Terrorism Financing Blacklists At Risk

But he said the blacklist ought to be expanded rather than curtailed, arguing that it does not reflect al-Qaeda's evolution into a decentralized movement and that it needs to include financiers of affiliated terrorist groups.

"The list is much too short. It is significantly out-of-date," he said. "It's not used as effectively or efficiently as it could be."

A Legal Challenge

The most serious challenge to the U.N. sanctions has been posed by Yassin Abdullah Kadi, a Saudi businessman who had millions of dollars in assets frozen by several countries after he was named to the blacklist in October 2001. Kadi is a co-plaintiff in the lawsuit before the European Court of Justice, which ruled that his right to a fair hearing was violated by E.U. countries enforcing the U.N. list.

Kadi, 53, resides in Jiddah, Saudi Arabia, but has business holdings in Switzerland, Malaysia, Albania, Turkey and other countries. He has denied ever supporting al-Qaeda, financially or otherwise. In December, the Swiss attorney general dropped an inquiry into Kadi's finances after finding no evidence of criminal acts. About $9 million of his assets remain frozen in Switzerland, however, because the United Nations has not removed him from its blacklist, Swiss officials said.

"He's never been given a fair opportunity to challenge this," said Guy Martin, Kadi's London-based attorney. "This is what is so iniquitous: He'd be better off if he was a criminal defendant and subject to the rule of law."

Martin declined to say how many of Kadi's assets remain frozen worldwide. He also declined to speculate why Kadi was named to the blacklist. "We can only assume it was a knee-jerk reaction to the events of 9/11," he said.

The European Court of Justice has given the European Union until December to provide Kadi with an explanation for why he was blacklisted, as well as a mechanism to appeal.

Officials at the European Union's headquarters in Brussels said they were preparing a response but were in an awkward position.

"It would have been better to have this system at the U.N. level, for them to decide," said Gilles de Kerchove, the E.U. counterterrorism coordinator.

Lobbying for a Change

Meanwhile, Switzerland is being sued by Youssef Nada, a 77-year-old Egyptian citizen and Muslim Brotherhood supporter who has been on the U.N. blacklist since 2001.

Nada has taken his case to the European Court of Human Rights in Strasbourg, France. He has accused Switzerland of violating his rights by blocking his assets even though the Swiss federal prosecutor, after a long investigation, found no evidence that he had broken any laws.

As in the Kadi case, Switzerland has said it is compelled to keep Nada's assets frozen because of its legal obligation to the U.N. blacklist, a stance upheld by the Swiss Supreme Court. But Swiss officials said they are worried they could still be held liable by the European Court of Human Rights.