Banks hesitant about sending funds to Hamas government
RAMALLAH, April 23: Under US pressure, regional and international banks are balking at transferring funds from donors to the Hamas-led Palestinian Authority, western diplomats and Palestinian officials said on Saturday.
US officials have said the Bush administration could take action against financial institutions that help provide money or services directly to the new government. As the United States has designated Hamas a ‘terrorist’ organisation, such actions could be in breach of US law.
Washington has been spearheading a campaign with Israel to isolate Hamas, which won elections in January and took control of the Palestinian Authority late last month.
US officials would not discuss any specific communications with banks regarding the Hamas, whose charter calls for Israel’s destruction.
But without commenting specifically on any US or foreign banks, US Treasury Department spokeswoman Molly Millerwise said: “If an organisation or individual is facilitating direct fund-raising for Hamas, they open themselves up to action by the United States.”
Nabil Amr, a top adviser to Palestinian President Mahmoud Abbas, said: “There are warnings to the banks in order not to deal with the money coming to the Palestinian people and the Palestinian Authority.”
Banks in the region rely heavily on ‘correspondent’ financial institutions in the US to conduct day-to-day transactions.
Palestinian officials said these regional banks were concerned Washington would put pressure on Wall Street banks to sever these correspondent ties if they helped transfer funds to the Palestinian Authority.
These US banks include JP Morgan, Citibank, Bank of New York, American Express, among others.
HAMAS APPEALS FOR FUNDS: Shunned by the West and increasingly strapped for cash, Hamas has made urgent appeals in recent days to Iran and Arab donors to deposit funds in bank accounts in Egypt. The government is already three weeks late paying salaries to 165,000 government workers.
Mr Amr said the problem was bringing funds into the West Bank and Gaza from Egypt. Qatar and Iran have donated $50 million each.
One of the Egyptian accounts was set up by the Arab League at the Misr International Bank, which French bank Societe Generale gained control of last year.
A Palestinian bank regulator said: “It is normal to think twice because (doing business with Hamas) will make difficulties for them in conducting certain functions.”
Hassan Abu Libdeh, the chairman of the board of the Palestine Stock Exchange, told reporters in Ramallah that he was in consultations with major Palestinian companies and a foreign investor about creating a $100 million fund that could be used to buy or sell stocks to reduce market volatility.
The market capitalisation of the Palestinian stock market has dropped 37 percent since Hamas won elections in January.
Hamas officials say the United States triggered the crisis by pressuring the Arab Bank to freeze the Palestinian Authority’s main treasury account.—Reuters
