USA PATRIOT Act and NGOs

The USA PATRIOT Act is actually an acronym which stands for “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001″ and it was enacted into law on 26 October 2001. While the Act provides sweeping powers to law enforcement agencies in the United States to search communications, financial and medical records of individuals and also to enhance foreign intelligence abilities for gathering information on suspected acts of international terrorism, nevertheless, it has some effect on the NGO sector as well in the developing countries. Grantmaking organizations in the United States are bound by this legislation and they need to take extra measures for ensuring that the grants they make to organizations are not linked in any way to terrorist activities. In this case, all grantors are expected to check the terrorism watch lists issued by the US Government and also ensure that the grantees who receive grants from US-based foundations and other organizations also do not extend these grants through sub-granting process to unsafe individuals and agencies in developing countries. Many private foundations, international organizations and also bilateral agencies reflect the law in their agreements. If any organization is found to have violated the Act, it can face penalites, including revocation of its tax-exempt status. Therefore, all grantmakers are required to check the OFAC SDN list (the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List) which has the complete information about individuals and organizations associated with terrorism, drug trafficking and money laundering.