Yousef Munayyer, Executive Director of the Jerusalem Fund and the Palestine Center, writes in Foreign Policy’s Middle East Channel about ending tax exempt donations to Israeli settlements. Acknowledging that efforts to challenge this practice through the IRS hasn’t worked, he suggests a government-led interagency approach:
FinCEN, or the Financial Crimes Enforcement Network, became an official branch of the Treasury Department with the passage of the USA PATRIOT act in 2002. It is tasked with enforcing laws and regulations relating to financial crimes like money laundering and foreign terrorism finance. The foreign component of this policy, of course, involves the State Department. When it comes to combating international terrorism finance, for example, the agencies work together to prevent funding to organizations designated by the State Department as Foreign Terrorist Organizations.
In fact, in 1995, then President Clinton issued Executive Order 12947 which stated that acts that "disrupt the Middle East peace process constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States" and funding of these acts is illegal and prohibited. In this context, the Executive Order was targeting militant organizations, Arab and Jewish alike, who used violence against civilians.
Minor changes in legislation or an Executive Order could allow the State Department to maintain a similar list of settlement organizations which American banks and charities would not legally be allowed to deal with, and would give FinCEN the appropriate authority to crack down on organizations in the United States which direct U.S. tax dollars to settlements.
