Prosecuting extortion victims: How counter‐terrorist finance measure Executive Order 13224 is going too far

Abstract

Purpose

The purpose of this paper is to explore the effects of USA Executive Order 13224, one of the most important US counter‐terrorist finance measures, on corporations operating in countries with designated terrorist organizations.

Design/methodology/approach

The effects of Executive Order 13224 are focused on the case of Chiquita Brands International, a major US banana‐exporting corporation that operated in Uraba, Colombia until 2004. The US Government prosecuted Chiquita for “engaging in transactions” with an illicit, Colombian paramilitary group considered by the US a Foreign Terrorist Organization and as a specially‐designated global terrorist. This paper presents the duress defense that Chiquita could have raised at trial under US federal law.

Findings

Executive Order 13224 was drafted hastily and under pressure leading to over‐inclusive language and over‐broad implementation. Chiquita's case suggests that Executive Order 13224, drafted with the intention of reducing terrorist funding, has made it possible for an extortion victim to be prosecuted for payments it has not chosen to make. This paper will suggest narrowly tailoring the language of Executive Order 13224 or providing an exculpatory provision.

Research limitations/implications

Counter‐terrorist finance measure Executive Order 13224 has not been sufficiently examined by scholars. Research on this topic should go hand in hand with enquiry into possible defenses for corporations operating in countries with designated terrorist organizations and having to make extortion payments.

Practical implications

Suggestions are put forward for corporations operating in countries with designated terrorist organizations as well as for drafters of counter‐finance terrorist measures.

Originality/value

Although the designation of terrorist organizations under the executive order has been discussed, few scholars have addressed cases of over‐broad application of the executive order. The unexamined case of Chiquita is a unique case in that the extortion victim, and not the extortion perpetrator, is prosecuted. Also, Chiquita was prosecuted for an activity (making extortion payments to the Autodefensas Unidas Campesinas that became a crime after Chiquita began its engagement with such an activity. Furthermore, examining this case thoroughly is important because it has repercussions on at least two public policy levels: the US' War on terrorism and the rights and remedies of corporations investing in countries with designated terrorist organizations.

Citation

Ferrer, M. (2009), "Prosecuting extortion victims: How counter‐terrorist finance measure Executive Order 13224 is going too far", Journal of Financial Crime, Vol. 16 No. 3, pp. 262-288. https://doi.org/10.1108/13590790910973106