Designation of a terrorist group as an FTO allows the United States to  impose certain legal consequences on the FTO, as well as on individuals  that associate with or knowingly provide support to the designated  organization. 13,224 requires the  blocking of property and interests in property of foreign persons the  Secretary of State has determined, in consultation with the Attorney  General and the Secretaries of the Departments of Homeland Security  and the Treasury, to have committed or to pose a significant risk of  committing acts of terrorism that threaten the security of U.S. nationals or  the national security, foreign policy, or economy of the United States. State Uses a Six-Step Process for Designating Foreign Terrorist Organizations

State has developed a six-step process for designating foreign terrorist  organizations. State’s Bureau of Counterterrorism (CT) leads the  designation process for State, and other State bureaus and agency  partners are involved in the various steps. While the number of FTO  designations has varied annually since the first 20 FTOs were designated  in 1997, as of December 31, 2014, 59 organizations were designated as  FTOs. FTO designation activities are led by CT, which monitors the activities of  terrorist groups around the world to identify potential targets for  designation. CT  also considers recommendations from other State bureaus, federal  agencies, and foreign partners, among others, and selects potential target  organizations for designation. After selecting a target  organization for possible designation, State uses a six-step process it has  developed to designate a group as an FTO (see fig. 1). State Considered Input from Other Agencies in All FTO Designations between 2012 and 2014

According to State officials and our review of agency documents, State  considered information and input provided by other State bureaus and  federal agencies for all 13 designations made between 2012 and 2014. During our review of the 13 FTO designations between 2012 and 2014,  officials from the Departments of Defense, Homeland Security, Justice,  and the Treasury, and the Office of the Director of National Intelligence  (ODNI) reported that State considered their input when making  designations. Agencies Impose a Variety of Consequences on Designated FTOs and Associated Individuals

The U.S. government penalizes designated FTOs through three key  consequences. Third, FTO designation imposes immigration restrictions upon members  of the organization and individuals that knowingly provide material  support or resources to the designated organization. We report on (1) the process for designating  FTOs, (2) the extent to which the State considers input from other  agencies during the FTO designation process, and (3) the consequences  that U.S. agencies impose as a result of an FTO designation. To assess the extent to which State considered information from other  agencies in the designation process, we interviewed officials from the  Departments of Defense, Homeland Security, Justice, State, and the  Treasury, as well as officials from the intelligence community, to  determine when information is provided to State on organizations  considered for FTO designation, as well as the nature of that information. 7.
Why GAO Did This Study

The Secretary of State, in consultation with the Secretary of the Treasury and the Attorney General, has the authority to designate a foreign organization as an FTO. Designation allows the United States to impose legal consequences on the FTO or on individuals who support the FTO. As of June 1, 2015, 59 organizations were designated as FTOs.
GAO was asked to review the FTO designation process. This report provides information on the process by which the Secretary of State designates FTOs. Specifically, this report addresses (1) the process for designating FTOs, (2) the extent to which the Department of State considers input from other agencies during the FTO designation process, and (3) the consequences that U.S. agencies impose as a result of an FTO designation.
To address these objectives, GAO reviewed and analyzed agency documents and data, and interviewed officials from Departments of Defense, Homeland Security, Justice, State, and the Treasury, as well as the intelligence community.
Separately, GAO also reviewed the duration of the designation process for FTOs designated between 2012 and 2014. That information was published in April 2015 in a report for official use only.
GAO is not making recommendations in this report.

What GAO Found

The Department of State (State) has developed a six-step process for designating foreign terrorist organizations (FTO) that involves other State bureaus and agency partners in the various steps. State's Bureau of Counterterrorism (CT) leads the designation process for State. CT monitors terrorist activity to identify potential targets for designation and also considers recommendations for potential targets from other State bureaus, federal agencies, and foreign partners. After selecting a target, State follows a six-step process to designate a group as an FTO, including steps to consult with partners and draft supporting documents. During this process, federal agencies and State bureaus, citing law enforcement, diplomatic, or intelligence concerns, can place a “hold” on a potential designation, which, until resolved, prevents the designation of the organization. The number of FTO designations has varied annually since 1997, when 20 FTOs were designated. As of December 31, 2014, 59 organizations were designated as FTOs, with 13 FTO designations occurring between 2012 and 2014.
State considered input provided by other State bureaus and federal agencies for all 13 of the FTO designations made between 2012 and 2014, according to officials from the Departments of Defense, Homeland Security, Justice, State, and the Treasury, and the Office of the Director of National Intelligence, and GAO review of agency documents. For example, State used intelligence agencies' information on terrorist organizations and activities to support the designations.
U.S. agencies reported enforcing FTO designations through three key legal consequences—blocking assets, prosecuting individuals, and imposing immigration restrictions—that target FTOs, their members, and individuals that provide support to those organizations. The restrictions and penalties that agencies reported imposing vary widely. For example, as of 2013, Treasury has blocked about $22 million in assets relating to 7 of 59 designated FTOs.