Al-Aqsa Islamic Bank was established by Hamas in the Palestinian territories in 1997 to serve as the organization’s financial arm. The bank laundered and transferred money on behalf of U.S.-terrorist designated Hamas until its assets were frozen by the U.S. authorities in 2001  The bank’s licence was revoked in 2010.
Al-Aqsa Islamic Bank was established with $20 million in capital and became operative in 1999. Contributions from charities and individual supported the establishment of the bank, although Hamas received a major contribution in 1998 from the owner of the Saudi Al-Baraka Bank Saleh Abdullah Kamel and from Jordan Islamic Bank, a subsidiary of al-Baraka.
Kamel had provided significant financial support to Osama bin Laden in 1983. The Saudi millionaire appeared on the list of purported sponsors of al-Qaeda that was seized in Sarajevo in 2002 during a raid of the premised of the Benevolence International Foundation. The operation, led by Bosnian police, uncovered what has been later labeled as “The Golden Chain,” a list later vouched by al-Qaeda defector Jamal al-Fadl that included 20 top Saudi and Gulf States financial sponsors.
Al-Aqsa Islamic Bank was 20% owned by Beit el-Mal Holdings, an investment group based in the West Bank with chapters in East Jerusalem and Gaza. The two financial institutions shared senior officers and directors, and a majority of their shareholders were renown to be affiliated with Hamas. Mohammed Sarsour, a U.S. citizen who served as Vice-President of Bir Zeit University, was both Deputy General of Al-Aqsa Islamic Bank and General Manager of Beit al-Mal Holdings.
Beit al-Mal itself was originally established to fundraise and transfer money for associations that the Palestinian Authority had identified as associated with Hamas. Both Al-Aqsa Islamic Bank and Beit al-Mal Holdings are part owners of Sinokrot Global group and “cooperatively act[ed] as a buffer between Hamas and its donors.”
Cooperation with Citigroup
Shortly before the bank started operations, the affiliations with Hamas of several of its employers and board members became evident, and a number of banks refused to clear its transactions.
In particular, Al-Aqsa Islamic Bank’s money laundering operation on behalf of Hamas cost the bank the possibility to do business in Israel. Therefore, in order to evade Israeli sanctions, Al-Aqsa Bank embarked on joint projects with Citigroup, intertwining itself the bank’s Israeli division.
The joint projects with Citigroup led to the establishment of a joint database for Israel. Moreover, the cooperation between Citibank and Al-Aqsa Islamic Bank expanded to the extent that money deposited into Al-Aqsa accounts in Europe and in the Middle East could be accessed from Israel through Citibank chapters.
In January 2001 Citibank opened an office in Tel Aviv. Israeli authorities then formally questioned its cooperation with Al-Aqsa Islamic Bank and urged Citigroup to request advice from the U.S. Treasury Department. Citigroup has not released any information on the Treasury Department’s response; however, the bank has severed its ties to Al-Aqsa.
At that point, however, Al-Aqsa bank had received funds for at least $1 million through Citibank on behalf of Hamas.
On December 4, 2001 after suicide attacks in Israel that killed 25 and injured over 200 the U.S. authorities under the authority of Executive Order No. 13224 designated Hamas as a terrorist organization with “global reach” and froze the assets of the Holy Land Foundation, Beit al-Mal Holdings and Al-Aqsa Islamic Bank. The three entities were providing financial and material support to Hamas.
The Palestinian Monetary Authority canceled the license of the Bank as of April 1, 2010.
- ^ Jump up to:ab Harmon, Christopher C. (2008). Terrorism Today. Routledge. 2nd Edition. Pp.84-85
- ^ Jump up to:ab c Allen, Mike; Mufson, Steven (2001-12-05). “U.S. Seizes Assets of 3 Islamic Groups”. The Washington Post. ISSN 0190-8286. Retrieved 2016-01-08.
- ^ Jump up to:ab c d e f g h Ehrenfeld, Rachel. (2005). Funding Evil: How Terrorism is Financed and How to Stop it. Chicago and Los Angeles: Bonus Books. Pp.104-105.
- ^ Jump up to:ab Risen, James. (2014). Pay Any Price: Greed, Power, and Endless War. Houghton Mifflin Harcourt. P.79.
- ^ Jump up to:ab c d “The Avalon Project : Shutting Down the Terrorist Financial Network; December 4, 2001”. avalon.law.yale.edu. Retrieved 2016-01-08.
- ^ Jump up to:ab c d e Congressional testimony, “Fund-Raising Methods and Procedures for International Terrorist Organizations,” February 12, 2002.
- ^http://www.pbapalestine.org/general/memers/members2.ht[permanent dead link]
- ^Levitt, Matthew. (2008). Hamas: Politics, Charity, and Terrorism in the Service of Jihad. The Washington Institute for Near East Policy. P.165.
- ^“Court Asks State Why it Took $1 Million of HAMAS Cash,” Ha’aretz, September 15, 2000.
- ^ Jump up to:ab Miller, Judith; Atlas, Riva D. (2001-01-24). “Citibank Weighs Ending Ties With an Arab Bank”. The New York Times. ISSN 0362-4331. Retrieved 2016-01-08.
- ^“Liquidation of Al-Aqsa Islamic Bank”. Palestine Monetary Authority. 2010-05-10. Retrieved 2016-01-08.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.