How Hamas skirts sanctions to fund terror opsAugust 8, 2014
Since Western banks won’t work with Hamas, the terrorist organization has developed several methods of accessing cash: trade-based money laundering by getting foreign suppliers to under-invoice them for imports, bulk cash smuggling from Jordan, taking advantage of diplomatic pouch immunity to launder money through consulates, manufacturing counterfeit medicine, and crooked real estate deals.
Excerpts from a recent Worldcrunch article follow:
Financing Hamas: How Cash Gets In The Wrong Hands In Gaza
Tomer Ganon (2014-07-28)
…Smuggling of money by traders is a relatively simple example for the tactics the Hamas leadership has developed to funnel money to the organization in Gaza, the West Bank and inside Israel, as Israeli banks have refused to allow money transactions to and from Gaza fearing it will be used for funding terrorism.
These tactics have become increasingly sophisticated since 2010, a recent report from the Israel Money Laundering and Terror Financing Prohibition Authority (IMPA) found…
Another method for financing terror that IMPA had identified in past years is international commerce. According to one of its studies, terrorist elements have been using various business owners and traders for illicit fund transfers to Gaza.
This tactic, uncovered in 2008, has led to the indictment of two Israeli firms that traded foodstuff and customs representation. This is how it worked: Hamas leadership buys different goods, mostly basic food items, abroad for very low prices or even for free. It then employs straw men to contract a private company to import the goods to Israeli ports and then transfer them to the Palestinian territories. A local distributor, who is in fact a Hamas operative, receives the shipment and later sells the goods. The high revenues, thanks to the large profit margins, then go to terrorists’ coffers.
An additional pattern the IMPA study discovered was the use of accounts owned by diplomatic missions. Financial statements of an unidentified embassy, received by the agency, revealed a large number of transfers from its account to various elements in the Palestinian Authority, including those in Gaza.
An analysis has shown that one beneficiary was an entity suspected in facilitating money transfers to Hamas. IMPA believes the embassy’s transactions were made innocently, in what looked to be legitimate payments, without it being aware it could be aiding terror.
These tactics were identified by IMPA in the course of a review of financial transactions reporting as required by standing regulations. However, authorities are also looking elsewhere, including an emerging source of funding for terrorism in criminal activity, such as drug trade and the manufacture of counterfeit pharmaceuticals — activities that obviously go unreported, and whose extent is unknown.
According to sources in the enforcement authorities, it’s a simple equation. Drugs and fake medicine sold in Israel are often distributed by elements related to terrorist organizations such as Hamas and the Islamic Jihad…
The article doesn’t touch on state sponsorship and weapons supplied to Hamas by Iran and Qatar, which is of course the bigger factor behind Hamas’s operations. But for spare change the above tactics work quite well for Gaza’s terrorists.