The purpose of this report is to provide Congress with an overview of the nature and statusof the designated foreign terrorist organizations list (FTO list), as a potential tool in overseeing theimplementation and effects of U.S. legislation designed as a basis for imposing sanctions onterrorists. The report centers on the list of terrorist groups that are formally designated by theSecretary of State pursuant to section 219 of the Immigration and Nationality Act (8 U.S.C. 1101 et seq . ), as amended under the Antiterrorism and Effective Death Penalty Act of 1996 ( P.L.104-132 ). These groups are often collectively referred to as the "terrorist group list" or "FTO list." The focus here is on the operation and effectiveness of the FTO list as a U.S.counterterrorism tool. The first part of the report provides a background on the process fordesignating a group, as well as the procedure used to remove a group. It describes the administrationof the list and the role of the various Executive agencies involved in maintaining it. (1) Next follows a sectionexplaining the distinctions between the FTO list and other terrorist lists that are maintained by theU.S. government, with an emphasis on both tracing the complicated interplay among the numerouslists and untangling their confusing acronyms. The arguments in favor and against the FTO list arethen discussed, with information about the practicalities of implementing it. The report concludeswith a discussion of potential policy options for Congress, including some of the recently proposedamendments to the legislation that establishes it. The potential issue for Congress is to assess, as part of its oversight responsibility, theeffectiveness of the FTO list in confronting terrorist groups that are a threat to the United States. This report will be updated as events warrant. The 1996 Antiterrorism and Effective Death Penalty Act (AEDPA), which amends section219 of the Immigration and Nationality Act (P.L. 82-414; 8 U.S.C. 1101 et. seq . ), states that theSecretary of State is authorized to designate an organization as a "foreign terrorist organization" ifthree conditions are met: 1. The organization is foreign; 2. The organization engages in terrorist activity; 3. The terrorist activity threatens the security of United States citizens or the nationalsecurity of the United States. (2) If the Secretary of State decides that an organization meets these conditions, he or she may add it tothe terrorist group list at any time by informing Congress and publishing a notice to that effect in the Federal Register . Designations last for two years, at which time they may be renewed. Groups canalso be removed from the list at any time, either by the Secretary of State or by Act of Congress. Thecriteria for removal by the Secretary are general and are subject to interpretation: the Secretary ofState may revoke a designation if he or she finds either that the circumstances that were the basis forthe designation have changed, or that the national security of the United States warrants a revocationof the designation. (3) Designations normally occur after an involved interagency process; but the Secretary of State makesthe ultimate decision. Although the State Department officially designates a group and takes the lead, there are anumber of agencies involved in administering the FTO list. Before the determination, theintelligence community is an important player, because the designation is based upon evidence ofa group's terrorist activity. This often involves classified information and entails assembling anadministrative record that will potentially stand up in court. The intelligence community alsoprovides the information upon which decisions to renew an organization's designation arebased. (4) The JusticeDepartment weighs the legal evidence before the designation is approved, and when renewal is beingconsidered. The Department of Homeland Security is also consulted before designations are made. After the designation, the Treasury Department may block financial transactions involvingan organization's assets and determine whether U.S. banks are complying with the law. The JusticeDepartment determines whether or not to prosecute offenders who violate any aspect of the TreasuryDepartment's sanctions. Judges from the Department of Justice's Executive Office of ImmigrationReview decide immigration cases, with appeals potentially going all the way to the Attorney General. A variety of different agencies in the Department of Homeland Security are then involved in carryingout immigration sanctions, including deportations. Thus, from the perspective of the members of a group, the legal consequences of beingdesignated a foreign terrorist organization are in two general areas: financing and immigration. Under the AEDPA, people who provide funds or other material support to a designated FTO arebreaking the law and may be prosecuted. (5) This applies to both the members of a group and to those who maybe sympathizers. If Treasury imposes sanctions, U.S. financial institutions are required to block thefunds of designated FTOs and their agents and to report that blockage to the Treasury Department. This can have important consequences for a designated terrorist organization's ability to access itsresources. As for immigration, members of designated FTOs can be denied visas or excluded fromentering the United States, and/or they can be deported once they are in the country. The FTO list is not the only so-called "terrorist list" that the U.S. government keeps. (6) There are a number of others,and it is important to clarify the distinctions among them. (7) Probably the best known is the "state-sponsors of terrorism" list, which is pursuant to section6(j) of the Export Administration Act of 1979 ( P.L. 96-72 ; 50 U.S.C. app. 2405(j)(asamended)). (8) Under theterms of the act, the Secretary of State provides Congress with the list of countries that have"repeatedly provided support for acts of international terrorism." There are currently seven stateson the state sponsors of terrorism list: Cuba, Iran, Iraq, Libya, North Korea, Sudan, and Syria. (9) Being on the list subjects acountry to a range of severe U.S. export controls, especially of dual-use technology and militaryweapons. The provision of U.S. foreign aid (except humanitarian assistance) is also prohibited. The state sponsors of terrorism list has been remarkably static since its initiation in 1979,with only two states ever having been removed: South Yemen, which was removed in 1990 whenit effectively ceased to exist, merging with North Yemen to form the current state of Yemen; andIraq, which was removed from the list in1982 (when it was allied with the United States) and wasreturned to the list in 1990 (after its invasion of Kuwait). (10) This list differs from the FTO list, as it is directed specificallytoward states, not substate actors -- like the terrorist groups that the states allegedly support. It alsoderives from different legislation. (11) At least three other important U.S. "terrorist lists" are in use. The "specially designatedterrorists" (SDTs) list was generated pursuant to the International Emergency Economic Powers Act( P.L. 95-223 ; 50 U.S.C. 1701 et seq . ). It was initiated under Presidential Executive Order 12947 on25 January 1995 and was specifically oriented toward persons (individuals and entities) who threatento disrupt the Middle East Peace Process. Later, following the events of September 11, 2001, thePresident invoked the same emergency authorities in Presidential Executive Order 13224, to block"all property and interests in property" of certain designated terrorists and individuals and entitiesmaterially supporting them. (12) This established another, much longer list, known as theSpecially Designated Global Terrorists (SDGTs) list. There are currently over three hundred personsidentified as SDGTs. These two lists are especially targeted toward blocking terrorist financing, andthey do not have an immigration element. The Treasury Department maintains the so-called SDT and SDGT lists, and, unlike the FTOlist, the Secretary of the Treasury takes the lead in adding individuals or organizations to the lists andthen freezing the assets of persons or entities that are on them. The lists have grown to include morethan 200 entities, organizations, and/or individuals. They derive from different legislation and,again, are not the same as the designated FTO list. (13) The SDT, SDGT, state sponsors, and (as of October 2002) FTO lists were placed togetherin a new, larger roster called the "Specially Designated Nationals and Blocked Persons" (SDN) listmaintained by the Office of Foreign Assets Control of the Treasury Department. (14) Although the individuallists retain separateness pursuant to their legislation, this comprehensive SDN list presents in oneplace all of the terrorist entities that are economically sanctioned through having their assets blocked. (It also includes individuals and organizations that are sanctioned by having their assets blocked fornarcotics trafficking and other activities.) There are thus fourteen different sanctions programsincluded in the SDN list, not all of which pertain to terrorists. The list is accessible via the Internetand is frequently updated to reflect the fluid nature of U.S. economic sanctions. (15) There is also the so-called "Terrorist Exclusion List" or "TEL," which is pursuant to Section411 of the USA Patriot Act of 2001 ( P.L. 107-56 ; 8 U.S.C., 1182). It authorizes the Secretary ofState, in consultation with (or at the request of) the Attorney General, to designate terroristorganizations strictly for immigration purposes. Individuals associated with organizations on theTEL list are prevented from entering the United States and/or may be deported if they are alreadyhere.