Israel Matzav: Bank Wanted

Thursday, May 04, 2006

Bank Wanted

Get out the world's smallest violin.

The New York Times is reporting this morning that the 'Palestinian Authority' is having trouble finding a bank to transfer money for it. So even if people want to donate to the 'Palestinian Authority' they cannot do so. It seems that the United States government is threatening all kinds of legal problems for anyone who wants to help Hamastan out.

The United States Treasury last month barred almost all financial dealings with the Palestinian Authority in response to Hamas's rise to power, under a federal law that makes it a crime to provide funds to terrorist groups.
That has rattled local banks, which are tied to the American banking system. The banks abruptly stopped handling even basic wire transfers needed for the authority to receive money donated by foreign countries.
In recent weeks Arab countries, coordinated by the Arab League in Cairo, have raised more than $70 million. But so far, Palestinian officials say, no bank has been willing to move the money to the West Bank or the Gaza Strip, wary of legal entanglements with the United States.
Ismail Haniya, the Palestinian prime minister and a leader of Hamas, said Wednesday that the government could begin paying overdue salaries, which are now two months late, if the money reached the Palestinian Authority's bank accounts.
"The problem is not with raising money," Mr. Haniya said at a news conference in Gaza City. "The problem is how to transfer this money to the Palestinians."
Mr. Haniya accused the United States of putting pressure on the banks "so that the money we have collected does not reach citizens or civil servants." Hamas says it will not bow to political pressure from Israel or the West. But without money from abroad, it is not clear how the Palestinian Authority can function.
...
American diplomats say the United States is not directly putting pressure on the banks. But the Treasury has publicized the government's position that Hamas is a terrorist organization and that financial transactions with the Palestinian Authority are barred. There are a few exceptions to the ban, including dealings with the Palestinian Authority president, Mahmoud Abbas, who opposes violence against Israel and supports peace talks.
"Generally speaking, if an organization or individual is facilitating direct fund-raising for Hamas, they open themselves up to action by the United States," said Molly Millerwise, a spokeswoman for the Treasury in Washington.
On Tuesday, Stuart Levey, the under secretary for terrorism and financial intelligence at the Treasury, was in Israel to meet with senior Israeli officials on how to prevent money from reaching designated terrorist groups, the United States Embassy said.
...
The United States government lacks legal jurisdiction over financial transactions abroad if no American citizens or institutions are involved. But many Middle Eastern banks have branches in the United States or have business relationships with American banks to handle international transactions.
Banks here fear they could jeopardize their ties to the United States or put themselves at legal risk if they handle money for the Palestinian Authority, regardless of its origin, said George Abed, governor of the Palestinian Monetary Authority, which effectively serves as the Palestinian central bank.
The Arab Bank, based in Jordan, has held the main account for the Palestinian Authority in recent years. Officials there and at other banks have refused to discuss the issue of transactions for the authority.
But Mr. Abed acknowledged that the Palestinian government and the banks were in an extremely awkward position. "Banks, being careful as they usually are, have been telling the Palestinian Authority that they can't complete these transactions," Mr. Abed said Tuesday in an interview in Ramallah.
The Arab Bank, which has branches in the United States, has been subject to American legal action, including a lawsuit filed in Federal District Court in Brooklyn by about 50 American survivors or relatives of people killed in suicide bombings or other attacks by Hamas.
"No bank wants to risk being cut off from international transactions," Mr. Abed said. "This is oxygen for banks. If you are a bank, and you shut yourself out of the United States and Europe, what are you going to do — conduct all your transactions in rupees?"
Though the banks are wary, Hamas says it will not give in.
One option is to have the Arab League send the donated money directly into the personal bank accounts of Palestinian Authority employees, bypassing the authority. But that may be highly impractical, because money would have to be wired into 165,000 separate bank accounts.
"It is being studied, but it does not sound very feasible," Hesham Youssef, a senior Arab League official, said in a phone interview from Cairo.