U.S., UK, and Australia Target Additional Hamas Financial Networks and Facilitators of Virtual Currency Transfers (2024)

WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed a fifth round of sanctions on Hamas since the October 7 terrorist attack on Israel. Today’s action targets networks of Hamas-affiliated financial exchanges in Gaza, their owners, and associates, and particularly financial facilitators that have played key roles infunds transfers, including cryptocurrency transfers, from the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) to Hamas and Palestinian Islamic Jihad (PIJ) in Gaza. Concurrent with OFAC’s designations, the United Kingdom and Australia are also placing sanctions on key Hamas officials and facilitators.

“Hamas has sought to leverage a variety of financial transfer mechanisms, including the exploitation of cryptocurrency, to channel funds to support the group’s terrorist activities,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “Treasury, in close coordination with our allies and partners, will continue to leverage our authorities to target Hamas, its financiers, and its international financial infrastructure.”

This action builds on OFAC’s recent joint designations with the United Kingdom onDecember13 andNovember 14, targeting Hamas leaders and financiers; as well as U.S. actions onOctober 27, targeting sources of Hamas support and financing;October 18, targeting Hamas operatives and financial facilitators; andMay 2022, designating officials and companies involved in managing Hamas’s secret international investment portfolio. Individuals and entities targeted today are being designated pursuant to Executive Order (E.O.) 13224, as amended, which targets terrorist groups and their supporters.

SHAMLAKH NETWORK

Over the last several years, members of the Shamlakh family have become the main end point for funds transferred from the IRGC-QF to Hamas and PIJ in Gaza. Gaza-based financial facilitator Zuhair Shamlakh (Zuhair) is a Gaza-based moneychanger who facilitates funds transfers in the tens of millions of dollars from Iran to Hamas. Zuhair has used his companies Al-Markaziya Li-Siarafa (Al-Markaziya) and Arab China Trading Company to channel funds for the Izz al-Din al Qassam Brigades (al-Qassam Brigades), the military wing of Hamas. Zuhair has been facilitating funds transfers to terrorist groups in Gaza since at least 2017, when he worked withMuhammad Kamal al-Ayy to coordinate the transfer of millions from Lebanon to Gaza. Al-Ayy was designated in August 2019 for providing financial, material, technological support, financial or other services to or in support of Hamas.

Gaza- and Türkiye-based Al-Markaziya is owned by Zuhair and managed by his family members. Formerly known as Al-Mutahadun for Exchange, it has been directly involved in facilitating tens of millions of dollars from IRGC-QF to Hamas and PIJ. In April 2023, the Israeli Defense Ministry’s National Bureau for Counter Terror Financing (NBCTF) seized 189 cryptocurrency accounts associated with three Palestinian currency exchanges, one of which was Al-Markaziya. Arab China Trading Companyis also based in Gaza and Türkiye and is owned by Zuhair. Israel designated both Arab China Trading Company and Al-Markaziya for their support to Hamas.

Gaza-based financial facilitators Ahmed Shamlakh (Ahmed), Alaa Shamlakh (Alaa), and Imad Shamlakh(Imad), serve as key players in the financial flow from Iran to Hamas and PIJ using their ties to money changing companies, including Al-Markaziya. Ahmed is one of the owners or directors of Al-Markaziya and Alaa is the sole employee and officer of Al-Markaziya’s branch in Türkiye. Both Ahmed and Alaa have been involved in transferring money to Hamas. Imad has directly facilitated the transfer of Chinese yuan from bank accounts in China to accounts controlled by Hamas in Gaza. Imad has also faciliated multiple transfers, worth approximately 50,000 Chinese yuan, to accounts in China likely for the benefit of Hamas. Additionally, Imad has smuggled cash from Egypt to Gaza on behalf of the Islamic State of Iraq and Syria in the Sinai (ISIS-Sinai).

Zuhair Shamlakh,Ahmed Shamlakh, Alaa Shamlakh, and Imad Shamlakh are being designated pursuant to E.O.13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or good or services to Hamas.

Al-Markaziya and Arab China Trading Company are being designated pursuant to E.O.13224, as amended, for being owned, controlled or directed by Zuhair Shamlakh.

HERZALLAH NETWORK

Hamas has used multiple methods of illicitly transferring funds to the West Bank from Gaza in order to fund and support recruitment and the purchase of weapons there. Hamas has directly co-opted and utilized some corrupt money exchanges in both the West Bank and Gaza to launder funds for the terrorist group. Since at least 2020, Hamas has also used cryptocurrency to transfer some funding in support of operational costs in the West Bank as a means of mitigating the risks of physically moving cash, circumventing border crossings, and evading monitoring by authorities.

Gaza-based Herzallah Exchange and General Trading Company LLC (Herzallah Exchange) has worked with Hamas to facilitate transactions, including through the use of cryptocurrencies. Herzallah Exchange has laundered money for Hamas, as well as for PIJ. Herzallah Exchange is owned by Muhammad Fallah Kamil Hirzallah (Muhammad Fallah), Na’im Kamil Raghib Hirzallah, and Salah Kamil Raghib Hirzallah(Salah). Muhammad Fallah has facilitated the transfer of cash while Salah acts as the financial manager of Herzallah Exchange which is a primary money launderer for Hamas.

Gaza-based Samir Herzallah and Brothers For Money Exchange and Remittances(Samir Exchange) has also worked with Hamas to facilitate money transfers for the group. Samir Exchange has facilitated millions of dollars worth of funds transfers from around the region for Hamas since at least 2014. Samir ‘Abd Al-Mu’in ‘Abd Hirzallah(Samir Hirzallah) is the manager of Samir Exchange and has publicly represented Samir Exchange.

Gaza-based financial facilitator Thair Abd Al Raziq Shukri Hirzallah (Thair Hirzallah) has previously coordinated transfers of millions of dollars to Türkiye, and has handled financial transactions for both Hamas and PIJ. Thair Hirzallah has worked with Gaza-based money exchanger Muhammad Kamal al-Ayy and Hamas financial officialFawaz Mahmud Ali Nasser. Fawaz Mahmud Ali Nasser was designated in August 2019 for providing financial, material, technological support, financial or other services to or in support of Hamas.

Herzallah Exchange, Muhammad Fallah Kamil Hirzallah, Na’im Kamil Raghib Hirzallah, Salah Kamil Raghib Hirzallah, Samir Exchange, Smir Hirzallah, and Thair Hirzallahare being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or good or services to Hamas.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.

In addition, non-U.S. financial institutions and other persons that engage in certain transactions or activities with sanctioned entities and individuals may expose themselves to sanctions risk or be subject to an enforcement action. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person.

The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer toOFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request forremoval from an OFAC sanctions list, please click here.

Treasury remains committed to enabling the flow of legitimate humanitarian assistance supporting the basic human needs ofvulnerable populations, while continuing to deny resources to malicious actors. Accordingly, OFAC sanctions programs containprovisions for legitimate humanitarian support to vulnerable populations,including authorizations for certain humanitarian transactions in support of nongovernmental organizations’ activities. For more information, please reviewrelevant authorizations and guidance onOFAC’s website. On November 14, 2023, OFAC issued aCompliance Communique which provides additional guidance for the provision of humanitarian assistance to the Palestinian people.

Click here for more information on the individuals designated today.

Additional Treasury resources on countering the financing of terrorism:

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I'm an expert in terrorism financing and sanctions compliance with extensive knowledge in this field. My expertise is demonstrated by my in-depth understanding of the complex mechanisms involved in terrorist financing, including traditional financial systems and emerging technologies like cryptocurrency. Additionally, I'm familiar with the regulatory frameworks and international efforts aimed at combating terrorism financing, such as the actions taken by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC).

Now, let's delve into the concepts mentioned in the provided article:

  1. Office of Foreign Assets Control (OFAC): OFAC is a part of the U.S. Department of the Treasury responsible for enforcing economic and trade sanctions based on U.S. foreign policy and national security goals. It administers and enforces economic and trade sanctions against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction.

  2. Hamas: Hamas is a Palestinian Sunni-Islamic fundamentalist militant organization and political party. It has been designated as a terrorist organization by several countries, including the United States and the European Union, due to its history of violence and terrorist activities aimed at Israel.

  3. Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF): The IRGC-QF is a branch of Iran's Islamic Revolutionary Guard Corps responsible for carrying out and supporting terrorist activities and unconventional warfare operations outside Iran. It has been involved in providing support to various terrorist organizations, including Hamas and Palestinian Islamic Jihad (PIJ).

  4. Cryptocurrency Transfers: The article highlights the use of cryptocurrency transfers by Hamas and its affiliates as a means to channel funds for terrorist activities. Cryptocurrencies provide a decentralized and pseudonymous means of transferring value, making it challenging for authorities to track and disrupt illicit financial flows.

  5. Executive Order (E.O.) 13224: E.O. 13224 is a U.S. executive order signed by President George W. Bush in 2001, shortly after the September 11 attacks. It provides the legal authority for the U.S. government to designate individuals and entities as terrorists or supporters of terrorism and to block their assets.

  6. Financial Facilitators and Networks: The article describes various individuals and entities involved in facilitating financial transfers from the IRGC-QF to Hamas and PIJ. These include money changers, exchange companies, and individuals who coordinate the movement of funds through traditional and non-traditional channels.

  7. Sanctions Implications: The article explains the consequences of OFAC's sanctions, including the blocking of assets and restrictions on financial transactions involving designated persons or entities. It also mentions the potential risks for non-U.S. financial institutions and individuals engaging in transactions with sanctioned entities.

  8. Legitimate Humanitarian Assistance: The article emphasizes OFAC's commitment to enabling the flow of legitimate humanitarian assistance while preventing resources from reaching malicious actors. It highlights provisions for legitimate humanitarian support and provides guidance for humanitarian transactions in support of vulnerable populations.

By analyzing these concepts, it's evident that the article discusses OFAC's actions to target Hamas-affiliated financial networks, including their use of cryptocurrency, and the implications of these sanctions on designated individuals and entities involved in terrorist financing activities.

U.S., UK, and Australia Target Additional Hamas Financial Networks and Facilitators of Virtual Currency Transfers (2024)
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