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Israel and the PA continue to drain Hamas’ financial sources

June 11, 2019 at 2:10 am

Hamas celebrate their 31st anniversary in Gaza on 17 December 2018 [Mohammed Asad/Middle East Monitor]

Israel has revealed that in recent years there has been an increase in funds confiscated from Hamas members in the West Bank. These funds come from Gaza and abroad and are used to support those carrying out armed operation and attacks, the families of prisoners, and towards establishing infrastructure for the movement. Hamas’ military wing has made changes in the means it collects donations, using Bitcoins. The movement announced that it was facing a problem in providing funds due to an American-Western-Israeli policy aiming to dry up its sources of funding.

The following lines discuss the financial siege on Hamas and explore the movement’s attempts to overcome it. The article will also look into whether this problem has become so complex that it cannot be resolved and what the new system it has developed is to deliver funds far from any Israeli, American, and Palestinian security detection.

It was surprising that the former political bureau of Hamas, Khaled Meshaal, acknowledged that the movement was suffering a financial crisis. He stressed the existence of a US-Western-Israeli policy aimed at drying Hamas’s sources of funding as a means to break and weaken the movement in the context of adapting the region for the deal of the century. He called for the support of the movement with funds.

Reuters news agency revealed that Hamas is using sophisticated methods to raise money using the Bitcoin currency. This highlights the difficulties facing the Israeli and American authorities in tracking Hamas’s coded currency. This is after the Izzedine al-Qassam Brigades, Hamas’s military wing called for donations via the digital currency.

The information reveals that Hamas has made changes to this mechanism, as its military wing’s website created a new digital wallet for each transaction, making it difficult to monitor all the companies around the world donating to Hamas through the encrypted currencies. Having a different wallet for each donation makes tracking and monitoring more complex.

In coincidence with this, Israeli media outlets have talked about the development of Hamas’s money-laundering means, making them smarter via fake companies, associations, and bank accounts. Moreover, they have been using smartphone apps to make bank transfers without the need to visit banks physically.

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Israel’s security agency, the Shabak, documented the confiscation of about $280,000 since the beginning of the year, from Hamas activists. The seizure took place as a result of the Israeli army carrying out over 40 operations against Hamas’s funds sent from Gaza and from outside Palestine to the movement in the West Bank. This reveals the magnitude of the war waged by the Israeli security agencies against the money smuggling channels used by Hamas from time to time.

Israel has claimed that Palestinians traders buy goods from outside of Palestine and Hamas leaders living in the countries surrounding Palestine pay for them. Then the Palestinian traders in the West Bank and Gaza Strip who bought the goods exported from abroad pay Hamas inside Palestine.

This new method used by Hamas has caused a chronic headache for the Israeli security agencies, as it monitors thousands of trucks loaded with goods that find their way to Gaza and the West Bank annually. This is because a large amount of the funds goes to Hamas organisational institutions, not just the importers and exporters, which mostly form a civil front for Hamas’s financial activities utilising money laundering to increase their financial capabilities.

Israel’s war of confiscating Hamas funding is continuous. In the past, the movement sent tens of millions of dollars to the West Bank through preaching activists working with Zakat and relief organisations. In later years, Israeli security circles have claimed that a union of charities was created, consisting of 50 Islamic funds from the Gulf, Europe, the US, and Turkey, which delivered hundreds of millions of dollars to Hamas organisations in the West Bank and Gaza Strip. This was carried out through commercial companies, financial intermediaries and banks.

Israeli figures reveal that between one year and another, the amount of money sent by Hamas to the West Bank increases. In 2016, Israeli intelligence confiscated about $502,000, while in 2017 and 2018, it confiscated about $614,000 each year. As for the end of March 2019, it confiscated about $126,000.

This is even though the latest Israeli attack on Gaza in early May witnessed the assassination of Hamed Al-Khudari, a Hamas cadre working in the field of financial transfers and money exchange office. Israel had claimed that he was Hamas’s financial channel from outside Palestine to inside.

Former defence minister, Avigdor Lieberman decided to consider the Hamed Exchange Company in Gaza City, managed by Al-Khudari, a terrorist organisation, claiming it was a source of funding for Hamas. This means that pursuing money reaching Hamas is an Israeli priority, as Israel is not only fighting those who made the rockets but those who paid for them too.

During the escalation last March, Israel bombed Al-Multazem Insurance and Investment company in Gaza City, one of the economic institutions established in Gaza after Hamas took control of it in the summer of 2007. It was one of the tributaries of the economic structure of the Gaza Strip, which has been suffering from a gradual decline since the Israeli siege was imposed on Gaza.

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In the 2012 and 2014 wars on Gaza, the Israeli Air Force bombed the National Islamic Bank headquarters, and in 2010, it bombed Al-Barasi Exchange Company in Gaza, repeating this in 2007 and 2008. All of this indicates that Israel’s targeting of these organisations and companies in Gaza is negatively impacting Hamas’s financial capabilities, even if they are not directly related to the movement.

In coincidence to Israel’s actions against Hamas’s financial channels, the Palestinian Authority continues its actions in the same context, through the Palestinian Monetary Authority’s warning to exchange companies in Gaza that it intends to end or reduce its work. In addition to this, it has closed bank accounts for orphan organisations that sponsor 40,000 orphans.

Funds usually arrive in Gaza through manual transfers that do not enter the banking system, because the cadres of the Palestinian organisations are banned from opening bank accounts by Palestinian and Israeli security agencies. The Palestinian Monetary Authority’s measures against these companies will harm 2,000 of its employees and thousands of beneficiaries, as each company averages about 5,000 transfers a month amounting to millions of dollars.

The exchange companies in Gaza move money to and from Gaza smoothly, but after Hamas’s control in Gaza in 2007, many conditions have been imposed on those sending or receiving payment through them. When a customer comes to collect a transfer, they are asked for their ID, mobile number, who the sender is and the nature of their relationship: relative, friend, or work.

The PA adopted a strategy to combat the funding the terrorism to discover the reason for money being transferred between banks, as well as to determine the source of the funds and its beneficiaries. The American State Department confirmed that the PA continues its efforts to combat terrorism, prosecutes those funding it, and criminalises financial support of terrorism. The PA security agencies announced its discovery of financial cells with instructions from Gaza and abroad, transferring thousands to Hamas in the West Bank.

Money transfer companies are under tight and dual monitoring from the Israeli and Palestinian security agencies. The economic department in the Preventive Security Services and Palestinian intelligence agency impose checks on all of the transfers in some areas that are over a thousand dollars to determine their source. These transfers require security approval before they are disbursed.

Since 2015, there has been a problem between the Palestinian charities and PA, as Palestinian banks have been withholding transfers made to these charities and refusing to disburse them. They are claiming that they allegedly belong to Hamas and that they will benefit from the funds. Some Palestinian banks refuges to give charities transfers from donors due to security orders from the PA. This is because the PA wants to punish Gaza and its charities for political reasons.

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The PA’s measures negatively affected the charities, as they are no longer able to provide their usual services. It has also caused tens of thousands of orphan, poor, ill, and disabled sponsorships to end, amounting in millions of dollars monthly. Schools for orphans and the disabled, as well as health centres attended by half a million people a year,  were negatively affected by this, while thousands of university students were deprived of financial aid.

Money is the strong foundation that Hamas builds its government, security, and military plans on, and therefore Israel and the PA’s primary goal is to fight the movement’s economic front. This was manifested at first with its financial and economic blockade on Gaza, followed by mobilising the international community against them by inciting Palestinian banks against them and forcing them to refuse to receive money from Hamas or transfer to the movement. Moreover, they prosecute money exchange companies, dried out the resources of charities associated with Hamas, and finally, directly bombed financial and exchange companies related to the movement.

Consideration of Israel’s and the PA’s targeting of Hamas’s financial and economic sectors indicates that they do not want any financial or economic margin to remain that would allow the movement to develop its social, security, and military capabilities. They also believe that direct economic and financial pressure on Hamas is a strong means to subjugate it to prevent it from making political, security, military, and field gain achievements.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.