US terrorist watchlist flags 'ordinary people' in error
An increasing number of US businesses are screening their customers against a US Treasury watchlist of suspected terrorists and drug traffickers, resulting in citizens with names similar to those on the list being denied services, according to a new report.Skip to next paragraph
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The report, released Tuesday by the Lawyers' Committee for Civil Rights of the San Francisco Bay Area (LCCR), says that the list of "specifically designated nationals" (SDNs) kept by the Office of Foreign Assets Control (OFAC) in the US Treasury Department has resulted in "stigma as well as delayed or denied consumer transactions" for "ordinary people even where there is no discernible relationship to national security."
In recent years, a growing number of Americans have endured stigma and lost opportunities in ordinary consumer settings because their names are mistakenly flagged as being on a terrorist list. This list of suspected terrorists, narcotics traffickers, and other "specially designated nationals" is maintained by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC), and now includes over 6,000 names. Financial institutions, credit bureaus, charities, car dealerships, health insurers, landlords, and employers are now checking names against the list before they open an account, close a sale, rent an apartment, or offer a job.
Few people in the United States are actually on the list. But because many names on the OFAC list are common Muslim or Latino names - such as "Mohammed Ali" or "Carlos Sanchez" - people in this country with similar names are increasingly getting snagged. Even a shared first or middle name, including some of the most common names in the world, can lead to consumer transactions being denied or delayed. Moreover, at a time when Muslims, Arabs, and immigrants in the United States are already subject to prejudice and suspicion, it is hardly surprising that individuals from these vulnerable communities encounter problems from OFAC list misidentification.
The report notes that among those names on the OFAC list that could generate "false positives" are common names such as Abdul, Diaz, Lopez, Lucas, Gibson, and Patricia.
The LCCR report documents several cases of people who were denied services. Tom and Nancy Kubbany of California were refused by a mortgage broker because Mr. Kubbany's middle name is Hassan, an alias used by one of the sons of Saddam Hussein. A Phoenix, Ariz., couple was initially prevented from purchasing a home because the man's first and last names, both common Hispanic ones, were similar to a name on the OFAC list. Another California couple was flagged when buying exercise equipment because the man's first name is Hussein. This required investigation "because of Saddam Hussein," according to a representative from the bank that provides financing to the exercise store's customers.
The OFAC list predates September 11, 2001, but was expanded by President Bush soon after the attacks to include "specifically designated global terrorists," to freeze the assets of those who commit or support terrorist acts. The presidential order also expanded responsibility for engaging in transactions with those on the list to all US citizens, residents, and businesses.
In addition, the order made no exception for minimal transactions, so even a sale worth pennies could be penalized under the law. Furthermore, regulations issued by the Treasury Department in 2003 made clear that while "willful" violations of the law could result in criminal penalties, even transactions without any "willful" intent to violate the law could trigger civil penalties. Therefore, by its terms, the Executive Order extended liability to hair stylists, flower peddlers, hot dog vendors, or any Jane Doe who unwittingly sold a product or provided a service to a designated person.