As the IDF continues operations in Gaza in order to fully eliminate Hamas, questions have been asked about whether targeting the physical infrastructure alone will restore security to Israel.
Erel Margalit, chairman and founder of JVP, asserts that eliminating the economic infrastructure of Hamas is also crucial for eradicating the terrorism threat they pose.
Financial insights into Hamas:
Hamas stands out as one of the wealthiest terrorist organizations in the world, with estimates placing its annual budget at $2-2.5 billion, constituting about 70% of Gaza’s GDP.
This substantial budget has enriched the leaders, with Ismail Haniyeh amassing a personal fortune likely in the billions.
While leaders enjoy luxury, Gaza residents, acting as human shields, endure poverty and constant threat.
Money’s role in terrorism:
Margalit underscores the role of money in terrorism, citing examples such as ISIS relying on oil reserves and Al-Qaeda’s substantial funding.
Funding is crucial for manpower, training, salaries, and infrastructure, with significant projects like building tunnels relying on a constant flow of money.
What are Hamas’s sources of funding:
Hamas’s financial infrastructure draws from diverse sources, including donations, charities, organized crime (such as drug and human trafficking), and support from countries like Iran.
Legitimate businesses, seemingly unrelated, are also established with support from entities sympathetic to terrorism, funneling income to organizations like Hamas, Palestinian Islamic Jihad, and Hezbollah.
Challenges for the financial system:
Financial institutions face challenges in detecting and preventing funds flowing to terrorist targets. Despite efforts over the last two decades, existing tools are insufficient, and regulators often take months or years to identify entities related to terrorism.
The role of AI in countering terrorism funding:
Israeli start-up ThetaRay has pioneered an advanced artificial intelligence (AI) system capable of proactively identifying transactions intended to finance terrorism.
Operating globally, it monitors over 11 billion transactions annually, valued at over $15 trillion, across more than one billion accounts in 30 countries.
The system excels in detecting patterns difficult for traditional monitoring systems, including small donations, international transfers, and suspicious individual behavior.
Unique features of ThetaRay:
ThetaRay stands out as the only company globally offering a solution for detecting abnormal money movements without predefined conditions. Its AI adapts to evolving tactics employed by terrorist organizations, providing constant vigilance to identify illogical activities.
As such, ThetaRay’s advanced AI system plays a pivotal role in disrupting the flow of funds to terrorist organizations, addressing a critical aspect of the fight against terrorism.
The day after
Whether we like it or not, substantial funds will be directed toward the reconstruction of the Gaza Strip in the coming years. Many countries and private initiatives have declared their intentions to contribute. A crucial aspect, according to Margalit, is preventing these funds from supporting the development of future Hamas rocket systems by disrupting the funding routes.
The importance of this lies in the fact that people fighting for Hamas are compensated, and if they aren’t paid, they may leave. Margalit cited a historical example where a financial crisis in Hamas led to the Palestinian Authority attempting to take control. Lack of funds could significantly impact Hamas’s ability to stay in power.
The trustworthiness of financial institutions’ control mechanisms is questioned. Margalit emphasizes that banks are obligated to identify suspicious financial activities related to terrorism. The solution, he argued, involves international banks employing technologies to prevent money laundering, particularly funds not used for defined purposes. ThetaRay collaborates with various countries globally, including Nigeria, Kenya, France, South America, Dubai, Abu Dhabi, and Saudi Arabia, to track and prevent such transactions.
Margalit stressed the need for international cooperation, sharing information between countries as is done with cyberattacks. He advocates for a process where banks globally deny money transfers to terrorist organizations, emphasizing the importance of collaboration between banks and state authorities to combat issues like drug deals, money laundering, and terrorism.