On 15th July 2020, the U.S. and Gulf Cooperation Council (“GCC”)-led Terrorist Financing Targeting Center (“TFTC”) assigned six targets affiliated with ISIS, including an entity allegedly posing as a charity (and its director) based in Afghanistan that supposedly provide support to ISIS’ branch in that country, ISIS-Khorasan (“ISIS-K”).

The designated entities were  Al-Haram Exchange, Tawasul Company, Al-Khalidi Exchange, Nejaat Social Welfare Organization. These entities along with an individual  were previously designated as Specially Designated Nationals (SDNs) by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) in September 2019. 

All of the property and property-related interests of the SDNs in the U.S. or in the possession or control of U.S. citizen must be sanctioned and reported to OFAC, and all transactions involving U.S. citizens or with a U.S. nexus are prohibited. Also, OFAC has the ability to impose sanctions on non-U.S. persons who provide support to such SDNs, which could include prohibiting or restricting access to the U.S. financial system.

In May 2017, the Riyadh-based TFTC was established which is a collaboration between the U.S. and the GCC Member States (Saudi Arabia, the United Arab Emirates (“UAE”), Bahrain, Kuwait, Oman, and Qatar). The TFTC has now issued five rounds of designations against 60 individuals and entities around the world and continues to utilize local intelligence in the fight against the financing of terrorism.

Some key practical takeaways from this recent action would be :

• to ensure that enhanced due diligence is always conducted when dealing with either money transfer businesses and/or charities, noting that to the extent that charitable donations are solicited in the UAE, these should only be through charities that are appropriately registered in the UAE.

• for financial institutions (“FIs”) and designated non-financial businesses and professions (“DNFBPs”) based in the UAE to consider the risk profiling and level of due diligence undertaken done on those conducting business with Syria, Lebanon, Turkey, and Afghanistan

• to consider the UAE’s focus on combatting anti-money laundering and terrorism financing, in light of the FATF having recently issued its Mutual Evaluation Report (“MER”) for the UAE in April 2020. The relevant authorities (including the financial regulators) in the UAE will inevitably be keen to ensure that FIs and DNFBPs implement relevant risk profiling and due diligence exercises to ensure that illicit financing (and by extension illicit trade) is prevented