amas is a Sunni Islamist group that has effectively governed the Gaza Strip since 2007, following a civil war fought against Fatah, another Palestinian party. Over the past fifteen years, it has established a complex structure to manage local politics, the economy, and security, all while coexisting with Israel and Egypt's blockade of the Gaza Strip. The group's revenues for these purposes come from three different sources: collecting taxes, transfers from other countries, and donations from people worldwide through Hamas–linked cryptocurrencies and charities. The West, particularly Israel and the U.S., has succeeded in containing only the third flow of revenues since there are some tools to sanction and block Hamas–affiliated cryptocurrency wallets and charities.
Before the 7 October war, the Gaza Strip had already experienced a prolonged economic decline. In 2022, the real GDP per capita was $1,257, a decline from $1,994 in 2006 before Hamas took control of the territory. According to some estimates, Hamas has an annual budget of about $1 billion, which is used to pay the salaries of Hamas–appointed public sector workers (about 50,000 people), finance terrorist activities, and provide public goods.
Geopolitics of Hamas' key revenues: taxes and foreign interferences
Hamas operates many functions of internationally recognized states, and its primary source of revenue is tax collection, which amounts to about $620 million annually. Hamas has built and run an extensive network of smuggling tunnels to illegally trade weapons and goods in and out of the Gaza Strip. Hamas imposes taxes on these trade flows, which have been raised in recent months, fueling local merchants' discontent and protests.
The second–largest portion of Hamas's annual budget comes from foreign countries, including Qatar, Iran, and Turkey. Such funds are closely tied to geopolitical considerations. Qatar is the largest contributor, providing around $180 million to the group each year, and other significant resources, to become a diplomatic power and maintain close ties with antagonistic powers in the region, such as Saudi Arabia, Iran, and Turkey. Initially, Qatar allegedly sent money to Hamas using briefcases filled with cash through the smuggling tunnels. However, in 2018, Qatar and Israel made an agreement that allowed Doha to make monthly payments to Hamas under the monitoring of the Israeli secret services. Israel chose to regulate these cash flows in exchange for being able to track them.
Iran provides approximately $100 million annually to support Hamas, viewing the group as a crucial, military ally within the ‘Axis of Resistance,’ a network of Middle Eastern actors aiming to defeat Israel. The Islamic Revolutionary Guard Corps (IRGC), an elite division of the Iranian military, also extensively supplies Hamas with military resources and offers training.
Lastly, while the exact amount of money that Hamas receives from Turkey is uncertain, there are official reports indicating that certain Turkish real estate development funds, such as Trend GYO, operate as Hamas investment portfolios abroad. Domestic considerations primarily drive Turkey's relations with Hamas, as Erdoğan aims to position himself as the defender of the Palestinian cause to boost his popularity and legitimacy.
Private donors and their newest strategy
Seeing as the most significant part of Hamas' annual revenues comes from the impoverished domestic economy, the group administers act as a proto–state with parallel institutions to those of the Palestinian National Authority in the West Bank. However, as Middle Eastern geopolitics have evolved and new technological tools have emerged, Hamas, too, has evolved their funding strategies. Compared to the past, the group is increasingly dependent on funding from overseas supporters who back Hamas' armed struggle.
That said, Hamas has also established a complex system for receiving money from private donors worldwide. The first method is through a network of Hamas–affiliated charities that primarily raise funds in the U.S., Canada, and Europe. Many of these organizations are under U.S. sanctions and rely on Hawala, a value transfer system that bypasses Western banks for their operations. The second method involves cryptocurrency transfers, which total about $10 million annually. ‘Buy Cash,’ a U.S.–sanctioned, Gaza–based remittance company, is a key player in facilitating these financial flows. Crypto transfers offer several advantages to Hamas, including bypassing international sanctions, cutting out financial intermediaries, and enabling immediate access to funds.
This area has been the most contentious as the United States and Israel continue their efforts to identify and shut down all Hamas–related entities. However, this process comes with significant issues as U.S. and Israeli authorities adopt a case–by–case approach, which can be lengthy and cumbersome. Out of the three revenue streams, this is the one where the West has achieved the most significant results. There is some degree of monitoring and blocking capabilities compared to transfers from foreign countries or collecting taxes in the Gaza Strip. For example, the amount of money received from Turkey and the complexity of Ankara–Hamas’ economic and political ties are mostly under the radar and hard to estimate. The same applies to Iran and its IRGC contributions to the group's economic and military capabilities.
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Unpacking Hamas' financial network for governing the Gaza Strip
Protestors with Palestinian flags. Photo by Mohammed Adubakr from Pexels.
August 6, 2024
Hamas’ has three main revenue streams: collecting taxes from the impoverished economy, transfers from other countries, and donations from people worldwide through Hamas–linked cryptocurrencies and charities—the latter of which the U.S. has had the most success impeding, writes Elia Preto Martini.
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amas is a Sunni Islamist group that has effectively governed the Gaza Strip since 2007, following a civil war fought against Fatah, another Palestinian party. Over the past fifteen years, it has established a complex structure to manage local politics, the economy, and security, all while coexisting with Israel and Egypt's blockade of the Gaza Strip. The group's revenues for these purposes come from three different sources: collecting taxes, transfers from other countries, and donations from people worldwide through Hamas–linked cryptocurrencies and charities. The West, particularly Israel and the U.S., has succeeded in containing only the third flow of revenues since there are some tools to sanction and block Hamas–affiliated cryptocurrency wallets and charities.
Before the 7 October war, the Gaza Strip had already experienced a prolonged economic decline. In 2022, the real GDP per capita was $1,257, a decline from $1,994 in 2006 before Hamas took control of the territory. According to some estimates, Hamas has an annual budget of about $1 billion, which is used to pay the salaries of Hamas–appointed public sector workers (about 50,000 people), finance terrorist activities, and provide public goods.
Geopolitics of Hamas' key revenues: taxes and foreign interferences
Hamas operates many functions of internationally recognized states, and its primary source of revenue is tax collection, which amounts to about $620 million annually. Hamas has built and run an extensive network of smuggling tunnels to illegally trade weapons and goods in and out of the Gaza Strip. Hamas imposes taxes on these trade flows, which have been raised in recent months, fueling local merchants' discontent and protests.
The second–largest portion of Hamas's annual budget comes from foreign countries, including Qatar, Iran, and Turkey. Such funds are closely tied to geopolitical considerations. Qatar is the largest contributor, providing around $180 million to the group each year, and other significant resources, to become a diplomatic power and maintain close ties with antagonistic powers in the region, such as Saudi Arabia, Iran, and Turkey. Initially, Qatar allegedly sent money to Hamas using briefcases filled with cash through the smuggling tunnels. However, in 2018, Qatar and Israel made an agreement that allowed Doha to make monthly payments to Hamas under the monitoring of the Israeli secret services. Israel chose to regulate these cash flows in exchange for being able to track them.
Iran provides approximately $100 million annually to support Hamas, viewing the group as a crucial, military ally within the ‘Axis of Resistance,’ a network of Middle Eastern actors aiming to defeat Israel. The Islamic Revolutionary Guard Corps (IRGC), an elite division of the Iranian military, also extensively supplies Hamas with military resources and offers training.
Lastly, while the exact amount of money that Hamas receives from Turkey is uncertain, there are official reports indicating that certain Turkish real estate development funds, such as Trend GYO, operate as Hamas investment portfolios abroad. Domestic considerations primarily drive Turkey's relations with Hamas, as Erdoğan aims to position himself as the defender of the Palestinian cause to boost his popularity and legitimacy.
Private donors and their newest strategy
Seeing as the most significant part of Hamas' annual revenues comes from the impoverished domestic economy, the group administers act as a proto–state with parallel institutions to those of the Palestinian National Authority in the West Bank. However, as Middle Eastern geopolitics have evolved and new technological tools have emerged, Hamas, too, has evolved their funding strategies. Compared to the past, the group is increasingly dependent on funding from overseas supporters who back Hamas' armed struggle.
That said, Hamas has also established a complex system for receiving money from private donors worldwide. The first method is through a network of Hamas–affiliated charities that primarily raise funds in the U.S., Canada, and Europe. Many of these organizations are under U.S. sanctions and rely on Hawala, a value transfer system that bypasses Western banks for their operations. The second method involves cryptocurrency transfers, which total about $10 million annually. ‘Buy Cash,’ a U.S.–sanctioned, Gaza–based remittance company, is a key player in facilitating these financial flows. Crypto transfers offer several advantages to Hamas, including bypassing international sanctions, cutting out financial intermediaries, and enabling immediate access to funds.
This area has been the most contentious as the United States and Israel continue their efforts to identify and shut down all Hamas–related entities. However, this process comes with significant issues as U.S. and Israeli authorities adopt a case–by–case approach, which can be lengthy and cumbersome. Out of the three revenue streams, this is the one where the West has achieved the most significant results. There is some degree of monitoring and blocking capabilities compared to transfers from foreign countries or collecting taxes in the Gaza Strip. For example, the amount of money received from Turkey and the complexity of Ankara–Hamas’ economic and political ties are mostly under the radar and hard to estimate. The same applies to Iran and its IRGC contributions to the group's economic and military capabilities.
