Exploring the Extent of Hamas's Financial Network
Hamas is designated as a terrorist organization by several countries, including the United States, the European Union, Canada, Israel, and others
Militants from Izzedine al-Qassam Hamas military wing staged a military parade in Khan Yunis city, located in the southern region of the Gaza Strip, during 2021.
From the luxurious dining spot in Istanbul, the Bosphorus has a breathtaking appearance. This is a popular place among politicians, businessmen, and minor celebrities--as well as those who finance Hamas. A figure upon whom the U.S. has imposed sanctions for supplying the Islamist group discussed his different positions on the board. He commented, "It's ludicrous," with regard to America's accusation, but later accepted, "Now, if you're asking what our personnel do with their own finances, why should I be aware of that?"
Hamas has three major sources of power: its physical strength in Gaza, the reach of its ideologies and its funds. Since the beginning of the Hamas attacks on the 7th of October, Israel has attacked and killed more than 12,000 Palestinians in Gaza in an attempt to decimate the first source of power. With the declared goal of eliminating Hamas, Israel needs to take apart its financial base, which is located outside of Gaza. This financial empire is estimated to be worth over one billion dollars annually and has been created to evade Western sanctions, potentially making it untouchable to Israel and its allies.
The income of Hamas is utilized to finance a variety of purposes, from schoolteachers' paychecks to missiles. On a yearly basis, the movement obtains approximately $360m from import taxes on items imported from the West Bank or Egypt. This is the most accessible way of funding for Israel to choke off. When they evacuated in 2005, they instituted firm controls on the transport of goods and people across the edge. Currently, even the most essential necessities are blocked from entry.
The main source of funding for Hamas's arsenal of weapons and fuel is from foreign sources, which Israeli officials approximate to $750 million per annum. The largest contributor being Iran, with the U.S. estimating that the ayatollahs provide $100 million in military aid to Palestinian Islamist groups. The challenge for those responsible for Hamas's finances is to move the money without violating the sanctions imposed by the United States; during the course of the past month alone, three rounds of restrictions have been put into place targeting those with connections to Hamas.
Dodging United States sanctions requires a certain level of creativity. Millions of dollars are being channeled to Hamas through cryptocurrency markets. Firuze Segzin, an economist from Bilkent University, noted, "It's shocking how much of what is going on in the market is connected to [Hamas]." According to the US Treasury Department, Hamas has smuggled over $20 million through Redin, a currency exchange located in the Fatih district of Istanbul, which is an area with plenty of tourist shops.
Israeli officials estimate that Hamas receives at least $500 million each year from their investments, some of which are entities registered in Middle Eastern countries. These investments are managed by Hamas's investment office and its members are employed by the firms. The US government has stated that the firms donate to charities which then supply funds to Hamas, whereas Turkish authorities allege that profits are taken directly. It is difficult for Western regulators to untangle these revenue streams. For instance, one firm constructed the first shopping mall in Sudan, another extracts minerals in Khartoum and a third erected skyscrapers in Sharjah, UAE. Although some of these companies proudly display their business dealings, they deny any association with Hamas.
In order to cut off the sources of income for Hamas, it is necessary to consider the nations through which the streams of revenue travel. Since Israel detained some of the leading figures of Hamas in 1989, the financial agents of the organization have been living outside the country. Through the years, changing political circumstances have necessitated the relocation of the financial hub of Hamas. As an example, Jordan's close connection with the United States forced Hamas to abandon its original base in Amman.
Politicians of Hamas favour Doha, the capital of Qatar, and its businesses stretch from Algeria to Sudan and the United Arab Emirates. However, its financiers are based in Istanbul. Zaher Jabarin, who Israel accused of managing Hamas’s funding (which he denies) is among the few people sanctioned by the United States for financing the organisation and living there. Recep Tayyip Erdogan, Turkey's president, is trying to increase his regional influence by backing the Palestinian cause and consequently, provides sanctuary. Moreover, Israel claims that the Turkish administration provides passports (which it denies) and let Hamas keep a bureau in the country.
Amidst all this, Turkey's banking system has been helping Hamas to evade U.S. sanctions by engaging in sophisticated transactions around the world. Moreover, the growing, lightly regulated cryptocurrency market also facilitates this process. A number of Turkey's largest banks, including Kuveyt Turk, have been accused by the U.S. and Israel of knowingly keeping Hamas's money. Rumor has it that Mr. Erdogan tacitly approves. In 2021, the Financial Action Task Force (a G7 watchdog) put Turkey on its "grey list" of countries not doing enough to freeze terrorist's assets.
The businessmen affiliated with Hamas are the biggest beneficiaries. One of the group's finance employees stated that the Turkish government's tacit agreement "facilitates business operations". Trend GYO, a company based in Istanbul that has been sanctioned by the US for channeling money to Hamas, obtained an official contract to establish Istanbul Commerce University. Construction companies, which are a major part of the Hamas portfolio, can acquire significant amounts of money without being noticed, and they are often given sizable loans. With this, Turkish authorities are able to assert that they are not directly funding Hamas.
Hamas has been able to stay financially secure despite Israel's attempts to decrease its revenue and savings. Turkey's banks have not been helpful in this endeavor either. Despite America's attempts to levy sanctions, they have not been as effective because the targets can keep money outside of the U.S. banking system. Furthermore, it is difficult to keep track of the organization because it frequently changes its name. This was highlighted by an ex-Treasury official who expressed his frustration with the situation.
It is possible that the financial situation of Hamas might improve as a result of Israel's recent aggression towards Gaza. Western governments may be apprehensive when faced with the humanitarian crisis, and nations that are sympathetic to the Palestinian cause could make it easier for Hamas to gain money. There have been reports for a while now that some civil servants in the Turkish economic ministry are collaborating with Hamas's financial department.
For the state of Israel, having Hamas become stronger financially in spite of the war would be a catastrophe. Possessing its riches and fiscal foundations unharmed, it--or a related organization--could possibly thrive even after the devastation. Gazans, on the other hand, have been plunged into sorrow so that Israel can take out a collective whose funds and authority are securely situated in another place. Contrast their hardship with the scene in Istanbul: savoring lobster and looking at the Bosphorus.
The Economist has investigated the expansive financial realm of Hamas, uncovering its intricate structure. Research has revealed what lies behind the group's monetary management, and the implications it has on the present day.
