The United States Treasury imposed sanctions on a Tamil foundation in Maryland, accusing it of being part of a support network for the Liberation Tigers of Tamil Eelam (LTTE).
In recent weeks thousands of American Tamils have participated in protests across the United States denouncing the killing of Tamil civilians by Sri Lankan forces and demanding an immediate ceasefire.
Tamil political observers see the US government’s move as being aimed at frightening the Tamil Diaspora and curbing their political activities.
The sanctions against the Tamil Foundation, which Treasury said was a front for the Sri Lanka-based Liberation Tigers of Tamil Eelam, allows the U.S. government to freeze assets the foundation may have in the United States and prohibits U.S. banks and consumers from conducting business deals with it.
"The LTTE, like other terrorist groups, has relied on so-called charities to raise funds and advance its violent aims," said Adam Szubin, director of the Treasury's Office of Foreign Assets Control.
The head of the Tamil Foundation is also president of the Tamils Rehabilitation Organization in the United States, which was named in 2007 as a terrorist support group under a White House executive order.
Over the course of many years, the Tamil Foundation and TRO have co-mingled funds and carried out coordinated financial actions, Treasury said. Additional information links the Tamil Foundation to the TRO through a matching gift program, the department said.
In the US, TRO has raised funds for the LTTE through a network of individual representatives the organisation is the preferred means for sending funds from the US to the LTTE in Sri Lanka, the department claimed.
The US Department of State designated the LTTE a Foreign Terrorist Organisation on October 8, 1997 and named it an SDGT on November 2, 2001.