Taxes, extortion and state sponsors among Gaza militants’ main sources of funds
Since October 7, Israel and western countries have tried to curb Hamas’s international financing networks, hoping to hinder its ability to conduct further attacks.
The precise inner workings of the group’s finances are kept secret, but analysts have gathered estimates.
With both the US and EU having designated Hamas as a terrorist entity, the group is excluded from receiving aid that they provide to the Palestine Liberation Organisation in the occupied West Bank.
Before taking over the Gaza Strip in 2007, Hamas relied primarily on funding from Iran, other state sponsors including Syria and Sudan, and donations from charities and crowdfunding campaigns, often sent as cryptocurrency.
After 2007, the militant group imposed taxes on items brought in through its extensive tunnel network, bypassing the official crossing point at the Egyptian border with Gaza.
It also imposed taxes on civilians and companies, and implemented fees for the registration of vehicles, licences, electricity, water and birth certificates.
Experts believe Hamas earns between $350 million and $630 million a year through taxation, extortion, border control and other means derived from its control over Gaza.
Taxes represent the largest share of Hamas’s revenue, said Jessica Davis, president of the Canada-based Insight Threat Intelligence think tank.
They are followed by donations from Qatar – valued at $180 million – and Iran ($100 million), as well as investments ($20 million), she added.
Since its formation in 1987, Hamas has been one of Iran’s biggest beneficiaries, receiving funds, weapons and training from Tehran.
“Iran provides these funds through Iran’s Islamic Revolutionary Guard Corps’s Quds Force, and these funds are likely provided directly to Hamas’s armed wing, the Ezzedine Al Qassam Brigades,” Ms Davis wrote.
Turkey has been another strong supporter of Hamas and does not consider it a terrorist group.
Brian Nelson, the US Treasury’s undersecretary for terrorism and financial intelligence, said in November last year that Ankara has long played a “prominent role” in allowing Hamas access to funds.
Turkish President Recep Tayyip Erdogan defied mounting US pressure to cut Ankara’s ties with the militants after the October 7 attacks on Israel.
As for Qatar, it began making monthly payments to the Gaza Strip in 2018, delivering cashfilled suitcases – with Israel’s approval – to pay employee salaries, provide humanitarian aid and run social services in Gaza.
The payments started after the Palestinian Authority in the West Bank decided to cut the salaries of government employees in Gaza in 2017.
Last week, the EU’s top diplomat Josep Borrell said Israel had financed the creation of Hamas in a bid to weaken the Palestinian Authority.
“Yes, Hamas was financed by the government of Israel in an attempt to weaken the Palestinian Authority led by Fatah,” Mr Borrell said on Friday.
Israeli Prime Minister Benjamin Netanyahu has denied accusations that his government spent years actively boosting Hamas in Gaza.
Experts told The National
that Qatar, which also hosts several of Hamas’s leaders in Doha, has enabled the transfer of millions of dollars to charitable organisations linked to the group.
Hamas diversifies its funds by investing in business ventures, a strategy that helps conceal the source and whereabouts of its finances.
Experts said Hamas’s investment portfolio includes about 40 companies, mostly in the construction and real estate sectors in countries such as Turkey,
Qatar, Algeria and Sudan. Hamas’s portfolio, which the US Treasury believes is worth more than $500 million, is managed by the group’s investment office in Turkey.
Hamas also relies on intermediaries to conduct its financial activities covertly, as well as an informal financial system, including money exchange houses that are used to move funds.
Cryptocurrency has also played an important role in moving Hamas funds.
“Hamas did use crypto, largely not to generate money, but mostly as a means of moving money, largely for crowdfunding campaigns,” said Matthew Levitt, Fromer-Wexler fellow and director of the Reinhard Programme on Counterterrorism and Intelligence at The Washington Institute.
Ms Davis wrote: “The amount transferred could be significant, with some estimates stating that Hamas had received $41 million between August 2021 and June 2023, often through small-dollar donations.”
Taxes represent the largest share of Hamas’s revenue, followed by donations from Qatar and Iran, one expert said