Eleven days after Hamas’s Oct. 7 massacre, the U.S. Treasury sanctioned a terror financier named Muhammad Nasrallah. According to Treasury, Nasrallah has “close ties to the Iranian regime” and “was involved in the transfer of tens of millions of dollars to Hamas.”
Nasrallah, based in Qatar, was operating there for years before Hamas struck.
In 2017, the U.S. and Qatar had formally pledged to combat terror finance together. So the longtime presence of a major, Iran-linked Hamas financier on Qatari soil raises serious questions about how much change the U.S.-Qatar memorandum of understanding has yielded. With the Middle East teetering on the brink of a regional war, Washington needs to assess the agreement’s impact.
Qatar remains one of the leading state-sponsors of Hamas. Doha hosts Hamas’s political office, harbors senior Hamas leaders and showers the Hamas-run government in Gaza with hundreds of millions of dollars each year. The U.S. and Israel implicitly signed off on this arrangement, with the expectation that the Qatari funds would stabilize Gaza and that Doha would provide Hamas sanctuary but crack down on home-grown terror finance activity. Evidently, those assumptions were misplaced.
While financial crime can crop up anywhere, there is reason to believe that Qatar remains an oasis for terror finance.
Last year, the Financial Action Task Force — an international money laundering and terror finance watchdog — found that Qatar “has not demonstrated that it is effectively identifying, investigating, or prosecuting” terror financing cases. Qatar’s overall terror finance conviction rate is just 28 percent, which the task force notes is especially low, given the emirate’s risk profile and the Qatari “criminal system’s response to other financial crimes.” Indeed, Qatar hasn’t convicted a single terror financier since 2018.
The Treasury Department seems aware that Doha has a lot more work to do in terms of combatting terror finance.
In February, Undersecretary of the Treasury Brian Nelson noted “the importance of addressing terrorist financing vulnerabilities” in Qatar and other countries in the region in testimony before the House Financial Services Committee. Whether Qatar has made necessary progress combatting terror finance is a question worth asking; the full text of the 2017 U.S.-Qatar memorandum was never made public, so it’s hard to know what benchmarks Doha pledged to meet and in what timeframe.
Here’s what we do know: the memorandum came one month after nearly every country in the Gulf Cooperation Council severed ties with Qatar, accusing the emirate of “funding” and “adopting” extremist groups, among other offenses. Weeks earlier, then-President Trump had announced in Riyadh the creation of the U.S.-Gulf Cooperation Council Terrorist Financing Targeting Center — a multilateral initiative to disrupt terror financing networks.
Secretary of State Rex Tillerson applauded the Qataris “for being the first to respond to President Trump’s challenge at the Riyadh Summit to stop the funding of terrorism.” He pledged that, together, Washington and Doha would “do more to keep the region and our homeland safe.” Along with Qatari Emir Sheikh Tamim bin Hamad Al-Thani, Tillerson said the agreement “specifies the steps each country will take to stop terrorism financing globally, and sets a timeline for its implementation.”
The Qataris appeared ready to crack down on terror finance. In March 2018, for example, Doha placed more than two dozen people and entities on a terrorism blacklist, including two Qatari nationals whom the blockading Arab countries had previously identified as financiers of the al Qaeda-affiliated Nusra Front in Syria. The next year, Qatar issued a new law to enhance its anti-money laundering and counterterrorism financing efforts.
Doha also teamed up with Washington in 2021 to sanction eight targets connected to a “major Hezbollah financial network based in the Arabian Peninsula” that remained active in Qatar through at least 2019. One of those targets was a Qatar-based property management company owned by a financier named Sulaiman al-Banai. According to the U.S. Treasury, al-Banai was “was a primary manager” of his relative and fellow Hezbollah funder’s “business and financial activity in Qatar and abroad.”
Greater congressional oversight of the 2017 U.S.-Qatar terror finance memorandum is clearly needed. Specifically, lawmakers should request that the U.S. Government Accountability Office review Qatar’s progress combatting terror finance and report back on the implementation and enforcement of the 2017 agreement as a way of providing an outside, impartial assessment.
Qatar cannot remain a lax environment for funders of terror and at the same time serve as a regional mediator and close ally of the United States. When it comes to terror finance, Qatar has not yet been exonerated.
Natalie Ecanow is a research analyst at the Foundation for Defense of Democracies, a nonpartisan research institute in Washington, focusing on national security and foreign policy.
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