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Thursday, April 06, 2006

Cash-strapped Hamas struggles to find bank willing to handle finances

Hamas seems to be having some banking problems....
The new Hamas-led Palestinian government is struggling to find a bank willing to handle its finances, casting doubt on whether it can pay staff or receive foreign aid, Western diplomats and Palestinian officials said.

"You cannot run a government without having a bank," said a Palestinian official familiar with the Palestinian Authority's "single treasury account", where foreign donors deposit funds so the Authority can pay 140,000 workers and cover other expenses.

A Western diplomatic source said Hamas's difficulties in even finding a banker could "disrupt the entire payment system".

Officials of Hamas, which is listed by Washington and the EU as a terrorist organisation and whose charter calls for Israel's destruction, say the banking problem is part of an international campaign against the Islamist group.

A Hamas cabinet minister said on Wednesday the Amman-based Arab Bank, which has long handled the treasury account, had come under pressure from "abroad" to stop working with the Authority now that it was under Hamas control.

No comment was immediately available from the Arab Bank.

As a possible drastic solution, the cabinet minister said Hamas would not object to Palestinian Authority employees opening personal accounts so Arab and European donors could pay their salaries directly, an option some donors were considering.

Western diplomatic sources, speaking on condition of anonymity, said Hamas had been trying to move the Authority's treasury account from the Arab Bank to a local Palestinian bank to try to minimise the risk foreign funds would be frozen.

But the sources said other banks had so far balked at the request, in part because of the Authority's precarious finances and because of fears of a legal backlash from regulators in the United States and Europe.
I'm getting out the world's smallest violin now (I'm having trouble putting the picture in, so I cannot guarantee this will work - I'm having trouble loading it, but the code is there):


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