In the wake of the October 7 attack on Israel by members of the Palestinian militant group Hamas, the U.S. Treasury Department on Wednesday broadened the financial sanctions already in place against the Gaza-based organization.
The new sanctions were announced by Treasury’s Office of Foreign Assets Control and affect nine individuals the agency identified as “key Hamas terrorist group members, operatives, and financial facilitators.”
Also sanctioned was a Gaza-based cryptocurrency exchange. In addition to several Gaza-based Hamas members, the order names individuals from Sudan, Turkey, Algeria and Qatar.
The order states that several of the individuals named are managers of a “secret Hamas investment portfolio” that provides funding for the group’s activities.
While viewed by some in the region as a legitimate political entity, the United States and the European Union have long considered Hamas to be a terrorist organization. The U.S. first labeled Hamas a terrorist group in 1997. Since 2001, the organization has been on the U.S. list of Specially Designated Global Terrorists.
The inclusion of individuals from Turkey and Qatar is significant because both countries have extensive and longstanding security ties to the U.S.
Compliance likely
“The practical effect of this is that it makes it almost impossible for these individuals and entities to interact with the U.S. financial system, and by virtue of that, with much of the global financial system,” Alex Zerden told VOA. He is a former Treasury Department official who worked on anti-money laundering and terrorism finance issues.
U.S. financial sanctions have extremely broad reach for a number of reasons, one of which is the global dominance of the U.S. financial services industry. A large percentage of transactions between entities outside the United States still involve U.S. banks and payments systems, meaning that non-U.S. financial institutions can be effectively cut off from global commerce if they do business with OFAC-sanctioned entities.
Zerden, now the CEO of Capitol Peak Strategies, said that even though some governments in the Middle East consider Hamas a legitimate political entity, the banks in their countries are still likely to observe OFAC’s sanctions on the organization for fear of losing the ability to transact with U.S. banks.
“Sanctions are sanctions for the purposes of compliance. So, irrespective of the political views of certain jurisdictions, banks seeking to access the U.S. financial system will likely inevitably comply with these sanctions,” Zerden said.
Biden in Israel
The sanctions were announced while President Joe Biden was in Israel to meet with Prime Minister Benjamin Netanyahu about the October 7 Hamas attack on the Jewish state and the subsequent Israeli artillery and airstrikes on the Hamas-governed Gaza Strip.
Treasury Secretary Janet Yellen said in a statement, "The United States is taking swift and decisive action to target Hamas’s financiers and facilitators following its brutal and unconscionable massacre of Israeli civilians, including children."
"We will continue to take all steps necessary to deny Hamas terrorists the ability to raise and use funds to carry out atrocities and terrorize the people of Israel," Yellen added.
Secretary of State Antony Blinken, who has been criss-crossing the region for the past week in an effort to galvanize support for Israel, said in a statement, “Today’s actions are directed at Hamas terrorists and their support network, not Palestinians.
“Hamas alone is responsible for the carnage its militants have inflicted on the people of Israel, and it should immediately release all hostages in its custody. The United States will not relent in using all the tools at our disposal to disrupt Hamas terrorist activity.”
Hamas investment portfolio
Among those sanctioned on Wednesday were six individuals who the U.S. said help to manage a portfolio of companies that Hamas secretly owns.
“In addition to the funds Hamas receives from Iran, its global portfolio of investments generates vast sums of revenue through its assets, estimated to be worth hundreds of millions of dollars, with companies operating in Sudan, Algeria, Türkiye, the United Arab Emirates, and other countries,” the U.S. alleged.
The network is managed by people at the “highest level” of Hamas, Treasury said, and “has allowed Hamas senior officials to live in luxury while ordinary Palestinians in Gaza struggle in harsh living and economic conditions.”
The announcement also named Buy Cash Money and Money Transfer Company, a Gaza-based company that offers money transfer services and allows people to trade cryptocurrencies such as Bitcoin. Officials have long been concerned about the ability of terrorists and criminal organizations to use cryptocurrencies to obscure the sources of their funding.
Iran sanctions
Also on Wednesday, the U.S. announced new sanctions aimed at companies and individuals that support Iran’s ballistic missile and aerial drone manufacturing programs.
OFAC sanctioned 11 individuals, eight companies and one cargo ship for “enabling Iran’s destabilizing ballistic missile and unmanned aerial vehicle (UAV) programs.” The targets of the sanctions were spread across Iran, Hong Kong, China and Venezuela.
“Iran’s reckless choice to continue its proliferation of destructive UAVs and other weapons prolongs numerous conflicts in regions around the world,” Brian E. Nelson, Treasury undersecretary for terrorism and financial intelligence, said in a statement.
Iran is well known as a supporter and financial benefactor of Hamas. Efforts by the U.S. and Israel to prevent the current conflict in Gaza from expanding have involved direct and indirect warnings to Iran not to get involved.
However, the announcement of the Iran-related sanctions did not contain any mention of Israel or Gaza.
