Palestinian members of the al-Qassam Brigades, the armed wing of the Hamas movement, take part in a gathering on January 31, 2016, in Gaza City to pay tribute to their fellow militants who died after a tunnel collapsed in the Gaza Strip .
Mahmoud Hams | Afp | Getty Images
The US is urgently trying to cut off funding to Palestinian militant organizations Hamas in the wake of the October 7 terrorist attacks, which killed 1,400 Israelis and led to the capture of more than 200 people from Israel.
As part of this effort, as Israel pounds the Gaza Strip with airstrikes, the US Treasury Department’s under secretary for terrorism and financial intelligence met Wednesday with officials in Qatar.
“The US is ready to take unilateral action, but when we are strategically aligned with partners in this region, we have a great chance for success in a faster with greater efficiency,” the official said. Brian Nelson on CNBC in a phone interview shortly after the meeting.
Nelson had a similar message for officials in Saudi Arabia, whom he met with on Tuesday. He would not comment specifically on whom his office might target next, but the Treasury Department indicated more action is on the way.
However, this is a difficult and complex endeavor, given the scope and complexity of Hamas’ funding network.
A week ago, the Treasury’s Office of Foreign Assets Control, commonly known as OFAC, placed sanctions on 10 Hamas-funding institutions from Gaza, the West Bank, Sudan, Turkey, Algeria and Qatar. Officials at the Treasury Department have been investigating these entities for years but didn’t begin until after the brazen attack earlier this month.
“After the previous terror attacks by Hamas you have a huge influx into Hamas from around the world and we want to act urgently to prevent that,” Nelson said, pointing to the new demand from the US
Large funding network of Hamas
US officials say Hamas’ fundraising apparatus is extensive. The group, which controls Gaza, receives much of its money through charitable organizations that sometimes legitimately provide aid to aid civilians and civil projects in Gaza.
“Making the distinction is often hard,” said Juan Zarate, who was the Treasury Department’s first assistant secretary in charge of tracking and eliminating terrorist financing.
Appointed by then-President George W. Bush after the September 11, 2001, terrorist attacks on the US Zarate is now the managing partner at K2 Strategies, where he advises clients, including governments in the Middle East, on everything from financial compliance to cybersecurity.
Speaking of Hamas, Zarate said, “over the years, they have been able to operate under a cloak of legitimacy in some circles while they also govern Gaza,” which has put several governments, including the US, in a position where less. an aggressive urge to follow them.
“Right now, that’s changed,” he said.
Palestinians, who fled their homes due to Israeli strikes, gather to take their share of charity food offered by volunteers amid food shortages, at a UN-run school where they have taken shelter, in Rafah, in the southern Gaza Strip, on October 23. , 2023.
Mahmoud al-Masri | Reuters
As for the US not going after Hamas, Zarate said it was a question of resources, priorities and the assumption that “the Israeli government has it under control.”
Beyond money from charitable organizations, Hamas also raises funds by taxing the citizens of Gaza on goods produced in Gaza and goods imported from outside the strip.
Iran is another major source of funding for Hamas, according to officials at the Treasury and State departments.
Since October 7, Israel’s supporters have urged the US to more closely monitor and curb oil exports from Iran that have been allowed by the current and previous administrations, despite sanctions. China has become the main recipient of Iranian oil exports.
The US government has also been reluctant to cut Iran’s supply out of concern that cutting it off the market would drive up oil prices, hurting the American and global economies.
That’s where the banking system comes in
Once OFAC places an individual or institution on a designated terrorist financing list, it sends a flag to financial institutions around the world, including in the U.S. If a transaction is made in dollars, the path goes through a American bank.
“These additions to the list were made in real time,” according to attorney Gary Osen, who has successfully sued terror financers for aiding Hamas in the past, including Arab Bank, based in Jordan.
When the banking system triggers an alert, it goes to manual review.
“The system has not done enough to block the money going to Hamas, not by a long shot” Osen said. He cited several organizations long suspected of funneling money to Hamas, including Turkey’s IHH Humanitarian Relief Foundation, part of the Union of Good, which the US Treasury Department has designated as a terrorist fundraiser in 2008. The US called it “an organization created by the leadership of Hamas to transfer funds to the terrorist organization.”
But Turkey’s IHH was left untouched, giving it continued access to the American and global banking systems. The organization did not return calls or emails, but its website called on donors to immediately raise funds for medical care, education and other projects “to meet the needs of the people of Gaza.”
“Despite the fact that there is sufficient evidence to list IHH as a financial sponsor of Hamas terrorism, there are likely diplomatic reasons why the US government has not acted, including the organization’s close ties to the Turkish government , a NATO ally,” Osen said. “Governments have many considerations to make and reasons to do nothing.”
Don’t miss these CNBC PRO stories:
