Intelligence and Terrorism Information Center at the Center for Special
Studies (C.S.S)
Special Information Bulletin July 2004
www.intelligence.org.il/eng/finance/bank.htm

Palestinian Terrorist Organizations Use The Arab Bank to Channel Money into
Terrorism

Introduction

The Arab Bank is a private banking institution with head offices in Jordan.
It is one of the largest banks in the Arab world and has many branches in
the Palestinian Authority (PA)- administered territories. It is the
preferred channel of many Palestinian terrorist organizations, particularly
Hamas and the Palestinian Islamic Jihad, for the transfer of money from
external sources into the PA-administered territories .

Documents captured by the Israeli army clearly illustrate the bank's
important role as a the Palestinian terrorist organization conduit for the
transfer of funds to the infrastructure supporting their activities
(payments to the families of terrorists who die while perpetrating attacks,
and to terrorists who are wounded, imprisoned or wanted by the Israeli
police).

In addition, funds move through the bank to finance their military
activities and civilian infrastructure ( da'wah ). It is reasonable to
assume that members of the bank's directorate, and certainly officials of
the Palestinian Authority and its security services, are aware of the
services the bank provides to the terrorist organizations; despite that,
they have never taken effective steps to stop them.

Background

The Arab Bank is one of the largest financial institutions in the Arab
world. It has 190 branches in 28 countries and operates in every Arab
country (including 87 branches in Jordan, 15 in the PA-administered
territories, 12 in Lebanon, 11 in Morocco, 9 in Yemen, 8 in Oman, 8 in the
United Arab Emirates, 7 in Egypt, 5 in Bahrain, 4 in Qatar and 3 in
Algeria). They also have branches in the United States, the United Kingdom,
Europe, Asia and Australia. The head office is located in Jordan , where it
is considered the largest and most important institution of its kind. In the
past, its annual turnover was estimated at $26 billion. Founded in 1930 in
Jerusalem by 'Abd al-Hamid Shuman , a Palestinian immigrant from the United
States, it expanded to the Arab countries and abroad, and now focuses on
serving the Arab population.

The Arab Bank is a private institution controlled by the Shuman family ,
which holds 40% of the stock. According to its financial report of December
31, 2001, its assets are $21.5 billion and debits are $19.5 billion,
primarily in deposit accounts. It employs 6,000 workers, a large percentage
of whom are Jordanian , including the Board of Directors . During the first
half of 2001 it earned $208 million, compared with $184 million during the
same period of the previous year, on which it paid $41 million in taxes.

How the Palestinian terrorist organizations use the bank's "good services"

On February 25, 2004, the Israeli security forces seized Arab Bank funds in
an operation designed to confiscate money on deposit for terrorist
organizations in banks in the PA-administered territories. The branches were
chosen on the basis of intelligence information supported by captured
documents. The information showed that Hamas and the Palestinian Islamic
Jihad had an clear preference for both depositing their money and moving
through the Arab Bank . (The names of the organizations whose funds were
confiscated can be found in Appendix F. )

The Arab Bank is the Palestinian terrorist organizations' favorite bank
because it has many branches throughout the PA-administered territories and
elsewhere and is therefore more convenient than any other bank. It can be
assumed that various bank officials are aware that the deposits originate
with terrorist organizations and are used for terrorist activities or for
the infrastructure supporting them (See below), but choose to turn a blind
eye.

Palestinian terrorist organizations, particularly Hamas and the Palestinian
Islamic Jihad , exploit the situation to the fullest and every year transfer
millions of dollars from external sources to the PA-administered territories
through the Arab Bank . The money is spent on running the organizations and
aiding the civilian infrastructure supporting terrorist activities, i.e.,
payments to the families of terrorists who die while perpetrating attacks
against Israel, and to terrorists who are wounded, imprisoned or wanted by
the Israeli police, and paying the costs involved in perpetrating terrorist
acts themselves . Payments are made directly by bank transfer from abroad to
the accounts of the families of Hamas activists through the Arab Bank (For
examples see the documents in Appendix E ). In addition, the bank is used to
transfer funds which support the activities of the various "charitable
societies" belonging to the radical Islamic terrorist organizations (the
Palestinian Islamic Jihad and Hamas ), most of which Israel has declared
illegal (See Appendix F ).

Following is summary of information about the Palestinian terrorist
organizations which use the services
of the Arab Bank :

Hamas
- The Hamas leadership (which is based in Syria) routinely transfers money
to the PA-administered territories through branches of the Arab Bank . The
money is paid to the families of those killed, wounded, imprisoned and
wanted by the Israeli authorities, and to fund terrorist activities . Some
of the terrorist operatives are also involved in Hamas's civilian
activities, for instance, Jamal Tawil , who founded the Al-Islah Charitable
Society Association in Ramallah. 1

- Many of the "charitable societies" openly identified with Hamas (such as
the Al-Islah Charitable Society Association) have Arab Bank accounts. The
accounts are in the societies' names and their identification with Hamas is,
it is assumed, well-know to Arab Bank officials and employees, if only
because in the past, both Israel and the Palestinian Authority worked
against them; Israel continues to do so at present.

+ Jamal Tawil was involved in the suicide bombing attack at the Ben Yehuda
mall in Jerusalem in December 2001, in which 11 Israelis were killed and 170
wounded. Under interrogation he stated that he decided to open a branch of
the Al-Islah society in Ramallah to provide a legal cover for Hamas
activities there.

The Palestinian Islamic Jihad leadership
- The Palestinian Islamic Jihad leadership is based in Damascus and also
transfers funds to Palestinian terrorists in the PA-administered territories
through the Arab Bank . The money is used for its terrorist activities and
given to the families of Palestinian Islamic Jihad members killed, wounded,
imprisoned or wanted by Israeli authorities. According to documents
captured, Palestinian Islamic Jihad activists in the PA-administered
territories were required to open accounts only at branches of the Arab Bank
, because that was the bank the organization most often used .

- Captured documents, including those belonging to the Elehssan "charitable
society" in Tulkarm, illustrate the central - if not exclusive - role played
by the bank in the transfer of money to the families of shaheeds (martyrs
for the sake of Allah) and to fund the civilian infrastructure supporting
terrorist activities of the Palestinian Islamic Jihad (payments to the
families of wounded, imprisoned and wanted Palestinian Islamic Jihad
members) (See Appendices B and C ).

Fatah/Al-Aqsa Martyrs' Brigades
- Since Operation Defensive Shield (April 2002), Fatah has received
ever-increasingly large amounts of money from Iran . The funds are
transferred from Iran through Lebanon and into the accounts of senior Fatah
operators in the PA-administered territories (such as Nasser 'Uweis before
his arrest). In these instances as well, the accounts had to be opened only
at the Arab Bank .

The Popular Front for the Liberation of Palestine - General Command (Ahmad
Jibril)
and other organizations
- The PFLP - GC and other factions of the popular front, also use the Arab
Bank to receive money from their headquarters outside the PA-administered
territories.

Awareness of the Arab Bank's officials and employees of the services
provided
to the Palestinian terrorist organizations

It can be assumed that officials at the Arab Bank are aware of the nature of
the transactions involving the Palestinian terrorist organizations because
they have been carried out continuously for many years . Even if,
hypothetically, the bank's officials do not actively collaborate with Hamas
and the Palestinian Islamic Jihad, they certainly have to be aware at least
of the existence of the accounts and of the fact that they belong to these
organizations (regarded in the United States and Europe as terrorist
organizations) . That is because most of the accounts of the societies are
in their own names (and their identification with the terrorist
organizations is common knowledge ) and because of the overt actions taken
against those Arab Bank accounts in the past by Israel and the Palestinian
Authority.

In addition, in the past Hamas openly revealed the use it made of the Arab
Bank by soliciting donations and posting account numbers on its Internet
site ; the bank's officials and employees can be assumed to have been aware
of the posting. Moreover, in December 2001 and August 2003, the Palestinian
Authority froze the Arab Bank accounts of "charitable societies" identified
with terrorist organizations and the officials and employees can be assumed
to have been aware of that as well .

The Arab Bank's connections with the Palestinian Authority and its security
services and the Authority's awareness of the services the Bank provides to
the Palestinian terrorist organizations

The Arab Bank has close connections with the Palestinian Authority and its
security services. 2 The bank is important, in Palestinian Authority eyes,
primarily because of the lack of a Palestinian currency, which forces the
Authority conduct its business in a currency over which it does not have
full control . That problem is exacerbated by two structural problems of the
Palestinian economy:

2 According to captured documents, the Palestinian security service has
accounts at the Arab Bank and its heads are in close communication with the
bank's officeals.

The weakness of the Palestinian Monetary Authority, whose function can be
summed up as partial inspection of the banking system in the PA-administered
territories with no real tools for enforcing laws.

The broad use made by Palestinian householders and the private sector in
general of Israeli shekels . The historical connections between the
Palestinian and Israeli economies led to a situation in which the prices of
goods sold in the Palestinian Authority are in marked shekels and most
salaries are paid in the Israeli currency as well.

Despite the strong protests of senior officials in the Palestinian Authority
in the wake of the confiscation of funds from the Arab Bank in Ramallah,
there can be no doubt that the Palestinian Authority and its security
services are well aware of the assistance provided by the bank to the
Palestinian terrorist organizations .

In the past, that was expressed when the Authority even took temporary steps
against them , although they were ineffective and short-lived. In addition,
captured documents reveal that in the past (before the outbreak of the
current ongoing violent confrontation which began in September 2000) the
various Palestinian Authority services (Preventive Security and General
Intelligence) identified the Arab Bank as the main conduit for transferring
funds from abroad (including Syria) to the terrorist organizations and
operatives, and also monitored the flow of money through the Arab Bank to
the families of Hamas and Palestinian Islamic Jihad members who were killed,
wounded, imprisoned or wanted by Israel (See Appendices A and E ).

Lebanon, the center for the transfer of funds to the PA-administered
territories

Lebanon is the center through which massive amounts of funds pass on their
way to the Arab Bank in the PA-administered territories. Terrorist
organization headquarters in Damascus frequently use Lebanon as a relay
station. The reasons would appear to be a mixture of politics and
convenience : Damascus does not want to incriminate itself by leaving a
paper trail to its door; Lebanon has a well-developed banking system; there
are problems and difficulties in transferring money through Jordan
(especially after 1999).

During the past few years millions of dollars have probably passed through
Lebanon to Hamas and Palestinian Islamic Jihad activists in the
PA-administered territories.

Transferring funds to the PA-administered territories through the Arab Bank
from charity funds in the Western world connected to Hamas

In May 1997 Israel designated four funds as illegal: the Holy Land
Foundation ( HLF ) in the United States, the Interpal fund in Great Britain,
the Al-Aqsa Foundation in Germany and the CBSP (Committee for Palestinian
Charity and Aid) in France. Nevertheless, the funds have continued
transferring money through the Arab Bank to bodies identified with
Palestinian terrorist organizations in the PA-administered territories.

Appendices

The Appendices are based on captured Palestinian documents.
[Documents are presented in their original with translations at the URLs
appearing with each Appendix]

Appendix A :
www.intelligence.org.il/eng/finance/bank_ap1.htm
A document written by the Palestinian General Intelligence apparatus
sometime around 1996 about bank accounts held by Palestinian Islamic Jihad
members in the various districts of the West Bank: It showed that Arab Bank
branches had transferred money to the accounts of families of shaheeds
(martyrs for the sake of Allah) and prisoners who were Palestinian Islamic
Jihad members . The document goes on to give details of Arab Bank accounts
of Palestinian Islamic Jihad activists in the districts of Ramallah,
Al-Bireh, Jerusalem, Hebron, Bethlehem, Tulkarm and Qalqiliya.

Appendix B :
www.intelligence.org.il/eng/finance/bank_ap2.htm
A document found (October 18, 2003) among the captured papers of the
Elehssan society in Tulkarm: The society is identified with the Palestinian
Islamic Jihad and is part of its terrorism-supporting apparatus. The
document contained a table showing payments made through the Arab Bank to
the families of Palestinian Islamic Jihad shaheeds and operatives living in
the Tulkarm region [including Rami Muhammad Mutlaq Ghanim , the suicide
bomber who perpetrated the attack at the London Café in Netanya on March 30,
2003, in which 34 people were wounded].

Appendix C:
www.intelligence.org.il/eng/finance/bank_ap3.htm
A document found among the captured papers of the Elehssan society: It
states that to receive support from the society, the beneficiaries (family
members of shaheeds , the wounded or the imprisoned) are required to have
accounts at the Arab Bank . The document further grades the monthly
payments, giving substantially higher amounts of money to the families of
suicide bombers as compared to those of "regular" shaheeds with the intent
of encouraging suicide bombing attacks .

Appendix D:
www.intelligence.org.il/eng/finance/bank_ap4.htm
Transfer of money through the Arab Bank from Saudi Arabia to elements
connected with Hamas: Saudi Arabian documents belonging to the Saudi Arabian
Committee for the Aid of the Al-Quds Intifada 3 were found in the possession
of the Charity Committee of Tulkarm , a body identified with Hamas . The
documents mention the Arab Bank as the financial institution though which
transfers of funds are made from the Committee to the families of
Palestinian terrorists in the Tulkarm region. They make it clear that the
funds were also used to support Hamas and encourage terrorist activity .

Appendix E :
www.intelligence.org.il/eng/finance/bank_ap5.htm
Reports from the Palestinian General Intelligence and Preventive Security
apparatuses captured in Operation Defensive Shield (April 2002): The
documents refer to the transfer of funds to Hamas and Palestinian Islamic
Jihad activists through the Arab Bank .

Appendix F:
www.intelligence.org.il/eng/finance/bank_ap6.htm
The names of the organizations whose Arab Bank accounts were confiscated by
Israeli security forces (February 25, 2004), all of them identified with
Hamas and the Palestinian Islamic Jihad. The confiscations were part of the
Israeli struggle against the terrorism-supporting funds transferred to the
PA-administered territories through the Arab Bank .

3 The Committee was established to provide aid to the Palestinian people in
September 2000, when the current violent confrontation began.