Al-Qadi Ruling Threatens EU and Ultimately UN Terrorist Sanctions Process

By Jonathan Winer

A legal advisor to the European Commission has reportedly recommended that the EU remove its freeze on the assets of Yasin Al-Qadi, designated by the U.S. as a terrorist financier and added to the United Nation's consolidated terrorist list in October 2001.

The recommendation, which is now to be considered by the EU's Court of Justice, threatens to topple the EU's ability to take designations made by international bodies, such as the UN, and apply economic sanctions to designated persons, without first providing each individual a legal process to challenge their designation through an open judicial or administrative proceeding.

It challenges the notion that the UN's assessment of a security threat can trump the right of an individual -- any individual -- to have his case heard.

In the opinion, EU Advocate General Miguel Poiares Maduro advised the EU to annul a regulation freezing the funds of Al-Qadi, on the ground that the EU must have judicial review proceedings in place before it implements any UN Security Council ruling affecting an individual's rights. The opinion came after years of effort by Al-Qadi to use EU legal processes to end the sanctions on him. All previous decisions had said in effect that a UN resolution trumped local legal processes. This opinion, which is not binding, but which ordinarily would be upheld by the EU higher court, turns this approach on its head.

The importance of this case for the ability of the EU to enforce UN economic sanctions cannot be overstated. It comes a month after reports that Switzerland closed its case against Al-Qadi on December 13, 2007 after more than six years of investigation, allowing his assets held in Swiss banks to be unfrozen.

In 1998, Al Qadi was reportedly accused in an FBI affidavit of transmitting $820,000 in a money-laundering scheme to finance the militant Islamic group Hamas. Al-Qadi was not charged in that case and has described the money as a loan to a friend. The U.S. Treasury Department had described Al-Qadi as sending funds to terrorist groups through a charity, Muwafaq or Blessed Relief, that it characterized as al Qaeda front that receives funding from wealthy Saudi businessmen. Al-Qadi has said the charity, now defunct, provided aid to the needy.

As an EU Advocate General, Miguel Poiares Maduro advises the EU Court of Justice on EU law, and his position is a recommendation rather than a decision. But Advocate General's recommendations are ordinarily then upheld. Poiares Maduro is a Portuguese professor of law with a strong human rights-civil liberties orientation. In 2005, a different Advocate General, French lawyer Philippe Leger advised that an agreement between the US and the EU to share passenger data information to enable the U.S. to screen it for possible terrorist threats was void due violating EU privacy laws. In the end, the US and the EU were able to negotiate a new agreement for data sharing with greater privacy protections, but this approach still remains heavily criticized by EU privacy authorities.

In the months to come, countries that want to see an international mechanism that is able to put effective economic sanctions be put into place against serious national security threats will need to consult to determine whether adjustments must be made to the current international sanctions system. Any updated framework must maintain the ability of UN Security Council resolutions to be enforced by its members, even if it is in the future accompanied by some form of process-based safeguards to address the legal rights of those targeted by sanctions. Governments need to retain the ability to freeze funds on a global basis on an urgent basis, to prevent them from being withdrawn and hidden by terrorists. Any changes to process must be designed so that they do not inadvertently lead to the fragmentation of what needs to be a universal regime for sealing off the financial system from abuse by terrorist financiers.

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