonstrate that our partnership and collective action can enact powerful and positive changes that advance the interests of charitable giving and national security.

Unfortunately, however, these efforts are not enough. Terrorist abuse of charities has created an urgent need to identify and shut down charities that purport to serve legitimate charitable interests, but in fact funnel funds to terrorist activities and organizations. Governments around the world have designated a number of these professed charities to cut off sources and means of terrorist financing and support. These critical actions protect international security by attacking the resources that terrorists require to act.

Beyond our immediate national and international security interests, these designations restore confidence in the charitable sector. The donor community has a right to know that funds given with the noble intent of advancing charitable causes actually reach the intended beneficiaries. The donor community also has a compelling interest in knowing when this legitimate and worthy expectation is not met. Even more importantly, the donor community has an urgent interest in knowing when honorable charitable intent is twisted to advance the interests of terrorism.

Our designations of charities corrupted by terrorists advance these interests by serving notice to the donor community of those organizations that terrorists have abused to prey on donor goodwill. I cannot overstate the importance of our designations in this regard.

But our designation actions alone are not enough. Designations, by themselves, do not represent a satisfactory solution to the threat of terrorist financing in the charitable sector. We must work together to prevent terrorists from infiltrating charities in the first place. This is a difficult challenge, and our success depends on the ability of our Government and the charitable community to work together.

Terrorists’ abuse of charities has prompted a global review and sustained public dialogue of the workings and efforts of the charitable sector. By studying the ways terrorists have abused charities in the past, we are better able to educate charities and donors about how they can protect themselves against this threat moving forward.

Our Government is working intensely with other governments around the world to develop case studies and typologies of terrorist abuse of charities. Through the Financial Action Task Force, we have disseminated and published some of these case studies and typologies - available on the FATF’s website (http://www1.oecd.org/fatf/). In addition, we have developed measures and safeguards that donor communities and non-profit organizations can adopt to protect themselves against abuse. The FATF has issued and published international best practices to advance these interests, also available on the FATF website. We will continue to work with the international community to develop and share this information as we learn more about the challenges we face.

The Treasury Department has also acted independently to promote awareness of steps that U.S.-based charities can take to protect themselves against terrorist abuse. In November 2002, we released the Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S.-based Charities. We produced this document in response to concerns by the Muslim-American community that terrorist infiltration of charities could have a chilling effect on charitable giving. It is important to understand that these Guidelines are, as advertised, both voluntary and best practices. That being said, the guidelines provide important signposts and practices for the charitable sector and donor community in this new era of terrorism.

We recognize that many of the steps promoted in the Guidelines may not always be feasible or cost-effective, especially for smaller charities with limited operations. But it is equally important to recognize that the problem we face is difficult. We all have responsibilities to ensure the safety and sanctity of charitable giving is preserved. Defeating this problem will require our sustained commitment and mutual assistance to further develop and improve upon the efforts that I have discussed.

Despite the difficulties we face, I am confident that we can defeat terrorist financing in the charitable sector by working together. The American donor community, along with the United States Government, has a unique opportunity to advance the standards and effectiveness of charitable giving throughout the world. No other country has a donor community or a government that can match our resources or potential. Let us not forget the power that we have to demand and enact positive change if we are unified and informed. It is this community - you - that has the ability to change the business practices of the international charitable sector. Perhaps more importantly, you are the ones that can help affects the hearts and minds of Muslims around the world. Ultimately, we can only succeed in security charitable giving and ensuring that terrorists are not abusing our good will by working together.

As we do this, we must remember the importance and compatibility of our collective interests. By creating a strong partnership between the Government and the charitable community, we can promote responsible charitable giving and protect our national and international security.

The importance of these interests demands the very best of our cooperative efforts. Therefore, the time that we spend together is wisely invested. I am pleased to announce that the Treasury Department has invited the Islamic Society of North America to participate in an outreach event at Treasury later this month to continue our dialogue with the charitable sector. I look forward to discussing and advancing these issues with you, not only this weekend, but also as we move forward to combat terrorist financing together.

Thank you.

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