A Treasury Department official, speaking at a gathering of attorneys, announced that the department is revising its Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S.-Based Charities, based on public comments submitted last February. According to the official, the revisions are undergoing review and the department hopes to release them soon. This will be the third version of the Guidelines, since their release in November 2002; earlier versions have been criticized for hindering legitimate charity work. The guidelines were first revised on Dec. 5, 2005. On May 5, at an American Bar Association panel on international charitable activities, Andrea Keller of the Terrorist Financing & Financial Crimes division of the Treasury Department summarized the expected changes, as follows:

• A statement will be added to the Introduction clarifying that non-compliance with the guidelines is not a violation of any law and that Treasury's best practices are not exhaustive or comprehensive.
• A lengthy footnote will explain Treasury's assertions about the danger of diversion of funds to terrorists from charities. (Charities filing comments to the previous version objected to Treasury's characterization of the extent of such diversion.) Keller said Treasury's position is justified because 41 of the 430 entities/persons on their Specially Designated Nationals list are charities, and 10 percent is significant. Five of the 41 charities are U.S.-based. However, she made no mention of the relative dollar amounts involved or of the fact that there are over 1 million charities in the U.S.
• The revision will state that charities are not arms of government.
• Treasury will state that it does not endorse the terror watch list of any other country.
• A reference to Internet searches in vetting people and groups will be deleted, but other search items will remain.

Keller also said Treasury disagrees with the charitable sector's view that diversion of funds to supporters of terrorism only occurs when funds go directly for terrorist activities, since front groups have one foot in the legal world and one in the illegal world. She said Treasury is working on a risk matrix that is intended to help charities assess their vulnerability to abuse by terrorists, but did not know whether Treasury will seek public comment on it. Other speakers on the panel included Kay Guinane of OMB Watch and attorney Jennifer Reynoso, of Simpson Thacher & Bartlett in New York, NY. They summarized the history of the guidelines and issues raised in public comments and by the charitable sector. The Dec. 5, 2005 version of the Treasury guidelines, which is currently operational, was widely anticipated by charities and foundations. A working group, led by the Council on Foundations, had worked with officials from the Treasury Department to make changes to the 2002 version. The resulting version was received with disappointment by many charities. The Council on Foundation’s working group called for the withdrawal of the guidelines, but an official response to the call from Treasury has not given.