The United States is increasingly using its financial power to target political organisations beyond its borders, with consequences extending far into Europe. Under the banner of counterterrorism, US sanctions can effectively cut activists and organisations off from banking services, digital infrastructure, and the financial resources needed to operate, even when European authorities have not designated them as terrorist groups.

The case of Autistici/Inventati (A/I), an Italian digital network providing services to antifascist and anticapitalist organisations, illustrates how this works.

On 26 August 2026, the Trump administration sanctioned A/I alongside the British activist group Palestine Action and the transnational Palestinian organisation Masar Badil. Washington accused them of supporting terrorism, as part of a broader campaign against what it describes as violent far-left extremism.

A/I was designated a Specially Designated Global Terrorist by the US Treasury, which accused it of providing digital infrastructure and services to violent extremist organisations. The collective rejected the accusations, insisting that its work consisted of providing secure communications and digital services to political movements.

Yet the US decision's consequences were felt almost immediately in Italy.

A/I's bank, Banca Etica, suspended operations on its account because of the potential risks associated with US sanctions. The collective also reported disruptions to its website and payment services, eventually announcing that it would dissolve and wind down its activities.

The episode raises a troubling question: how can a decision taken in Washington effectively undermine the operations of organisations based in Europe, without any equivalent decision by European authorities?

Instruments of political pressure

For the European Legal Support Centre (ELSC), an organisation providing legal assistance to individuals and groups mobilising for Palestine, A/I's experience represents a dangerous precedent "that puts the very notion of Europe at risk.”

The case's significance extends beyond A/I itself. It exposes how international financial networks, banking compliance requirements and the threat of US penalties can become instruments of political pressure across national borders.

The US government argues that its sanctions target organisations providing support for terrorism, including violent attacks and damage to property. But the expanding use of counterterrorism measures against activist networks also raises questions about where political dissent ends, and terrorism begins, and who has the power to decide.

The very label of “terrorist” carries a long history of political use - which dates back to the British Empire - and appears to be applied selectively. The legal distinctions matter. A US sanctions designation is not a criminal conviction, nor does it automatically make an organisation illegal under European law. Nevertheless, the practical consequences can be devastating.

For banks and financial institutions that depend on access to USA financial networks, the risk of maintaining relations with a sanctioned organisation may simply be considered too great. This creates a system in which European organisations can face financial and social exclusion because of decisions made by a foreign government, even without direct legal orders from their own authorities.

The case of Mohammad Hannoun, a Palestinian activist based in Italy, demonstrates another dimension of this pressure. Hannoun faced restrictions on his banking activities before the US government sanctioned him in October 2024 over allegations relating to Hamas financing. Italian authorities subsequently detained him amid criminal proceedings alleging he funded the group.

Hannoun's case involves separate criminal allegations and judicial proceedings, which should not be confused with the sanctions themselves. Nevertheless, it illustrates how financial restrictions, political accusations and legal proceedings can intersect.

These developments reflect a wider system in which state authorities, banks, media organisations, universities, cultural venues, and lawfare groups can collectively contribute to isolating individuals, groups, and networks accused of supporting terrorism.

The impact on solidarity efforts

The implications are particularly concerning for activists and organisations supporting Palestine, whose activities have faced increasing scrutiny and restrictions in several European countries. In Britain, Palestine Action was proscribed as a terrorist organisation in July 2025 following its direct-action campaign against companies connected to Israel's defence industry. The group has challenged the ban in court, with the UK Supreme Court due to hear an appeal in November 2026.

The subsequent US designation of Palestine Action illustrates how one government's measures can be reinforced by another, potentially multiplying their impact on the organisations concerned.

But the A/I case points to something further: extending such measures to organisations that provide services and infrastructure used by political movements.

The question is whether European institutions have either the tools or the political willingness to challenge this expanding extraterritorial reach.

The European Union does possess a legal mechanism intended to protect European individuals and businesses against certain foreign sanctions: the Blocking Statute, introduced under Council Regulation (EC) No 2271/96. Originally adopted in 1996, the statute was designed to counter the effects of US sanctions on European economic operators. It was subsequently updated in 2018 in response to the reimposition of US sanctions against Iran.

The legislation can prohibit compliance with specified foreign sanctions and provide legal remedies to affected European operators. However, it applies only to the foreign legislation covered by its annex, which currently includes certain US measures concerning Cuba and Iran. It does not automatically protect organisations targeted under the US counterterrorism sanctions regime.

Extending or adapting such protections would require further action by European institutions, and would not necessarily eliminate the financial risks facing European banks.

Nevertheless, this legal mechanism shows that the EU has previously recognised the problem posed by the extraterritorial application of US sanctions.

As the ELSC pointed out: "We have this European law, but it has never been used on the scale required to counter the US sanctions."

The consequences of inaction are not merely financial. When an organisation loses access to its bank accounts, online services or funding channels, its ability to operate can rapidly disappear. The threat of sanctions can also discourage other organisations, financial institutions, and individuals from associating with it, even before any formal restrictions are imposed.

"The aim of the US sanctions is to isolate and fragment the European political movement for Palestine," the ELSC argued. "A sanctioned person will be concerned about how to recover funds instead of doing their work."

These chilling effects are difficult to measure, but they are central to understanding the wider implications of the sanctions regime. In the A/I case, the collective's decision to dissolve shows how legal uncertainty, financial pressure, and risk to associated individuals can make the situation unsustainable.

The European Union frequently presents itself as a defender of civil liberties, the rule of law and political freedoms. Yet these commitments face a practical test when European organisations are subjected to financial restrictions originating outside their own legal system.

The question is not whether organisations accused of terrorism should be exempt from scrutiny. Rather, the question is whether European institutions should allow foreign sanctions decisions, and the financial pressure they generate, to determine whether organisations operating within Europe can survive.

If the consequences of a US designation can effectively shut down a European organisation without an equivalent decision under European law, the boundary between US financial power and European political sovereignty becomes increasingly difficult to distinguish.

For European civil society, that boundary may be far more important than it first appears.

Matteo Chiani is a freelance journalist based in Italy who specialises in environmental reporting and investigative journalism. His academic background includes postcolonial and media studies, Mediterranean culture, and the history of Arab countries.

Follow Matteo on Instagram: @mattechiani

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Opinions expressed in this article remain those of the author and do not necessarily represent those of The New Arab, its editorial board or staff.