Wednesday, April 26, 2006
Banks are concerned about running afoul of U.S. terrorism laws.
RAMALLAH, West Bank (AP) -- Banks fearful of U.S. retribution are preventing millions of dollars in foreign aid from reaching the Palestinians, the Palestinian finance minister acknowledged Tuesday.
Since a Cabinet run by the militant Islamic Hamas was sworn into office last month, financial pressure by Israel and Western countries has left the government broke. It was unable to pay 165,000 workers on April 1 and paychecks are due again in less than a week.
Hamas turned to Arab and Muslim countries for help. But the money raised remains stuck in an account in Egypt, said Finance Minister Omar Abdel Razek of Hamas. Arab banks that do business in the Palestinian territories fear that by transferring the money, they will run afoul of U.S. anti-terrorism laws, he said.
"The money is available. The problem is getting it here," Abdel Razek said.
The funds have been converted to euros to lessen the possible American connection, said Abdel Razek, a U.S.-educated economist. The government is discussing possible next steps with the banks. "We hope to find a solution in the near future," he said.
The Palestinian government needs about $160 million a month to break even, more than half of it from foreign aid. Hamas has raised about $70 million so far from Iran and Saudi Arabia, he said. The Saudis have promised an additional $70 million, while Iran has offered another $50 million.
Hamas labeled terrorist
The U.S. has labeled Hamas, which is committed to Israel's destruction, a terrorist group. Based on that assessment, it has barred Americans from most business dealings with the new Palestinian government.
American officials have not said whether these restrictions apply to transfers by non-American banks. But Hamas says lenders operating in the West Bank and Gaza Strip are taking no chances.
"We hope that the banks that don't deal with the United States will transfer this money for us," Abdel Razek said.
The Jordan-based Arab Bank, the largest bank in the Palestinian areas, declined to comment.
Palestinian President Mahmoud Abbas, on a visit to Turkey, said the international financial pressure on Hamas is hurting all Palestinians. The Palestinian government is the biggest employer in the West Bank and Gaza.
"The burden is on the Palestinian people," he said, adding that officials are looking for a "new mechanism" to deliver the aid. He did not elaborate.
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