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| By: Associated Press |
| Published: February 26, 2006 |
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Iranian financial aid to a Hamas-led Palestinian Authority would be tough to stop.
But Israel - which once raided Palestinian banks to confiscate millions it said were meant for militants - has vowed to stem it, possibly by persuading the world to deem the new Palestinian government a terrorist organization.
Iran, which like Hamas, favors Israel's destruction, is poised to significantly increase the amount of money it sends to the Palestinians in the face of a threatened cutoff in Western aid. For now, it appears Tehran could do so legally, because it would involve money transfers between two legal entities, banking officials say.
With international aid to the Palestinians currently totaling around $1 billion a year, it's not likely Iran would have the money or the ability to make a significant dent in the shortfall. But If Iran is joined by other Muslim nations, in addition to countries such as Venezuela from whom Hamas might seek help, any plan to financially isolate Hamas could be in trouble.
During a trip to Tehran this week by Hamas political leader Khaled Mashaal, Iran offered to help the Palestinians compensate for any Western aid cut following Hamas' Jan. 25 victory in parliamentary elections.
International banks that do business in both Iran and the Palestinian territories would be able to secretly transfer large sums of money from the Iranian Finance Ministry to the Palestinian Authority, because neither of them has been the target of international sanctions or declared illegal by the U.N. Security Council, banking officials said.
That means the transfers would not be subject to the anti-terror financing regulations worked out after the 9/11 attacks in the U.S., which prohibit the international transfer of funds to terrorist organizations. However, banks that handle the transfers, if exposed, could face lawsuits, boycotts and other pressure from those opposed to financing Hamas.
Israel argues that once Hamas takes over the Palestinian Authority - which is expected to happen within weeks - the world has the right to treat the authority as a terror group and deny it funds.
"If a terrorist organization takes over the machinery of government, do you not have the legal option to try to give the political body taken over by a terrorist group the status of a terrorist organization?" asked Mark Regev, the Israeli Foreign Ministry spokesman.
Money is the international community's most important tool in trying to persuade Hamas to renounce its violent ideology, recognize Israel and respect past peace accords. After five years of fighting devastated their economy, the Palestinians depend on foreign largesse to make ends meet.
Israel has already blocked about $50 million a month in customs and tax receipts collected on behalf of the Palestinian Authority. And the United States and the European Union have threatened to cut off all non-humanitarian aid once Hamas takes power.
Israeli intelligence officials estimate that Iran is already giving Hamas about $10 million a year. Most of that money comes in through surreptitious back channels, including cash-filled suitcases and wire transfers from "charities" used as fronts.
But if Ali Larijani, secretary of Iran's Supreme National Security Council, is serious about the promise he made to Mashaal this week in Tehran about funding the new Hamas government, the sheer magnitude of the sums involved would force Iran to use electronic transfers, not suitcases.
U.S. banks would almost certainly not be involved in such transfers because of Washington's ostracism of Iran. European and Japanese banks would also likely face intense pressure to stay away, especially in the midst of a Western aid boycott of the Palestinian Authority.
But Arab banks that do business in both Iran and the Palestinian territories, and which have dollar or euro holdings outside Europe and the United States, could handle the Iranian transfers, Palestinian monetary officials and a senior Israeli banker said.
Banking regulations prohibit the receiving bank from disclosing the identity of the originating bank. But Ephraim Kam, a former senior Israeli intelligence officer, predicted Israel would be able identify at least some of the banks involved and could enlist international pressure on them to stop.
"I assume that the Israeli government would be able to stop part of this flow of money but part of it will reach the Hamas," he said.
Israel has experience in stemming the flow of funds to organizations it considers hostile, including a shocking episode two years ago in which Israeli troops burst into three banks in the West Bank city of Ramallah, corralled the employees, covered security cameras and confiscated around $7 million in cash from bank vaults.
At the time, Israel said the seized cash corresponded to amounts of money found in accounts with suspected links to Hamas and another militant group, Islamic Jihad.
Israeli officials are still figuring out how they will respond if Iran makes good on its promise to fund a Hamas government. Israeli concerns about Iran have been heightened in recent months by Iranian President Mahmoud Ahmadinejad's calls to wipe Israel "off the map" and his characterization of the Holocaust as a "myth."
The Israeli foreign ministry's Regev said he doubted Iran could "move in to replace the entire international community" and said Israel has "legal options to prevent that money from flowing."
Mashaal has been touring Iran and other Muslim countries to build support for Hamas. He said he has accepted a recent invitation to visit Venezuela, the oil-rich South American nation ruled by the fiercely anti-American Hugo Chavez. The Hamas leader is also expected to visit Russia next week, though that country is not expected to break with the West on the financing issue.
Several Palestinian officials expressed doubt that Iran and the Arab countries could come even close to compensating for a cutoff in Western aid. Lawmaker Saeb Erekat recalled a series of promises from Arab nations to provide the Palestinian Authority with tens of millions of dollars.
"Unfortunately, this has not materialized," he said. |
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