Victor Comras [Special Counsel, Eren Law Firm]: "The process used to designate, and freeze the assets of, terrorists and those providing material support for terrorism, has come under serious judicial challenge here and abroad. The European Court of Justice recently invalidated the EU's designations (binding on all EU member countries) of Yasin Al Kadi and the European branches of the Al Barakaat network, on grounds they were denied an opportunity to be heard as guaranteed by the European Convention of Human Rights. Similar questions are being raised in several cases now before the US courts.

One of these cases involves the Oregon branch of the international Al Haramain network of charities believed to have helped fund al Qaeda, the Taliban and other terrorist groups in Bosnia and Chechnya. The US Treasury Department originally designated the Oregon based Al Haramain Islamic Foundation (AHIF) in 2004 as a terrorism supporting organization, and then, again, in 2008, as part of its designation of the complete global Al Haramain network. In Al Haramain v. Treasury, now before the US District Court in Oregon, AHIF-Oregon is challenging these designations on constitutional and other grounds. A key issue in this complex case is whether the notice of designation and the hearing procedures provided by Treasury Department meet constitutional due process and Fourth Amendment protection standards.

The ability to designate terrorism supporting organizations and to freeze their assets and financial transactions is critical to international efforts to combat terrorism financing. Identifying and blocking terrorism financing transactions usually entails sensitive and highly classified sources and methods, and quick responsive action. The evidence developed does not often lend itself to prior judicial proceedings. It is incumbent on the government, nevertheless, to stand ready to justify such actions, and each dossier should be prepared from the beginning with oversight and possible judicial review in mind. It seems elementary that the first step in this process is to provide adequate notice of designation and an opportunity for a fair hearing to those against whom such actions are taken.

AHIF maintains that the Treasury Department's designation and asset blocking orders, in this case, were so lax as to amount to a deprivation of its property without due process. And U.S. District Court Judge Garr King appears inclined to agree. In a 63 page opinion on motions for summary judgment, published November 6, 2008, Judge King expresses serious concerns on the adequacy of current methodology used by the Treasury Department in making designations. While he found that the Treasury Department had sufficient evidence upon which to base its designation of Al Haramain, the deficient notification provided and the lack of procedures for a hearing, raised serious due process and Fourth Amendment unreasonable "seizure" issues.

The Treasury Department's notification of designation in this case consisted of little more than a letter explaining the consequences of designation along with some 260 pages of excerpts from documents, news clips and press releases attached. No discussion or summary was provided indicating the specific rationale for the designation. Judge King found that such notice failed to meet the due process standards established by Mathews v. Eldridge.

In the Mathews case, the Supreme Court recognized that due process generally requires the government to provide substantive notice and an opportunity to be heard before depriving a person of property. Judge King held that the notification package in this case failed to adequately identify the statutory and factual reasons for the designation. He could find no justification in the record for such cursory treatment. Rather, the Treasury Department maintained only that it was "not obligated" to provide anything more.

Judge King noted also, that while Treasury procedures allowed AHIF to file a request for reconsideration, it remained unclear when and under what circumstances such re-consideration would occur. In fact, it took OFAC some 3 years to consider and deny relief, during which time the assets subject to the designation blocking order remained frozen. Despite these findings, Judge King agreed to defer a final ruling on this point asking the parties to brief further as to whether this constitutional failing constituted more than "harmless error," given the other factors in the case.

Judge King ruling also expresses concern with the Fourth Amendment consequences which might flow from such Treasury Department asset blocking orders. Such blocking orders, Judge King mused, were more than temporary measures, and might well constitute a "meaningful interference" with property so as to qualify as a seizure for purposes of the Fourth Amendment. The central issue to be addressed, he said, was whether or not such seizure would be "reasonable" under the circumstances. He felt that neither party had briefed adequately on that question.

Given the importance the designation process has for combating terrorism, here and abroad, special efforts must now be made by Treasury to provide as much transparency as possible to the designation process, and to re-assure the public, here and abroad, that appropriate safeguards and judicial review is in place to assure against abuse."